Intrepid Mines Ltd., the Australian company that lost control of its 80 percent stake in Indonesia’s Tujuh Bukit copper-gold deposit in 2012, will receive $80 million to settle the dispute.
A deed of settlement, subject to shareholder approval, will end all legal action in relation to the project and result in Intrepid selling its interests to Kendall Court Resource Investments Ltd., the Spring Hill, Queensland-based company said today in a statement.
“While this is a disappointing conclusion to our efforts on the project, I am confident that our shareholders will see the benefit of eliminating the current risks we face in Indonesia,” Chairman Ian McMaster said in the statement.
Intrepid agreed with Indonesia’s PT Indo Multi Niaga in 2008 to work on developing its stake in the Tujuh Bukit deposit in East Java. The owners of Indo Multi later sold the mining license to a separate company, which disputed Intrepid’s claim on the project, which may contain 25 million ounces of gold and 15 billion pounds of copper.
Intrepid fell 6.9 percent, the most since Nov. 4, to 27 Australian cents at the close in Sydney.
Exploration spending on the project totaled $106 million at the end of December 2012, Intrepid said in a Feb. 2013 filing. Intrepid’s board agreed to resolve the standoff, saying it’s in the “best interests of our shareholders to settle the disputes now and recover a substantial portion of the funds previously invested,” McMaster said in the statement.
The company had begun arbitration proceedings at the Singapore International Arbitration center against PT Indo Multi Niaga and also lodged appeals in relation to the dispute at the State Administrative Tribunal in Surabaya and at the South Jakarta District Court, it said last month.