quantum eyes troubled east java mine

Quantum eyes troubled East Java mine
Date May 20, 2013 - 5:10PM (0) Read later Eli Greenblat
Eli Greenblat
Retail reporter

Hong Kong-based private equity firm Quantum Pacific Capital says it is best placed to resolve a dispute over the ownership of a troubled $5 billion copper and gold project on the Indonesian island of Java, and is in negotiations to grab back as much as 80 per cent of the project on behalf of former owner Intrepid Mines.

Quantum, which has built up a 5.4 per cent stake in Intrepid and is seeking next month to tip out five of its seven directors, has defended its strategy of trying to grab board control even though it argues Intrepid's contracts with its former Indonesian joint venture partners were invalid and that the ASX–listed explorer had no legal right to the project in the first place.

Quantum managing director Greg Mazur said in a press conference on Monday that the private equity group has had ongoing discussions with the project's new owner, Indonesian billionaire Edwin Soeryadjaya, since mid 2012 and that the Indonesians were open to a "negotiated solution" to the legal mess.

"Unfortunately the current board [of Intrepid] has pursued a strategy that has not gone over well with the local title-holders and that strategy has been a very public, hostile, legal based strategy to try to get some assets back."

Advertisement Intrepid shares collapsed last year, wiping hundreds of millions of dollars from the value of the group, when its partner in the Tujuh Bukit project in East Java transferred the asset into a new company controlled by Mr Soeryadjaya.

Quantum claims over the last five years Intrepid directors have presided over the loss of $1 billion in shareholder value and the misallocation of $100 million in shareholder funds.

Intrepid believes the transfer was illegal and is seeking redress in the Indonesian courts.

Quantum has called for an EGM to dump a majority of the board, and defending its role said Intrepid was acting like a "bull in a china shop" with the private equity firm to pursue a different strategy.

"We have gone in and tried to sit down with the new local title-holders, and that has gone over well and we have confidence that there is a negotiated deal to be done here."

Mr Mazur said Intrepid never secured legal title to the project in the first place but the stake Quantum would seek to claw back on behalf of Intrepid shareholders would be "north of zero and south of 80 per cent".

Despite his view that Intrepid never had title over the copper/gold project, the ASX listed vehicle was still the best base from which to negotiate with the Indonesian partners and had some residual value in it, Mr Mazur said.

Defending its position, Intrepid claims Quantum has little to none experience of managing mining projects in Indonesia and are short-term opportunistic investors.

The EGM will be held on June 20.


Read more: http://www.theage.com.au/business/quantum-eyes-troubled-east-java-mine-20130520-2jwkr.html#ixzz2TonJywm8