Straits Resources to launch demerger of gold, copper assets
Thursday, January 31 2013 - 03:42 AM WIB
ASX-listed Straits Resources Limited said that its board has approved a proposal to give effect to a demerger of Straits? gold assets, with the aim of creating independent, ASX -Listed gold and copper entities (demerger).
The board?s approval follows a strategic review of Straits? assets with the board favoring the demerger as an effective means to unlock value in both Straits? copper and gold producing assets, the company said in a statement received Thursday.
It is currently proposed that shares in a newly created gold entity would be returned to shareholders as an in specie capital return, as part of the demerger.
With the board?s approval, Straits will now commence the process of separation of the gold and copper assets, which will be subject to a number of external approvals, including Straits shareholder approval.
Full details of the demerger, including the value of the gold assets to be returned to shareholders, will be determined over the coming weeks. Straits operates the Mt Muro gold mining project in Central Kalimantan.
Managing Director of Straits Resources, Andre Labuschagne said: ?This decision is a significant step forward in our plan to unlock the potential value opportunity within both the gold and copper businesses. There is still further work to be undertaken to stabilize the performance of both mines however I am excited by the exploration potential around these mines and the opportunities this may provide to extend mine lives or increase production.?
Mt Muro Gold mine is located in the northern part of the Province of Central Kalimantan, Indonesia. Owned by PT Indo Muro Kencana, a 100 percent subsidiary of Straits Metals Limited, the mine lies 300km due west of Balikpapan and 40? south of the equator.
Meanwhile, the Mt Muro gold mine produced 8,499oz of gold and 185,042oz of silver, which were reductions of 28 percent and 33 percent respectively from the September quarter. Although total costs at operations were within expectations, unit costs were impacted by the lower than targeted production at each operation. Capital expenditure in the December quarter was A$12.7 million at Mt Muro.
Editing by Reiner Simanjuntak