Gold explorer Nusantara Resources has secured finance to advance a development strategy for its Awak Mas gold project, with an $11 million capital raising backed by one of Indonesia’s leading energy companies.
Nusantara announced to the ASX today it had received firm commitments for an $11 million placement priced at 34 cents per share, with Indonesia’s Indika Energy committing to take 10.5 million shares valued at $3.57 million.
The company also said it would soon launch a share purchase plan to tap eligible shareholders for an additional $2 million, with capacity for a $1 million oversubscription.
The share purchase plan, also priced at 34 cents, opens today and closes on January 10.
Nusantara executive chairman Greg Foulis said the funds would go towards progressing a development strategy for the Awak Mas gold project, located in Indonesia’s South Sulawesi and comprising a 1.1 million ounce ore reserve and a 2 million ounce mineral resource.
The placement and share purchase plan follow Nusantara securing up to $US80 million ($115.6 million) in project equity and deferred payments from Indika Energy earlier this month.
Indika agreed to invest $US40 million ($57 million) into Nusantara’s project operator, subsidiary PT Masmindo DWI, in return for a 40 per cent interest in the project company.
Indika subsidiary PT Petrosea Tbk will also be awarded a front end engineering and design contract as well as an engineering, procurement and construction deal, for up to $US40 million in deferred payments.
Nusantara and Indika will collaborate on seeking third party and mezzanine finance in coming months, with several international banks already engaged.
A definitive feasibility study completed late last year supports an 11-year project producing around 100,000oz per year, with the mine to cost $US146 million ($210 million) to develop, and an additional $US16 million ($23 million) in pre-production mining costs.
Nusantara plans to make a final investment decision next year, with contracts and construction to start towards the end of 2020.
By Dan Wilkie
