BRMS unit signs new agreement on sale of Dairi Prima
Thursday, June 22 2017 - 02:19 AM WIB
IDX-listed mining firm PT Bumi Resources Minerals Tbk (BRMS) announced Wednesday its subsidiary Gain and Win Pte, Ltd (GW) had on June 16 signed an updated conditional sales purchase agreement (previously signed on April 29) with China Nonferrous Metal Industry?s Foreign Engineering & Construction Co. Ltd. (NFC) for the sale of GW?s 51 percent share in zinc and lead mining firm PT Dairi Prima Mineral (DPM).
BRMS said in a statement that the 51 percent share divestment in DPM is estimated at over US$198 million and part of the proceeds will be used to settle the outstanding loan related to the DPM zinc and lead project in North Sumatra, and to fund the development of the other copper and gold projects in Gorontalo and Palu (both in Sulawesi). ?Consequently, after the loan repayment, BRMS? liquidity ratio and capital structure will strengthen, while the company?s interest cost will be reduced,? BRMS said.
The arrival of NFC (or its affiliates) as a new shareholder of DPM is also expected to speed up the zinc and lead commercial production in the near future, the company added.
The transaction completion will follow the approvals required from the DPM?s shareholders, the Ministry of Energy & Mineral Resources, the Capital Market Regulation, and others that maybe required.
BRMS owns 80 percent shares in DPM, which operates a zinc and lead mine project in North Sumatra. According to BRMS website, DPM has total JORC reserves of 11 million tons (based on 2010 and 2011 estimates) in Anjing Hitam and Lae Jahe sites, which translates to a mine life of 15 years, and resources of 25 million tons from Anjing Hitam, Lae Jahe, and Base Camp sites. The concession has one of the highest grades of zinc deposits in the world (11.5% Zn; 6.8% Pb; 7.5 Ag g/t).
DPM entered into an Agreement of Strategic Cooperation NFC in October 2013. This was followed by the signing of an Engineering, Procurement and Construction Contract in April 2014 to develop and monetize zinc and lead reserves in Anjing Hitam.
This portal previously reported that DPM is targeted to start production in 2019.
Editing by Reiner Simanjuntak