Freeport has option to acquire Iriana Mutiara

Freeport has option to acquire Iriana Mutiara

NEW ORLEANS (Reuters): Freeport-McMoRan Copper & Gold Inc said Friday it has a letter of intent with the owners of PT Iriana Mutiara Mining providing Freeport with an option to acquire a 90- percent ownership interest in the Indonesian company, which holds exploration rights to an area totaling 485,548 hectares (some 1.2 million acres) in central Irian Jaya, Indonesia.

"A substantial portion of (this) area is contiguous to Block II of our P.T. Irja Eastern Minerals (contract) area and on-trend with a number of exploration targets we have identified," Chief Executive James Moffett said.

"Drilling on two prospects in Block II, the Haiura and Katehawa prospects, has shown encouraging results. In addition, PT-IMM has discovered a nickel laterite resource which, based on preliminary results from early stage exploration, appears to have commercial potential.

"This acreage enhances the prospect of our making a significant mineral discovery in Irian Jaya outside our P.T. Freeport Indonesia Block A" area, he said.

P.T. Iriana Mutiara is owned by Battle Mountain Gold Co, Iriana Resources Corp (Iriana), a Canadian resources company, and P.T. Mutiara Iriana Minerals, an Indonesian company.

The proposed transaction is subject to execution of a definitive restructuring agreement, Freeport said.

As proposed, it said, this agreement calls for Freeport to become the operator of the contract area and spend a minimum of $500,000 on exploration in the area by December 31, 1998.

After fulfilling the spending requirement and electing to continue participation beyond June 30, 1999, Freeport would acquire the 90-percent interest and would fund all exploration costs up to and including a feasibility study.

The remaining 10-percent interest would continue to be held by Iriana Resources. If a project in the area is determined to be feasible, Freeport would be responsible for arranging 100 percent of the needed construction financing.