Indonesian mining company Antam has purchased a 7.5% stake in the Godowong mine from Australian gold producer Newcrest Mining.

The transaction would increase Antam’s stake holding capacity in the mine’s operator Nusa Halmahera Minerals (PTNHM) to 25%.

Newcrest will own a 75% stake in PTNHM following the deal’s closure.

Under the transaction terms, Antam is entitled to pay Newcrest a total consideration of $160m.

The state-owned miner would initially offer $130m in cash and pay $30m after securing an 1m oz of gold by December 2017.

Gosowong hosts known gold resources of 6m oz with considerable prospects for further discoveries.

For the deal to go ahead, the companies must obtain the requisite regulatory approvals from the Ministry for Energy & Mineral Resources and the Indonesia Investment Co-Ordinating Board (BKPM).

Antam president and director Alwinsyah Lubis said: "The Gosowong mine is an outstanding mine and we see that taking a greater stake in the mine will further enhance our portfolio."

Newcrest Executive Indonesia and Papua New Guinea general manager Brett Fletcher said that the deal strengthens the company’s 18-year relationship with Antam, while providing fair investment returns from the mine.

"We will continue to work together to maximise the returns from the mine to our respective shareholders and other stakeholders," Fletcher added.

Image: Newcrest has plans to advance exploration at Gosowong mine. Photo: courtesy of Newcrest Mining Limited.