Following the approval of its recent investment deal with Minmetals, OZ Minerals has sold one of its most prized assets to China Sci-Tech Holdings Limited (CST) for US$211 million cash.
The Martabe gold and silver project in North Sumatra, Indonesia was initially part of the Minmetals deal, but, along with Prominent Hill, was excluded after Treasurer Wayne Swan blocked the original deal.
According to OZ, CST will pay an initial deposit of US$10 million and the further US$201 million upon completion of the transaction, which is expected to be in early June.
OZ said that CST will also reimburse the miner the US$7.5 million it has spent on the project from April 1 to the completion date.
The sale will help OZ Minerals in the financial issues it has been facing for the past several months, managing director and CEO Andrew Michelmore said.
“The proceeds from the sale will make an important contribution to addressing OZ Minerals’ refinancing issues,” he said.
“We are pleased that, in CST and its Indonesian partners, we have been able to transact with a team that has been able to pay an acceptable price after a competitive bidding process and who also understand and respect the requirements of doing business in Indonesia.”
The sale, which is subject to approval from Australia’s Foreign Investment Review Board, is not conditional to financing with CST making the purchase from its own existing cash reserves.