Gold development company, Nusantara Resources Limited (ASX: NUS) has entered into a subscription agreement with a subsidiary of PT Indika Energy Tbk for the placement of 30.6 million shares at 23 cents per share (cps), for total funds of A$7.04mn. Following this news, the share price of the company increased by 12.5 percent as on 12 December 2018.
PT Indika Energy Tbk (IDX: INDY) is a leading integrated energy company in Indonesia which is involved in exploration, production, and processing of coal. Indika’s subsidiary PT Indika Minerals Investindo will obtain a 19.9 percent interest in the Nusantara Resources’ shares as a result of the placement. Indika’s investment will be on a two-tranche basis, in the first tranche Nusantara will issue 30,607,162 new shares at a price of A$0.23 per share and in the second tranche, Nusantara will issue 2,780,260 shares at a price of A$0.23 per share. The second tranche of the placement is subject to the approval of shareholders at that General Meeting to be called for late January 2019. Nusantara Resources has also executed a Relationship Deed with Indika to explore the opportunities to finance and develop the Awak Mas Gold Project.
Further, the company also announced that Nusantara’s existing shareholder AustralianSuper has committed to subscribe for 11.2 million shares at 23 cps which will raise around A$2.6 million. If the second tranche of the placement gets approved by the shareholders, then Indika will have 19.9%, and AustralianSuper will have 14.0% of the Nusantara’s issued shares.
As per the company’s announcement, Nusantara's major shareholder, Lion Selection Group (ASX: LSX, holding 32.32%) fully supports the placements to Indika and AustralianSuper. The placements to Indika and AustralianSuper will raise a total of A$10.25 million which will be used for the development of the Awak Mas Gold Project through further optimization studies, near-mine exploration, preparatory work for project construction, advancing project financing and for general working capital.
As per Nusantara’s Managing Director Mike Spreadborough, this placement is a significant milestone in progressing the Awak Mas Gold Project and demonstrates the value of this low cost, long life gold project and its exceptional exploration potential. The strategic relationship between Indika and Nusantara will be focused on exploring the opportunities to finance and develop the Awak Mas Gold Project.
On 12 December 2018, NUS shares were reinstated to official quotation after a voluntary suspension which was announced on 10 December 2018. The share price of Nusantara Resources decreased by 13.51% in the last six months as on 5 December 2018. NUS shares were reinstated to official quotation on December 12, 2018, and the shares traded at $0.180 (up 12.5%) with a market capitalization of $17.60 million.
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