Newcrest Mining has agreed to sell its 75 per cent stake in the Gosowong mine in Indonesia to PT Indotan Halmahera Bangkit.
The proposed transaction would allow Indotan to acquire Newcrest’s stake in the Indonesian gold and silver mine in North Maluku, 2450 kilometres from Indonesia’s capital city Jakarta.
Indotan will also gain Newcrest’s 100 per cent interest in PT Puncakbaru Jayatama, which employs exploration workers all over Indonesia.
The deal is worth $90 million, and comprises a $5 million cash deposit paid on sale execution, $55 million cash payable upon completion and $30 million deferred cash.
The sale follows a strategic review and to comply with the amended Gosowong contract of work, which states that Newcrest must sell down to at least 49 per cent of the mine by June 30.
Newcrest managing director and chief executive Sandeep Biswas said this outcome delivered the best value for Newcrest shareholders and gave Gosowong employees and community a clear future path.
“Gosowong has been a valued part of our operating portfolio since we discovered it in 1993, with first production commencing in 1999,” Biswas said.
“Over the last 30 years we have built valued relationships with our Indonesian joint venture partners, suppliers, employees, government and community stakeholders.
“I would like to extend my sincere thanks to all our Gosowong employees who have contributed so much to the success of Gosowong and Newcrest over the past few decades.”
Newcrest expects to recognise a $44 million loss on divestment of its 75 per cent interest in Gosowong.
The company produced 190,000 tonnes of gold at an all-in sustaining cost of $1099 per ounce at Gosowong in the 2019 financial year.
The mine has provided employment for 2000 workers, of which 98 per cent are Indonesian.