JAKARTA (TheInsiderStories) – Singapore’ investment firm, Wexler Capital Pte. Ltd., officially hold 20.82 percent of PT Bumi Resources Mineral Tbk (IDX: BRMS) shares after convert its notes, said the company on Friday (09/03). Now, the funder become controlling shareholders of the miner.
The transaction part of its parent, PT Bumi Resources Tbk (IDX: BUMI), to pay its obligation through a debt to equity conversion with price at Rp84 (US$0.005) a unit. The coal miner has issued 8.68 billion new shares (Series B) of BRMS with total amount Rp729.56 billion for the debt to equity swap.
The new shares will be subscribed by the bondholder to repay the $52 million outstanding debt of the company. Based on official data, the transaction occurred on July 10, 2020. Referring to the company profile, Wexler is not an affiliated party of the issuer and have an activities in investing businesses, including lend money to the third parties.
In the first quarter of 2020, BUMI still controlled BRMS shares by 35.73 percent and public investors 5.30 percent. The issuer’ Series B shares are hold by Fountain City Investment Ltd with 8.02 percent, Wexler 9.79 percent, Biofuel Indo 11.27 percent, 1st Financial Company Limited with 22.86 percent, and the public with 7.03 percent.
In disclosing information to the Indonesia Stock Exchange, the origin of Wexler’ debt conversion stems from an agreement between Credit Suisse AG, Bumi Minerals, and Wexler, on Oct. 28, 2016. The third parties agreed to transfer BRMS ‘loan amounting to $ 100.96 million.
In connection with the credit facility, in Feb. 23. 2017, Wexler filed a lawsuit at the South Jakarta District Court against the company. The lawsuit was related to their opinion that Bumi Minerals had defaulted.
Last year, the miner announced to produce up to 180,000 tons of gold after the production facility in the Poboya’ Gold Mine Site in Palu, Central Sulawesi was completed. Through its 96.97 percent ownerships at PT Citra Palu Minerals, the company operates over 85,180 hectares gold mine concession in Central and South Sulawesi.
The gold mine project has around 3.9 million ton of ore reserves and 7.9 million ton of ore resources. Its gold mine project’ production is estimated at 100,000 tons of ore. The production level is expected to go up to 180,000 tons of ore in the second year. If all the mining activities going smooth, gold production from the Palu mine could rises to 600,000 tons of ore in the next few years.
In addition to gold production in Palu, Bumi Minerals is also awaiting tin production from the Dairi mines, which is projected to start operating in two years time. PT Dairi Prima Mineral, the operator of the mines, has obtained a 30-year production permit for Dairi Lead-Zinc Mine in North Sumatra.
Bumi Resources holds an 80 percent stake in Dairi Prima and the remaining belongs to PT Aneka Tambang Tbk (IDX: ANTM). The subsidiary obtained production licenses for lead and zinc mines on Dec. 18, 2017. The construction of the Dairi Prima’ zinc mine will take 22 months and is expected to start producing by the end of 2019.
The Dairi deposit, is one of the premiere underdeveloped lead-zinc deposits, contains an estimated 1.2 million tons of zinc, 0.7 million tons of lead and over 3 million ounces of silver. The expected ore production, according to the feasibility study, will be 1 million tons of ore per annum (approximately 3,000 t/day). A second resource on the same concession known as Lae Jahe is expected to contain a similar amount of zinc, lead and silver.
Dairi Prima Mineral is an underground zinc mining project. In addition to zinc sulfide ore, the company will also mine secondary ores such as galena, which is the mineral form of lead sulfide and silver. The company holds a Contract of Work, which was granted by the government on Feb. 18, 1998.
Under the term, the company may explore for minerals in a 27,420-hectare area, located in North Sumatra and Nangroe Aceh Darussalam provinces. While, Citra Palu mine, has greater ore potential than PT Kaltim Prima Coal. Compared to tin production in Dairi, Sumatra, in twor years the potential income could be pocketed US$300 million for seven years from just one mine.
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