Borneo Resources improves balance sheet through debt restructuring deal

By Ruli Setiawan

US firm Borneo Resource Investments Ltd., a mining company that mines gold and develops producing gold mines as well as coal mining properties in Indonesia, announced on Thursday it has, through its Indonesian subsidiary PT Puncak Kalabat, executed a debt restructuring agreement with the seller of the "Talawaan Property," a producing gold mine.

Borneo had acquired Talawaan in North Sulawesi for a purchase price of US$5,000,000 and owed an aggregate balance of $4,650,000 as of December 17, 2013. Per the debt restructuring agreement executed on December 17, 2013 the parties have agreed to reduce the balance to be paid by $2,500,000 from $4,650,000 to $2,150,000, in exchange for 100,000 shares of Borneo stock and a non-interest bearing promissory note, according to a company statement.

For September 30, 2013, the company had reported current liabilities of $7.1 million, including the amount owed for the purchase of Talawaan and a total stockholders' deficit of $595,052. On a proforma basis, applying the debt restructuring to the September 30, 2013 balance sheet, the company would have reported current liabilities of $4.6 million and a total stockholders' equity of $1.9 million.

Borneo started gold production at Talawaan in June of 2013 and completed its first full quarter of production at the property in the third quarter of 2013, putting the company into profitability for that quarter.

"This debt restructuring agreement is a result of our strengthening relationship with the seller and other leaders in the region. Following our acquisition of Talawaan, we have acquired two additional gold properties and we are currently evaluating other opportunities as well," commented Borneo CEO Nils Ollquist.

Editing by Reiner Simanjuntak