Australian mining company, Newcrest Mining has agreed to sell its wholly-owned subsidiary Newcrest Singapore (NSH) to PT Indotan Halmahera Bangkit.
NSH holds a 75% stake in PT Nusa Halmahera Minerals (PTNHM) that owns and operates the Gosowong mine in Indonesia.
The transaction will allow Indotan to acquire the Newcrest’s 75% stake in the Gosowong mine for $90m.
The deal will also include the acquisition of a 100% stake in PT Puncakbaru Jayatama, which employs exploration personnel in Indonesia.
The deal includes $5m cash deposit paid on sale execution
The deal comprises $5m cash deposit paid on the sale and purchase agreement execution, $55m cash will be paid upon completion of the deal and $30m deferred cash that will be paid in 18 months upon completion.
The sale of NHM follows a strategic review by the company and to comply with the amended Gosowong Contract of Work, under which Newcrest is required to sell the stake to at least 49% of PT NHM by 30 June 2020.
Newcrest managing director and CEO Sandeep Biswas said: “Following an extensive review and sale process we are pleased to be able to announce the sale of Gosowong to Indotan.
“Gosowong has been a valued part of our operating portfolio since we discovered it in 1993, with first production commencing in 1999.
“Over the last 30 years we have built valued relationships with our Indonesian joint venture partners, suppliers, employees, government and community stakeholders, and together achieved the strong culture we see today which is based on safety, trust and teamwork.”
According to Newcrest, after completion of the deal, it is expected to recognise a $44m loss on divestment of the firm’s stake in the Gosowong mine.
In December last year, Newcrest Mining increased its stake in Canadian miner Lundin Gold to 32% from 27.1%, which it acquired in 2018, with an additional investment of C$79.6m ($60.5m).
