Merdeka Copper to Select Australian Builder for East Java Gold Mine
Jakarta. Merdeka Copper Gold, Saratoga Capital’s gold and copper miner, is in the process of selecting three Australian bidders to build a gold mining facility that is set to start operating in the fourth quarter of 2016.
The tender for a construction company is expected to be completed in August, said Merdeka Copper corporate secretary Ellie Turjandie. Three Australian mining companies are bidding for the project: Como Engineers, Contromation Energy Services and FLSmidth.
“We are evaluating which [company] offers the most advanced, environmental friendly design with the most competitive price,” Ellie said on Friday.
Merdeka Copper is also seeking to secure bank loans of between $80 million and $100 million to help finance its $126 million investment of the mine. The company, he said, is in talks with 10 lenders both domestic and local.
“The pitching process is targeted to be completed in August or September. We are looking for loans with three to five years maturity,” Ellie said.
The remaining funds will come from proceeds from its recent initial public offering.
The company earlier this month raised Rp 839.3 billion ($63 million) from selling 419.7 million shares to the public, or equivalent to 21.7 percent of its paid capital.
According to the company’s plan, about half of the IPO proceeds will be used for capital expenditure, while 40 percent will be used to repay bank loans and the remaining will be for working capital.
Merdeka, through its subsidiaries Bumi Suksesindo (BSI) and Damai Suksesindo (DSI), have secured mining permits and concessions for a gold and copper mine in Banyuwangi, East Java. BSI’s concession is 4,998 hectares, while DSI’s is 6,623 hectares.
Merdeka Copper expects to start production at the new gold mine in the fourth quarter of 2016 and start selling its output in the first quarter of 2017.
Merdeka Copper is the seventh company to list its shares at the Indonesia Stock Exchange (IDX). It is also the first miner that hasn’t started production to conduct an IPO, thanks to more flexible regulations at the IDX.
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