Kalimantan Gold signs LOI to acquires 40% of Beutong gold project
Wednesday, November 26 2014 - 01:01 PM WIB
TSX-listed Kalimantan Gold Corporation Limited signed on Wednesday a non-biding Letter of Intent (LOI) with Tigers Realm Copper Pty Ltd., a private Australian corporation within the Tigers Realm Group of companies, to purchase Tigers' 40 percent interest in the Beutong copper-gold project in Aceh.
Under the deal, Kalimantan will issue over 170.4 million shares and over 14.6 million share purchase warrants to Tigers after it has completed a concurrent equity placement to raise a minimum of US$3.0 million.
The placing will fund the company's next phase of infill and expansion drilling and metallurgical studies at Kalimantan's existing Beruang Kanan prospect in Indonesia and finalise the conversion of the Beutong project from exploration to exploitation, it said in a statement.
Tigers will lend Kalimantan the funds to bankroll Kalimantan's 50% share of due diligence and transaction related costs for the deal, which will be interest free and paid back using money from the placing.
In addition, Tigers will provide Kalimantan with a separate $250,000 interest-free loan in order to maintain operations throughout the due diligence period. This also will be paid back via funds raised in the placing, but Kalimantan said it has the right to settle the debt via shares if the capital raising does not go ahead.
On closing the acquisition, current Tigers? director Tony Manini will be appointed as the Deputy Chairman and Chief Executive Officer of KLG in place of Faldi Ismail who will remain as a director of KLG. Current director of KLG Stephen Hughes will become the VP Exploration and Mansur Geiger will become VP Indonesia for KLG. Manini's remuneration level and conditions will be determined according to industry standards and market conditions.
Manini has over 28 years industry experience including 14 years with Rio Tinto and 9 years at Oxiana/OZ Minerals where he was a founding member and senior executive. Tony is a founding member of the Tigers Realm Group, a co-founder of EMR Capital and executive chairman of Tigers Realm Coal. He has a significant exploration discovery record and a long and successful operating background in Asia. The Tigers Realm Group is widely known and strongly supported in mining and metals markets globally and has raised more than A$150 million for exploration and development funding in the past five years.
Faldi Ismail, the current Deputy Chairman and CEO of KLG stated, "The acquisition of Beutong, combined with the Company's own KSK copper Mineral Resource and its Jelai gold prospect creates a quality portfolio of pre-development copper and gold assets all located within Indonesia. All three projects have significant growth potential and their combination will create a platform upon which to continue to build a significant regional Asian focused copper-gold business. We are looking forward to working with Tony in our efforts to raise the necessary funding to progress the Company's projects. It is expected that the combination of projects and a team with a strong track record in developing projects in Asia / Pacific will be well supported by investors".
The Beutong Project is located within the Beutong IUP located in Aceh, some 60 kilometres inland from the coastal city of Meulaboh on the island of Sumatra.
The Beutong IUP is held by PT Emas Mineral Murni, a company registered in Indonesia. PT EMM is owned 80 percent by Beutong Resources Pte Ltd. (BR), a company registered in Singapore. Tigers wholly owned subsidiary, Tigers Copper Singapore No. 1 Pte Ltd owns 50 percent of the shares of BR (for an effective 40 percent interest in the Beutong IUP).
Editing by Johannes Simbolon