Paramount gains control of Gunung Rosa

By Nur Azizah

Australia listed Paramount Mining Corporation Limited has recently announced to have signed a Share Subscription Agreement between its 85 percent-owned Indonesian subsidiary PT Paramindo and PT Cikondang Kancana Prima (CKP) to acquire a controlling interest in the Gunung Rosa gold, silver and base metal mine project in West Java.

The agreement registers Paramindo's 51 percent equity interest from previous 10 percent ownership in the project.

The company previously stated to have acquired the additional 41 percent equity following completion of a highly successful helicopter-borne magnetic survey program which identified at least six new significant prospective targets considered to be related to a substantial porphyry intrusive and confirmed Gunung Rosa's already substantial potential, as detailed in the Company's 30 April 2012 announcement.

As consideration, Paramount completed the US$2 million Stage 2 payment to the project owners per the February 2, 2012 announcement.

"The timing of the second payment for the acquisition could not be better as it coincides with receiving exciting results from our recent helimag survey. This survey further confirms our geologist's initial thoughts from the drill data that the existing gold-silver-base metal mesothermal vein system has developed within an intrusive complex and might be associated with a potentially much larger gold-copper porphyry system. Our fieldwork has also shown us that the vein system is far more extensive than we initially thought. This not only increases the likelihood of Paramount finding more resources in the vein system to exploit in the near term, as part of our stated 2012 development strategy while giving the company plenty of upside potential for finding much larger resources in the medium to long term," company CEO and MD Terry Holohan said.

"With our company making this significant step of investing shareholders' money in Indonesia I am particularly pleased to see that the Minister of Energy and Minerals has clarified the beneficiation laws that were recently promulgated, with a lot of adverse publicity, in February of this year. In his speech last week Mr Jero Wacik stated that, after discussions within the industry, it has been agreed that all existing resource operations will have until 2014 to put in place beneficiation plant or form consortiums, with the Government's assistance, to beneficiate key metals such as gold and copper within the country.

We welcome this news as it demonstrates to us all that the Indonesian Government, along with several of the emerging economies, is ready to engage with the resource industry and has responded with a more pragmatic approach to the further development of the Indonesian resources sector than was earlier reported by the international media," company chairman Mo Munshi added.

Funding for the acquisition has been provided under a loan agreement with resource project investors Cape Gannet Ltd, at nil interest, and due for repayment on 30 September 2012. The fee for securing this funding will be the issue of 5 million fully paid ordinary shares.

Pursuant to the Stage 2 Payment terms, Paramindo will appoint an additional director and commissioner to the CKP boards. This will bring the number of Paramindo appointees to two out of three on each board, including the President Commissioner and President Director.

Editing by Er Audy Zandri