Quantum Pacific Investment, a private equity firm based in Hong Kong, has outlined plans to regain a controlling stake in a troubled $5bn copper and gold project in East Java, Indonesia, on behalf of former owner Intrepid Mines.
Intrepid Mines, in which Quantum holds a 5.4% interest, lost its 80% stake in Tujuh Bukit deposit in July 2012 after its shares collapsed.
In 2008, Intrepid entered into an agreement with Indonesia's PT Indo Multi Niaga for stake in the deposit. However, Indo Multi was sold to a new owner in 2012, which transferred the mining license of the project to a separate entity, dishonouring the deal with Intrepid, reports Bloomberg.
Quantum Pacific Investment managing director Greg Mazur said in a press conference that the company has held discussions with the deposit's new owner, Edwin Soeryadjaya, in order to resolve the dispute.
"Unfortunately the current board [of Intrepid] has pursued a strategy that has not gone over well with the local title-holders and that strategy has been a very public, hostile, legal-based strategy to try to get some assets back," Mazur said.
Intrepid has approached the Indonesian legal system to regain access to the project.
But Quantum believes that the current Intrepid's strategy will delay the project development, while proving costly to shareholders.
"The fact is that they [the Intrepid board] failed to appropriately secure against this risk, and spent over A$100m on this project without adequately securing a title to the project," Mazur told reports on a conference call.
In a move to regain the ownership, Quantum is seeking to remove five Intrepid directors, including its chief executive officer Brad Gordon.
The new leadership team will engage with the current owners of the project in order to secure a stake in the coming six to nine months, Mazur said.
Image: Tujuh Bukit deposit is estimated to contain 25 million oz of gold and 15 billion pounds of copper. Photo:courtesy of Bertrand Rieger / Corbis.