Krueng Gasui refuses to sell Busang shares<\/p>\n
JAKARTA (JP): PT Krueng Gasui, one of Bre-X Minerals Ltd's
\nIndonesian partners developing East Kalimantan's Busang gold
\ndeposit, has refused to sell its shares to Bre-X's new ally, PT
\nPanutan Duta.<\/p>\n
Krueng Gasui stated yesterday that it and the other Indonesian
\npartner in the Busang project, PT Sungai Atan Perdana, had heard
\nnothing from Bre-X or Panutan on the planned takeover of their
\ninterests.<\/p>\n
Krueng Gasui and Sungai Atan have a combined 40 percent-
\ninterest in the project.<\/p>\n
\"The Indonesian partners have advised Bre-X that their
\ninterests are not for sale,\" said the statement by Krueng Gasui
\nand Golden Valley Mines NL of Australia.<\/p>\n
Golden Valley has a financial and technical assistance
\nagreement with Krueng Gasui on the project. Yesterday's statement
\nwas signed by Krueng Gasui President Jusuf Merukh and Golden
\nValley Chairman Warren T. Beckwith.<\/p>\n
According to the statement, the Indonesian partners believe
\nthe support services arrangement recently announced by Bre-X is
\nlikely to hamper the introduction of an operator and the
\ndevelopment of the mine.<\/p>\n
They said any transfer of interests by Bre-X would require the
\nIndonesian partners' consent and the Indonesian government's.<\/p>\n
Earlier this week, Toronto-listed Bre-X announced it had
\nforged an alliance with Panutan, a company 60-percent owned by
\nPresident Soeharto's son Sigit Hardjojudanto.<\/p>\n
Bre-X said it planned to grant Panutan a stake potentially
\nworth C$580 million (US$430 million) from a 10-percent interest
\nin each of the project's mining deposits in East Kalimantan,
\nnamely Busang I and Busang II.<\/p>\n
If the plan goes ahead, Panutan's interests would entitle it
\nto a proportionate share of the project's distributable cash flow
\nafter it begins production.<\/p>\n
Bre-X would lend money to Panutan to buy out its two
\nIndonesian partners, Sungai Atan and Krueng Gasui.<\/p>\n
Bre-X also agreed to hire Panutan as a \"consultant\" for 40
\nmonths, paying it a $1 million consultancy fee each month.<\/p>\n
Merukh stated that if Sigit got involved in the project, he
\nwould welcome the \"increased participation of Indonesians\".<\/p>\n
\"Indonesians would then hold 50 percent of the Busang gold
\ndeposit which would bring significant benefits to the national
\ninterest of Indonesia,\" Merukh said.<\/p>\n
\"As a long-standing supporter of President Soeharto's
\ngovernment and the New Order, Merukh has expressed pleasure at
\nthe prospect of the participation of the President's family,\" the
\nstatement read.<\/p>\n
The Busang gold deposit was discovered in 1988 by Bre-X's
\npredecessor and manager of the project, Montague Gold NL.<\/p>\n
Bre-X has a market capitalization of C$5.8 billion on the
\nToronto Stock Exchange. Its shares fell sharply this month over a
\ndispute with Krueng Gasui after the latter complained to the
\nIndonesian government that Bre-X had unfairly left it out of the
\nBusang II phase of the project.<\/p>\n
Bre-X shares went into a free-fall on rumors the dispute would
\nmean the government would not issue a final works contract. On
\nOct. 4 alone, Bre-X shares lost C$510 million in value.<\/p>\n
The mining company's share price had earlier soared from C$4.5
\nto C$250 before it had extracted any gold. (pwn)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/krueng-gasui-refuses-to-sell-busang-shares-1447893297",
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