The Nusantara Resources Ltd (ASX: NUS) share price is rising today after two positive announcements. The mining company's project financing has taken a significant step forward and Indonesian company Indika will be welcomed at a project level. The Nusantara share price is currently trading 1 cent higher at 33 cents, an increase of 3.13%.
What does Nusantara do?
Nusantara is an Australian mining company that develops and operates gold projects within the Asia-Pacific region. The company owns a 100% interest in the Awak Mas Gold Project in Indonesia, which hosts an open pit mine with significant gold prospects. An ore reserve update is under way and expected to be delivered in Q2, 2020.
Project financing
The Nusantara share price is up on news that an independent expert report (ITE) on the Awak Mas Gold Project to support project financing has been completed. The ITE report will allow formal engagement with interested parties, advancing towards a complete project financing solution.
In addition, regulatory approval has now been received for Indika Energy to become a shareholder in the Awak Mas project vehicle. The agreement gives Indika a 25% interest in the project vehicle following an investment of US$15 million. Nusantara, along with its partner Indika, are seeking to build a syndicate of project financiers interested to provide senior debt for Awak Mas.
Nusantara managing director Neil Whitaker said:
This ITE report and Indika's equity investment of US15 million for 25% of the project are significant steps for Awak Mas. Nusantara warmly welcomes Indika into the Awak Mas project vehicle, noting their proven track record in developing, operating and financing mining projects in Indonesia. In particular we look forward to leveraging their experience and proven ability to secure bank financing.
What now for the Nusantara share price?
The deal with Indika represents a significant step forward for Nusantara. This is just the first part of Indika's investment with a potential of US$25 million to come once the mine is in construction. The company will decide on whether to mine in early 2021 with production likely to occur in 2022. The good news has seen the Nusantara share price jump by 3.13% to 33 cents.
