Austindo, AngloAmerican Group in Papua copper, gold exploration venture

ASX-listed mining firm Austindo Resources Corp. Ltd. announced on Friday that it had entered into Strategic Alliance Agreement with PT.Minorco Services Indonesia, a unit of mining firm AngloAmerican Group to explore for large copper gold porphyry deposits in the provinces of Papua and West Irian Jaya.

Key elements of the alliance are summarizes as below: (1) Anglo will sole fund initial exploration expenditure and has 80 percent interest in the project, while Austindo retains a 20 percent interest; (2) Austindo is carried (not free carried) through decision to mine-with 10 percent of all pre-development costs to be paid by Austindo out of project proceeds (non-recourse to austindo); (3) If following completion of a Feasibility study Anglo makes a decision to mine, then a joint venture shall be formed and each Anglo and Austindo shall participate (and fund capital expenditure) according to their 80/20 project interests. Austindo dilutes if it does not contribute; (4) In the event that less than 1 million tones of contained copper equivalent or 1 million ounces of gold is identified, then Anglo may elect that such a project shall either revert to Austindo on a 80/20 basis (with Austindo holding 80 percent) or that 100 percent be transferred to Austindo with Anglo retaining a 2 percent NSR; (5) The Alliance is for the initial term of 3 years; (6) If interests associated with Tahija family as major as major shareholders of Austindo ceases to hold a relevant interest in at least 20 percent of Austindo then Anglo may require Austindo to sell its interest in the Alliance at agreed value or value determined by independent experts. (alex)