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Merdeka Copper Gold bags US$50m loan, to buy mining asset in Wetar Island

Wetar Copper Project (Image (credit: Finders Resources Ltd)

JAKARTA (RambuEnergy.com) – Gold and copper miner PT Merdeka Copper Gold Tbk, through its subsidiary Eastern Field Development Limited (EFD) registered in the British Virgin Islands, has secured loan facility amounted to US$50 million from Standard Chartered Bank, Singapore Branch. The proceeds of the loan will be used to acquire a copper mining in Wetar Island, Maluku.

The Stanchart Singapore branch also acts as an arranger, while Stanchart Hong Kong branch acting as an agent and Standard Chartered Bank as guarantor agent for the facility agreement.

As a requirement of the loan facility, EFDL agreed to sign Put Option Deed with certain conditions

Merdeka Copper and Gold has equity of US$189.51 million as of end 2017. The loan facility, therefore, is 26.38% of the company’s equity which is more than 20%.

Production
In 2017, Merdeka Copper and Gold produced 103,967 troy ounces of gold at price of US$1,273 per troy ounce. Thus, last year, the company booked sales of US$132.35 million.

Its silver sale reached 21,5341 troy ounces at US$17 per troy ounces worth US$357,000.

This year, the company targets to produce 155,000-170,000 troy ounces of gold.

Merdeka Copper and Gold said it will use the loan facility proceeds to acquire Finders Resources ltd (FRL) which owns and develops a copper mining in Wetar island, Maluku.

The Wetar Copper Project is located on the north central coast of Wetar Island and is part of the Maluku Barat Daya Regency (MBD), Maluku Province.

Wetar Island is a remote island which supports a total population of around 9,000 people.

Finders said in its website that the geology of Wetar Island is composed entirely of Neogene volcanic rocks and minor oceanic sediments. Submarine basaltic-andesites with local pillows form the volcanic basement to the island. The basaltic-andesites are intruded by rhyo-dacite domes and overlain by dacitic lavas, tuffs and breccias, debris flows, globerigina limestones and lahar deposits.

The age of the mineralisation in Wetar has been estimated at around 4.7 million years.

Finders currently holds its interest in the Wetar Copper Project through 78% owned subsidiary, PT Batutua Tembaga Raya (BTR), which is a limited liability foreign capital investment company (PMA) industrial copper plate manufacturer.

BTR, in turn, holds 70% of PT Batutua Kharisma Permai (BKP. The remaining 30% is held by Finders’ local partners, Gabriel and Henry Mbatemooy. Under an Ore Sale and Purchase Agreement BKP has agreed to sell all the project ore to BTR. Through its shareholdings in both BKP and BTR, Finders has a 74.1% economic interest in the project.
Financial Position
In 2013-2016, the company made no sales. In 2017, it generated sales of US$129.43 million.

Its EBITDA/Sales, EBIT/Sales, EBT/Sales and EAT/Sales in 2017 stood at 76.77%, 57.57%, 48.75% and 33.33% respectively.

Its current ratio, debt to equity (DER) and debt to asset ratio (DAR) in the period of 2013-2017 tended to increase. In 2017, its current ratio, DER and DAR stood at 0.91x, 0.96x and DAR 0.49x respectively.
Transaction Highlights
– Borrower/Debtor: Eastern Field Developments
– Creditor: Standard Chartered Bank, Singapore branch
– Principal amount: US$50 million
– Interest rate: Based on LIBOR 3 months + spread of 3.5% per annum
– Loan period: 12 months after agreement signed
– Purpose: to acquire FRL shares
– Guarantor: Merdeka Copper Gold Tbk

Board Members of Merdeka Gold:

Board of Commissioners:
Chief Commissioner: Edwin Soeryadjaya
Commissioner: Garibaldi Thohir
Independent Commissioner: Richard Bruce Ness
Independent Commissioner: Dhohir Farizi

Directors Board:
President Director Adi Adriansyah Sjokri
Deputy President Director & CEO: Colin Francis Moorhead
Directors: – Gavin Arnold Caudle
– Hardi Wijaya Liong
– Michael W.P. Soeryadjaya
– David Thoms Fowler
– Rony N. Hendropriyono
– Chrisanthus Supriyo (Independent) (*)

By Roffie Kurniawan (email: roffie.kurniawan@gmail.com)

 

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