Merdeka signs debt novation

By Romel S. Gurky

IDX-listed gold mining firm PT Merdeka Copper Gold Tbk said that it had on February 29 signed a debt novation, taking over the debt obligation of its subsidiary PT Bumi Suksesindo (BSM) to creditor PT Mitra Daya Mustika (MDM).

BSM and MDM signed on January 6, 2014 a debt agreement, under which the latter agreed to provide up to US$20 million loan to the former, Merdeka said in a statement Wednesday.

Merdeka said that it has also reached agreement with MDM to extend the maturity of the debt to end 2016.

?Since the debt novation agreement, the company has accepted the entire rights, benefits and obligations from BSI based on the debt agreement, and as such agrees to shoulder the entire obligation based on the debt agreement,? Merdeka said.

BSI is a subsidiary of Merdeka operating the Bukit Tujuh concessionin Banyuwangi, East java. According to 2012 JORC, the Bukit Tujuh mine holds ore reserves of 90 million tons in its oxide layer. The project is expected to produce 90,000 ounces of gold and 300,000 oz of silver per year from late 2016 to 2025.

Editing by Reiner Simanjuntak