Newcrest get the go on another Indonesia JVJAKARTA (Commodity Online) : Indonesia on Thursday gave its final approval for a gold project to be jointly operated by UK’s Sumatra Copper & Gold ((ASX: SUM) and Australia’s Newcrest Mining ((ASX: NCM) .
Both the companies earlier completed joint venture arrangements for exploring PT Bengkulu Utara Gold’s 100,000 hectare exploration IUP located in the Bengkulu Province.
Drilling is to start this month at site on the island of Sumatra. Newcrest spending $12 million over five years, but, so far it has only subscribed for the $1.75 million minimum spend commitment.
As per the deal Newcrest will own 70 percent of interest in Sumatra’s Tandai gold explorations project.
Jocelyn Waller, managing director of Sumatra, said the finalization of the Tandai joint venture arrangements mean that the envisaged exploration of this highly prospective epithermal system can now be expedited.
Sumatra Copper has an economic interest of up to 92.5 per cent in three projects in Sumatra. The company's main focus is to explore for gold and silver at its Tembang, Tandai and Sontang sites.
The $1.75 million subscription by Newcrest constitutes the minimum spend commitment by the company over the next 18 months.
After this period, Newcrest can boost equity investments up to a total of $12 million to maintain a 70:30 ownership ratio of PT Bengkulu Utara Gold.
In regards to Tembang, Newcrest did not exercise an option to acquire a 25% stake in the project for $10 million, of which $500,000 was a non-refundable deposit.
Sumatra Copper considers this decision by Newcrest to be an opportunity for the company.