Oz Seeks January Sale of Indonesia Gold Project
March 18, 2010 - Posted in Bali vacation packages
OZ seeks January sale of Indonesia gold project
Editor: From: chinamining Click?53 Date: 2009-01-04 10:33:35
OZ Minerals Ltd, the Australian miner given a two-month extension by its banks to refinance $560 million of debt, aims to sell its Martabe gold project in Indonesia by the middle of next month, a sale document shows.
The company is seeking bids for the venture that has proven gold reserves valued at about $2 billion, according to the preliminary document prepared by the firm’s advisers, a copy of which was given to Bloomberg News.
Matthew Foran, a spokesman at Melbourne-based OZ Minerals, declined to comment.
OZ Minerals’ stock has dropped 84 percent this year as investors bet it would struggle to finance projects after global credit dried up. BNP Paribas and Bank of Scotland Plc are among banks that agreed to give OZ Minerals until February to pay off debt after the company burned through almost $700 million in six months as copper and zinc prices slid.
OZ Minerals, formed when Oxiana Ltd took over Zinifex Ltd in July, last traded at 55 Australian cents on Nov 27, giving the firm a value of A$1.7 billion ($1.2 billion).
The project in Sumatra, the main northern island of Indonesia, may be sold for at least $250 million, according to an adviser to one of the potential bidders, who declined to be identified because the process is confidential.
The project has as many as 2.3 million ounces of proven gold deposits, according to the document. The 6,591-square kilometer mining area also has 30.1 million ounces of silver, it shows. Gold averaged $872 an ounce in 2008, while silver was about $15.
Prominent HillOZ Minerals, the world’s second-largest zinc miner, received approaches for control of the A$2.5 billion Prominent Hill copper and gold mine, the company said yesterday in a statement. It’s also seeking loans to meet cash shortfalls at three of its projects. Credit markets worldwide have been squeezed after financial companies booked more than $1 trillion in writedowns and credit-market losses since last year.
Zinc on the London Metal Exchange, the world’s biggest metals market, has slumped 67 percent and nickel has lost 63 percent.
Revenue at OZ’s operation at Golden Grove in Western Australia, which mainly produces zinc, copper and precious metals, fell 41 percent to A$176 million for the half-year ended June from a year earlier. The project accounted for 35 percent of total revenue.
Fifty kilometers away from the port of Sibolga, the Martabe project needs as much as $300 million in development costs next year, two people familiar with the matter said.
The project probably has 5.9 million ounces of gold and 61.9 million ounces of silver, including the proven reserves, the document said.
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http://www.articlesbase.com/international-business-articles/oz-seeks-january-sale-of-indonesia-gold-project-707992.html
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