Oxiana experts size-up Martabe Andrew Trounson March 23, 2007
SENIOR Oxiana mining engineers and geologists will soon be flying to Indonesia as the company takes control of $415 million target Agincourt Resources and its key asset, the Martabe gold project in North Sumatra. But while Agincourt was set to complete a bankable feasibility study on the 270,000 ounce a year Martabe development by the end of the month, Oxiana is going to delay that as it works to get up to speed on the project. Agincourt had previously estimated the cost of Martabe at $US165 million ($206 million) with first production in 2009.
Another priority will be to access the value of Agincourt's less strategic 110,000 ounce a year Wiluna mine in Western Australia.
While Wiluna may offer exploration upside for Oxiana, there is speculation it could decide to take advantage of a buoyant gold market to sell the operation.
However, Wiluna does have additional value to Oxiana as an infrastructure provider to Agincourt's 57 per cent owned Nova uranium deposit nearby.
Yesterday Oxiana, under managing director Owen Hegarty, declared its scrip bid unconditional after securing over 50 per cent acceptances.
Oxiana last month cut its minimum acceptance level from 90 per cent, and sought to hurry along acceptances by reminding Agincourt shareholders that they stand to share in Oxiana's final year divided if they accept before the April 17 record date.
The 5c a share Oxiana dividend is worth 3.25c a share in Agincourt shares, or a total of $7 million.
Oxiana yesterday said it had 55.8 per cent acceptances, including US gold giant Newmont's 19.9 per cent stake and the 10 per cent held by the board that has backed the takeover.
And late yesterday hedge fund Monterrey Investment Management tipped its 5.8 per cent stake into the bid.
The acquisition of Agincourt adds some 6.7 million ounces of gold to Oxiana's resource base, almost doubling its gold resources to 13.8 million.
At Martabe, Oxiana is hoping to replicate the success of its Sepon gold and copper development in Laos.
The Martabe deposits are in the forested hills above the town of Batang Toru, which is on a so-called highway and some 30km from the Sibolga deepwater port.
However, the decentralised, sometimes chaotic nature of Indonesian politics is completely different from communist-controlled Laos.
OXR Price at posting:
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