G Resources sells gold mine, to expand in financial services

G-Resources

23/11/2015 06:56

MELBOURNE, Nov 23 (Reuters) - Hong Kong-listed G-Resources 
 1051.HK  has agreed to sell its main asset the Martabe gold 
mine in Indonesia, for $775 million, including assumed debt, to 
a consortium led by a private equity firm headed by its vice 
chairman.  
    With gold prices having slumped by about a third since the 
Martabe mine started producing in 2012, G-Resources put the mine 
up for sale, looking to use the proceeds to expand into lending, 
securities brokering and property investments.   
    On Monday it said it would sell the mine to a consortium led 
by EMR Capital with Farallon Capital and two Indonesian 
investors, for $775 million, including assumed debt, plus $130 
million if gold prices average $1,500 an ounce over a continuous 
12-month period before January 2019. 
    Melbourne-based EMR Capital's chairman Owen Hegarty is vice 
chairman of G-Resources. Both sides said Hegarty was officially 
excluded from the transaction and wasn't party to any 
discussions. 
    Hegarty has a long history with the mine, which he tried to 
buy from Australian miner OZ Minerals after his company Oxiana 
Resources merged with another company to form OZ Minerals.  
    OZ sold the mine to G-Resources' predecessor instead in 
2009, who then hired Hegarty. 
    EMR Capital Chief Executive Jason Chang said the firm has 
long eyed Martabe as a possible investment, which will be the 
sixth investment for the private equity firm's fund, adding to 
its copper and potash assets. 
    "We are positive on gold," Chang said. 
    The Indonesian partners in the investment are entities owned 
by Martua Sitorus, who is deputy chairman of agribusiness group 
Wilmar International  WLIL.SI , and the families of Robert and 
Michael Hartono. 
     
 
 (Reporting by Sonali Paul; Editing by Michael Perry) 
 ((Sonali.Paul@thomsonreuters.com; +61 3 9286 1419; Reuters 
Messaging: sonali.paul.thomsonreuters.com@reuters.net)) 
 
Keywords: G RESOURCE M&A/