RNS26 Nov 2014 12:11
LONDON (Alliance News) - Kalimantan Gold Corp Ltd shares leapt higher Wednesday after it said it has signed a non-binding letter of intent with Tigers Realm Copper Pty Ltd to purchase its 40% interest in the Beutong copper-gold project in Sumatra, Indonesia.
Kalimantan shares were up 42% to 2.55 pence per share on Wednesday morning.
Under the deal, Kalimantan will issue over 170.4 million shares and over 14.6 million share purchase warrants to Tigers after it has completed a concurrent equity placement to raise a minimum of USD3.0 million.
The placing will fund the company's next phase of infill and expansion drilling and metallurgical studies at Kalimantan's existing Beruang Kanan prospect in Indonesia and finalise the conversion of the Beutong project from exploration to exploitation, it said in a statement.
Tigers will lend Kalimantan the funds to bankroll Kalimantan's 50% share of due diligence and transaction related costs for the deal, which will be interest free and paid back using money from the placing.
In addition, Tigers will provide Kalimantan with a separate USD250,000 interest-free loan in order to maintain operations throughout the due diligence period. This also will be paid back via funds raised in the placing, but Kalimantan said it has the right to settle the debt via shares if the capital raising does not go ahead.
Once the acquisition is complete, Tigers Director Tony Manini will become chairman and chief executive of Kalimantan, which will see Faldi Ismail, who currently holds the roles, remain as a director of the company.
Manini has over 28 years industry experience including 14 years with Rio Tinto and 9 years at Oxiana and OZ Minerals, where he was a founding member and senior executive, said Kalimantan.
The Beutong project, in which Tigers holds a 40% interest has a large copper-gold-molybdenum resource. PT Emas Mineral Murni owns 100% of the project. Emas Mineral Murni is owned 80% by Beutong Resources Pte Ltd, which is in turn owned 50% by Tigers.
The measured and indicated resource of the project totals 93 million tonnes at 0.61% copper, 0.13 parts per million gold, 1.97 parts per million silver and 97 parts per million molybdenum. This represents a contained metal of 1.24 billion pounds of copper, 373,000 ounces of gold, 5.7 million ounces of silver and 20 million pounds of molybdenum.
"The acquisition of Beutong, combined with the company?s own KSK copper mineral resource and its Jelai gold prospect creates a quality portfolio of pre-development copper and gold assets all located within Indonesia. All three projects have significant growth potential and their combination will create a platform upon which to continue to build a significant regional Asian focused copper-gold business," said Ismail.
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