Austindo to buy Toka Tindung

Austindo to buy Toka Tindung

CANBERRA (Dow Jones): Australian-based Austindo Resources Corp. said Monday it has entered preliminary agreement to acquire the 85 percent of the Toka Tindung mine in North Sulawesi, Indonesia, it doesn't already own from Aurora Gold Ltd.

Under the agreement, Austindo will pay Aurora gross royalty equating to 1.7 percent of gold contained in ore and a 1.7 percent net smelter royalty on any production of gold and copper in concentrate, up to 1.5 millions of gold produced and sold. No other payment for the mine will be made.

Aurora put Toka Tindung on care and maintenance in September 1999 when in a major period of unrest in Indonesia, the satellite Talawaan operation was overrun by thousands of illegal miners.

Earlier this year, Aurora totally wrote off an investment of A$67 million in the mine.

Austindo is Australian based but is focused on gold exploration in Indonesia. It holds a 63 percent interest in the Cibaliung gold project southwest of Jakarta.