Indonesian investment group Provident Capital has to supply a debt and equity funding package of approximately A$63m ($64.6m) to Indonesian mining group Sumatra Copper & Gold.
Provident currently holds a cornerstone 26 per cent stake in Sumatra. The investment will go towards construction of the Tembang Project, a gold and silver mine.
Provident said it will take a placement of up to 38 million Sumatra CDI’s at 22 cents per Sumatra CDI, to raise A$8.36m. It will also underwrite a one-for-three entitlements offer to be undertaken in April/May 2013, to raise a further A$20m.
The capital raised will be used to repay a debt facility from Macquarie and maintain the Tembang Project development schedule, Sumatra said. Tembang will be fully funded for the development following a recently agreed $35m senior project debt facility from Credit Suisse.
Sumatra managing director Julian Ford said the funding package had been structured to complement the timing of the final permitting process for the Tembang project, with the entitlement offer expected to be completed by the end of May.
“This is a pivotal moment for Sumatra and for the development of the Tembang Project. We are absolutely delighted that our major shareholder Provident Capital has agreed to underpin this equity raising, both through an initial placement and by fully underwriting the subsequent entitlement offer. Provident’s support for the project is demonstrated by their willingness to subscribe for shares at a premium whilst most junior miners are forced to accept substantial discounts when placing stock in today’s market.
“Since coming onto our share register last year, Provident has provided invaluable assistance to us in operating in Indonesia and they continue to provide highly valuable strategic, financial and technical support. Their reputation and track record as a highly successful private equity group in Indonesia is impeccable.
Sumatra’s project portfolio encompasses a pipeline of projects ranging from greenfields exploration projects to brownfields, near-production opportunities.
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