Macmahon Holdings has signed a non-binding heads of agreement (HoA) with PT Amman Mineral Nusa Tenggara (AMNT) to acquire certain mining assets in Indonesia.
Under the HoA, AMNT will become a significant shareholder in Macmahon. Macmahon will be awarded a life of mine contract to provide specific earthmoving and mining services at AMNT’s copper-gold mine in Indonesia.
Macmahon directors expect that this transaction will increase the scale, operational diversity, revenue and growth prospects of the company.
Macmahon CEO Michael Finnegan said: “This transaction represents a very exciting opportunity for Macmahon and its shareholders, with the potential to generate long-term shareholder value.
“Batu Hijau is a world-class mine with significant expansion potential through the Elang deposit and Nangka prospect. We have been developing the relationship with AMNT over the past six months.
“It’s great to be able to present this potentially transformational opportunity to our shareholders for their consideration.”
The HOA will see both companies enter into a life of mine, alliance-style mining contract for the Batu Hijau copper-gold site in Indonesia.
Based on an independent valuation, Macmahon will also acquire certain existing equipment at Batu Hijau from AMNT that includes loading equipment, trucks, ancillary and support assets.
In consideration of this acquisition, Macmahon will issue AMNT with new shares equivalent to between 40% and 50.1% of Macmahon’s expanded share capital post completion.
The total number of shares to be issued to AMNT will be calculated by dividing the sale assets valuation by an agreed subscription price of A$0.203 per Macmahon share.
This transaction is subject to multiple conditions including approval of Macmahon's shareholders.
An Indonesian mining company, AMNT operates the Batu Hijau project, located on the island of Sumbawa, Nusa Tenggara.
The project is one of the largest operating copper-gold mines in the country that started operations in 2000. The companies will now negotiate a binding implementation deed and mining contract.
It is expected that the negotiations will be completed before 13 April.