Nusantara to advance Awak Mas gold project development

12 December 2018 (Last Updated December 12th, 2018 12:25)

Nusantara Resources has reached an agreement to secure funds through a private placement to advance the development of the Awak Mas gold project, located in Sulawesi province, Indonesia.

Nusantara Resources has reached an agreement to secure funds through a private placement to advance the development of the Awak Mas gold project, located in Sulawesi province, Indonesia.

The company has signed a subscription agreement with PT Indika Energy’s 100%-owned subsidiary PT Indika Minerals Investindo.

Under the terms of deal, Nusantara will issue 30.6 million shares at 23 cents per share to Indika Minerals to raise aggregate funds of around A$7.04m ($5.07m).

Following the completion of the placement, Indika Minerals will hold a 19.9% interest in Nusantara.

The agreement will also offer an opportunity to Indika to subscribe for a further 2.8 million shares at 23 cents per share totalling A$0.64m ($0.46m), subject to Nusantara shareholder approval.

Nusantara has also secured a commitment from existing shareholder AustralianSuper for subscription of 11.2 million shares at the same price, subject to shareholder approval. Through this arrangement, the company will be able to raise a further A$2.6m ($1.87m).

Together, the placements will allow Nusantara to raise a total of A$10.25m ($7.38m), which will be used to advance the Awak Mas project through further optimisation studies, near-mine exploration, and preparatory work for project construction.

The proceeds will also be used to advance project financing and for general working capital.

Additionally, both Indika and AustralianSuper will be granted options on a one-for-two basis pro-rata to their share subscriptions. The companies can exercise the options at A$0.35 ($0.25) on or before 30 November 2020.

“Indika’s investment in Nusantara is a significant milestone in progressing the project and demonstrates the value of this project.”

Nusantara Resources managing director Mike Spreadborough said: “Indika’s investment in Nusantara is a significant milestone in progressing the project and demonstrates the value of this low cost, long life gold project and its exceptional exploration potential.

“Indika brings a wealth of Indonesian operating experience through its extensive resources and energy activities across Indonesia, and we look forward to the ongoing support and advice of Indika’s highly credentialed Board of Commissioners and Board of Directors as we accelerate and assess avenues for the development of the Awak Mas Gold Project during 2019.”

Nusantara and Indika have also reached agreements that define an ongoing strategic relationship between them.

Alongside exploring avenues for completing the project financing and development, the strategic relationship will allow Indika to acquire an interest in the Awak Mas project.