Australian Fight on $5 Billion Tujuh Bukit Mine Continues

gold ore

(Mining Weekly) – Australia is trying to have a 5 billion gold prospect in Indonesia back by engaging in a tough fight.

The Australian Intrepid Mines Ltd mining company was kicked out from a $5 billion copper and gold prospect, Tujuh Bukit, in East Java. Intrepid partner, an Indonesian company, transferred the mining leases into a new company. Intrepid say this move violates transfer laws while the Indonesians say it is a legitimate action.

Intrepid spent around $95 million, almost two folds of what the Australian company agreed to spend initially to validate the find over five years. Now, the Australian company lost the right to drill the site last year, and the company’s worth now only 14% of its value in 2011.

The Australian company’s grave mistake was not being present on the ground to protect its interests. They over-expanded in proving the find before finalizing agreements to protect the project.

The copper-gold mine project belonged to Intrepid Mine, the Australian businessman Paul Willis and the Indonesian companies Maya Ambarsari and Reza Nazaruddin in 2008. The huge prospect of the mine turned them all greedy. The project expectations might hold 30 million ounces of gold.

The Australian Intrepid bought Willis share by $2 million when he tried to bring major Indonesian companies without permission of his partners. The Indonesian partners transferred the exploration license to a new company sold most of to Edwin Soeryadjaya, a powerful businessman, according to Reuters.

Intrepid hope to control the board and carve-out Soeryadjaya by defeating a 5.4% shareholder push from Hong Kong-based Quantum Pacific, the most recent battle the Australian company has to fight. Indonesian experts believe that Intrepid will be lucky to break-even at $100 million.