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ASIA

Key equipment has arrived at Geopacific’s Woodlark project for the start of construction activities

Four days after announcing the Indika
funding package, Nusantara raised $11 mil-
lion via a placement – and a further $2 mil-
lion from a SPP – as it pushes the project
closer towards a decision to mine.
“We ran it a little bit to the wire, but none-
theless you can see from our recent num-
ber of announcements we’ve got a clear
layout for investors and for the project as to
how we’re going to fund it,” Nusantara ex-
ecutive chairman Greg Foulis told Paydirt.
“We have a project we think is an abso-
lute winner and will go into development.
We think this is going to be Indonesia’s next
major gold mine – in fact, we know this will
be Indonesia’s next major gold mine – so
for us 2019 was all about funding and now
($US1,450/oz) being incorporated into the pany confirmed it had signed a non-binding we’re looking to hit 2020 very hard.”
findings. Capex for the proposed 2 mtpa term sheet with Indika for a project financ- According to the October 2018 DFS, a
operation at Okvau remains at $US91 mil- ing package comprising up to $US40 mil- 100,000 ozpa operation at Awak Mas will
lion. lion in project equity and up to $US40 mil- generate a post-tax NPV of $US152 mil-
MIA approval was one of the conditions lion in deferred payments. lion, IRR of 20.3% and revenue of $US1.33
precedent for a $US60 million debt facility The term sheet paves the way for Indika billion from the 11-year mine life. C1 costs
from Sprott Private Resource Lending. Fi- to invest up to $US40 million into a whol- of $US643/oz and AISC of $US758/oz
nal project funding arrangements are set to ly-owned subsidiary of Nusantara in two are estimated, assuming a gold price of
be announced imminently. stages, including an initial tranche of $US15 $US1,250/oz.
At the time of print, Emerald raised $75 million, to earn 40% of the 2 moz Awak Mas It was a transformational year in 2019 for
million from a share placement, with the project. Nusantara during which founding manag-
company declaring the Okvau project now Indika subsidiary PT Petrosea Tbk was ing director Mike Spreadborough departed,
fully funded for development. Foulis stepped up as executive chairman
“When you’re in an emerging market like Nusantara intends to start construction work and Neil Whitaker became its Jakarta-
Cambodia you have to have a funding part- at Awak Mas within the next 12 months based chief executive.
ner that has got the same sort of risk profile Foulis said all the pieces of the puzzle
as we have,” Hart said. were coming together for Nusantara to tar-
“Sprott is very keen to back us as a devel- get construction of a mine within the next
opment team. They’ve had a look at Cam- 12 months.
bodia and they’re very comfortable with “In the first part of 2020 we will look to
the fiscal regime here. Obviously not too complete the FEED, land access agree-
many people know much about Cambodia, ments and basically get ourselves ready for
but they’ve made themselves comfortable a financial investment decision, which in-
about it. cludes having bank finance ready, and then
“On top of that, they’ve given us a $100 we’ll roll this into construction towards the
million M&A fund because they can see end of the year,” Foulis said.
we’re going to get more than one project “There are a lot of companies out there
and they’d like to be part of that. In essence, that have projects that look good on paper,
the benefit to us with Sprott and this style but ultimately you have to be able to trans-
of funding is they’re going to become our late that into moving those projects into
funding partner going forward, so we won’t development and into production. We rec-
have to rattle the tree as such looking for ognise that for the junior companies, one of
debt funding elsewhere.” the critical steps is to clearly demonstrate
Indonesia-focused Nusantara entered how you’re going to fund it and that’s what
2019 knowing the ensuing 12 months would we’re doing with these recent announce-
be primarily spent on identifying the opti- ments.
mal funding pathway for its $US162 million “Everybody here is committed to docu-
Awak Mas gold project in South Sulawesi, menting the [Indika] deal, finalising the deal
having attracted integrated energy and re- also awarded the FEED contract (valued at and getting stuck into what is going to be a
source company PT Indika Energy Tbk as up to $US10 million), with the companies to very exciting year in 2020 in terms of the
a cornerstone investor at the end of the pre- subsequently negotiate terms for an EPC actual physical work for the project.”
vious year. contract (valued at up to $US30 million).
Nusantara’s likely path to funding be- These payments are deferred, subject to – Michael Washbourne
came clearer in December when the com- relevant approvals and conditions.

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