Nusantara begins process to engage strategic partner in Awak Mas gold project
Tuesday, December 19 2017 - 02:35 AM WIB
ASX-listed gold development company Nusantara Resources Limited said on Tuesday that it has commenced a process to engage with a strategic partner for the planned development of the Awak Mas Gold Project located in Indonesia?s South Sulawesi Province.
The company said in a statement that the intent of this process is to introduce a reputable Indonesian national group to become a joint venture partner in the Awak Mas Gold Project. ?Initial dialogue with several groups to date has been very encouraging,? Nusantara said in the statement.
?The timetable for introduction of an Indonesian partner is anticipated to coincide with the project financing requirements, currently targeted for mid-2018,? the company added.
The 100 percent-owned Awak Mas Gold Project is owned through Nusantara?s local 100 percent-owned subsidiary PT Masmindo, and is held under a 7th generation Contract of Work (CoW) covering 14,390 hectares. The CoW was entered into in 1998 with the Government of Indonesia, under the previous regime of mining tenure for foreign companies operating in Indonesia.
As reported in the September 2017 Quarterly Activities Report, PT Masmindo, along with a number of other CoW holders, has been negotiating with the Government of Indonesia in good faith regarding several proposed amendments to more closely align existing CoW?s with current Indonesian mining law introduced many years after the CoW was signed.
The most significant request outstanding for Nusantara and all other foreign CoW holders surrounds the requirement for a staged divestment to Indonesian interests commencing no later than 6 years following commercial production. The divestment pricing mechanism under current Indonesian mining law is unclear. No specific divestment requirements currently apply to the Awak Mas CoW.
To date, Nusantara has been unable to reach agreement on a proposed amendment to the CoW terms in this regard and is continuing to hold discussions with the relevant Government authorities. It should be noted that under current Indonesian mining law for all mining permits, no further divestment would be required to the extent that an Indonesian investor already owns the specified interest in a mining project. Therefore, introducing an Indonesia partner will not only share project risk and assist with the Awak Mas project funding requirements, but also align the CoW ownership with current Indonesian mining law.
Editing by Reiner Simanjuntak