Newcrest offloads shares in Gosowong to Antam

Newcrest has decreased its stake in the Gosowong mine in Indonesia, selling a 7.5% stake in the mine to partner Antam.

The move shifts the Indonesian miner's stake to 25%, with the remaining 75% still in the hands of Newcrest.

Newcrest stated that "Antam will acquire [the stake] in PT Nusa Halmahera Minerals (PTNHM), which holds the contract of work for the Gosowong gold mine".

As part of the deal Newcrest will receive US$160 million, which is split between US$ 130 million in cash on completion of the deal and an additional US$ 30 million subject to a further one million ounces of gold being defined by December 2017.

Antam's president, Alwinsyah Lubis, explained that "the Gosowong mine is an outstanding mine and we see that taking a greater stake in the mine will further enhance our portfolio; we have a longstanding and effective working relationship with Newcrest and look forward to that relationship continuing".

Brian Fletcher, Newcrest's Indonesia and Papua New Guinea general manager adding "Antam's acquisition of a further 7.5% of Gosowong allows us to deepen our relationship with Antam and to realise a return on our investment in the mine at a fair market value.

Following the Indonesian Government's surprise change to mining regulations earlier this year fears were raised over the affect it would have on Newcrest's Gosowong mine, after changes to the laws would force some companies to control a maximum 49 per cent of their project, with the Government owning the majority share.

While the Government said the move was about ensuring the benefits of mining stayed within the country, several experts said it would seriously deter investment in the region.

However Newcrest stated that the changes would not affect its operations in the region.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.