Westgold forms strategic alliance with GEAR
Friday, December 1 2017 - 01:09 AM WIB
ASX-listed gold producer Westgold Resources Limited said on Thursday it has agreed to form a strategic alliance with SGX-listed coal mining and trading firm Golden Energy and Resources Limited (GEAR) to support the continued expansion of Westgold?s Australian gold operations and further growth options for the company.
The company said in a statement that under the agreement, GEAR will invest in Westgold, agreeing to take a diluted 10 percent position in new equity capital. The placement will occur at a price of A$1.885 per share which is a premium to short term VWAPs.
Westgold and GEAR have signed a binding subscription agreement to complete the transaction. The transaction will complete in three tranches for a total of 36 million shares. The first of 16,900,000 shares is expected to settle on December 5, 2017. The second tranche of 11,000,000 shares is expected to settle on January 12, 2018 and the third of 8,100,000 will settle subject to receipt of FIRB approval by GEAR.
GEAR is affiliated with the Sinar Mas Group and the group is one of the largest conglomerates in Indonesia with business interests in diverse industries including, mining, power generation, real estate, agriculture, telcommunications, as well as banking and financial services.
?We have for some time desired to diversify into the gold sector and are privileged to do so with Westgold who is one of Australia?s top mine builders and operators. GEAR is looking forward to participate and support Westgold?s strategic initiatives on an ongoing basis.,? said GEAR?s CEO Fuganto Widjaja.
?We are delighted that they see the opportunity and long-term growth in our gold operations and mine contracting businesses. The investment also assists with working capital to continue our aggressive growth following the acquisition of the Tuckabianna Project, private mining contractor, Australian Contract Mining Pty Ltd and the host of exciting opportunities in both exploration and development within the group. All our current development and strategic projects are now fully funded with some additional growth capacity available,? said Westgold?s Managing Director Peter Cook.
GEAR and Westgold have been advised by boutique corporate advisory firm, Gold Quay Capital Ltd of Singapore. Gold Quay will receive a success fee of 5 percent of the new equity raised by Westgold as recompense for the formation of the strategic partnership and capital injection.
Editing by Reiner Simanjuntak