Home > Intrepid win Indonesian Tujuh Bukit gold mine dispute

Intrepid win Indonesian Tujuh Bukit gold mine dispute

Editorial
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Intrepid Mines has won its long running Indonesian Tujuh Bukit project dispute.

The miner has signed a series of binding agreements settling the dispute with its former partner PT Indo Multi Niaga over ownership of the copper gold project, and awarding the ASX listed company $90 million in cash.

Issues erupted between Intrepid, its Indonesian joint venture partner, and Australian investors when the local company relocated the ownership $5 billion asset to a new company controlled by Indonesian billionaire Edwin Soeryadjaya.

The Australian miner claimed that its joint venture partners, Maya Ambarsari and Reza Nazaruddin (who own IMN) seized control of the site and ordered Intrepid’s workers off the site, stating that they had been working with Soreyadjaya and a number of other parties to steal the project out from under them.

However, the validity of Intrepid’s claims were under a cloud as the type of mining licence held for the deposit by its joint venture partner was an IUP, which could not legally be held by foreigners.

The groups involved in the dispute have now signed a master settlement deed and an MSJ securities assignment deed, bringing the fight to an end.

Under the master settlement deed, which includes Intrepid, PT Indo Multi Niaga, Maya Ambarsari, Reza Nazaruddin, and Paul Willis, “all parties have agreed to settle the disputes between them, including those that are the subject of arbitration proceedings brought by Intrepid in Singapore and the dispute between the company and IndoAust Ltd, IndoAust P/L, and PUal Willis, which is before the Indonesian courts”.

“Under the MSD, Emperor Mines (a wholly owned subsidiary of Intrepid) will exchange a US$70 million promissory note issued by IMN in settlement of Emperor’s claims against IMN, Maya, and Reza for a bond which is convertible into a 15% pre-IPO shareholding in PT Merdeka Serasi Jaya [MSJ](which holds 95% of what was previously IMN’s shareholding), which is the current holding company for the companies holding the Tujuh Bukit mining tenements,” which is a convertible bond.

“This convertible bond is exercisable upon the IPO of MSJ.”

On top of this Emperor has also been granted the right to pay US$ 37.5 million to acquire 7.5% of MSJ’s shares at the time of its proposed IPO, which is known as the option.

Under the MSJ Securities Assignment Deed Intrepid and Emperor have sold and assigned all of their rights under the Master Settlement Deed, including the convertible bond and the option to Kendall Court Resource Investment, which is valued at US$ 80 million.

These two deeds have been fully supported by Intrepid’s board of directors as it puts an end to the ongoing litigation, recovers a proportion of the funds invested into the Indonesian project, and lessens the impact of both the new foreign ownership regulations in the country and the limitations of the export of raw and semi-processed minerals.

Speaking on the decision, Intrepid’s chairman Ian McMaster said “we are pleased to have reached this settlement which marks the end of a difficult period for Intrepid and our shareholders”.

“In addition to the protracted dispute over ownership rights in the project which we have no resolved, the value of our interest in the project has declined as a consequence of lower metal prices and regulatory changes which have decreased both our ultimate potential ownership and the overall returns available to the project.

He welcomed the end to the litigation, stating: “Legal challenges are time consuming, costly, and rarely result in harmonious relationships going forward.”

McMasters added that “while this is a disappointing conclusion to our efforts on the project, I am confident that our shareholders will see the benefit of eliminating the current risks we face in Indonesia and recovering the US$80 million (AUD$ 90 million) for redeployment elsewhere.”

Image: The Courier Mail

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