Austindo raises fund to anticipate Banten gold project costs increase

Australian miner Austindo Resources Corp. NL announced on Monday that it had agreed to issue A$4 million of convertible notes to anticipate finance contingency that might arise during construction of its Cibaliung gold project in Banten province.

The unlisted notes will have a 3-year term with 10 percent coupon and are convertible at any time at price of 6 cents, or 30 percent less that company shares current price.

The company said the issuance of the notes was to satisfy ANZ Bank project finance requirement. The company predicted that the project costs would be impacted by recent fuel subsidy cut by the government of Indonesia.

The company had bought used processing plant to be relocated to Cibaliung. The project would commence production in the fourth quarter of 2006 at 70,000 ounces PA.

The project cost is initially estimated at US$34 million, $26 million of which is provided by ANZ Bank.

The Cibaliung project is being developed by PT Cibaliung Sumberdaya ? a joint venture company in which Austindo is entitled to an 83.76 percent interest and the state-owned diversified miner PT Antam Tbk holds a 16.24 percent interest. (alex)