BRISBANE, AUSTRALIA--(Marketwire - Aug. 7, 2012) - Intrepid Mines Limited ("Intrepid", the "Company") (TSX:IAU.TO - News)(ASX:IAU.AX - News) provides clarity with respect to aspects of the Company's interests in the Tujuh Bukit project, in light of recent unsubstantiated media reports circulating in the market.
PT Indo Multi Niaga ("IMN") acquired a mining license in the form of a kuasa pertambangan ("KP") over the Tujuh Bukit tenement in 2006. Under Indonesia's previous Mining Law, which was in effect until January 2009, foreign companies could not acquire shares in a company holding a KP.
In 2008, Intrepid entered into an Alliance Agreement with IMN and its shareholders, under which a structure was agreed where Intrepid would provide funding for the Tujuh Bukit project, and:
-- a foreign investment company would be formed between Intrepid and the
shareholders of IMN to provide mining services to IMN; and
-- if the Mining Law changed to allow for foreign investment in companies
holding mining licenses, the parties would implement a structure to
secure direct equity for Intrepid in the company holding the mining
In January 2009, Indonesia introduced Law No 4 / 2009 on Mineral and Coal Mining ("New Mining Law"), which permitted foreign companies to hold direct equity interests in Indonesian foreign investment companies holding mining licenses. Following introduction of the New Mining Law, the Company commenced discussions with IMN regarding the issue of new shares to Intrepid, in accordance with the New Mining Law and the Alliance Agreement.
The Alliance Agreement was signed by all parties in 2009 and 2010 and was amended on 24 November 2010 and 3 June 2011. The document affirmed that IMN would be converted into a foreign investment company and that 80% of the expanded equity in IMN would be issued to Intrepid.
The amended agreements envisage that IMN will apply for all necessary approvals to implement the new structure. This includes approvals from Indonesia's Investment Coordinating Board and Ministry of Law and Human Rights (including necessary recommendations from the Banyuwangi Bupati and the Ministry for Energy and Mineral Resources).
To date, IMN has not advised the Company that it has applied for the required approvals / recommendations to implement the agreed shareholding structure. Intrepid is, however, in compliance with all its agreements with IMN, and has expended $95 million in payments to the shareholders of IMN and to fund exploration activities at Tujuh Bukit, well in excess of the Company's original $50 million funding commitment. The most recent of these payments was made on 9 July 2012, at the request of IMN, 10 days before the site was shut down by IMN.
Despite protracted discussions, IMN and its shareholders have accepted the money paid under the agreements, but have consistently failed to implement the agreed shareholding structure.
Intrepid has taken legal advice that foreign shareholding in Indonesian companies holding mining licenses is permitted under Indonesian law, subject to the requisite government approvals being obtained. The Company intends to exercise vigorously its right to acquire shares in IMN.
"I want to assure all stakeholders that Intrepid has, at all times, conducted itself in a straight-forward and honest manner in these matters, with absolute adherence to the law," said Brad Gordon, Intrepid's CEO. "Simply put, the rumours and misleading statements being circulated about our negotiations, agreements and related actions with our partners and otherwise in relation to Tujuh Bukit are nefarious and unfounded at best."
This announcement contains certain forward-looking statements, relating to, but not limited to Intrepid's expectations, intentions, plans and beliefs. Forward-looking information can often be identified by forward-looking words such as 'anticipate', 'believe', 'expect', 'goal', 'plan', 'intend', 'estimate', 'may' and 'will' or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future outcomes, or statements about future events or performance. Forward-looking information may include reserve and resource estimates, estimates of future production, unit costs, costs of capital projects, and timing of commencement of operations and is based on current expectations that involve a number of business risks and uncertainties. Factors that could cause actual results to differ materially from any forward-looking statement include, but are not limited to, failure to establish estimated resources and reserves, the grade and recovery of ore which is mined varying from estimates, capital and operating costs varying significantly from estimates, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and other factors. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from those expressed or implied.
Shareholders and potential investors are cautioned not to place undue reliance on forward-looking information. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Intrepid undertakes no obligation to update publicly or otherwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect this information, except as required by law.
Colin G. Jackson (Chairman)
Ian McMaster (Deputy Chairman)
Brad A. Gordon (Managing Director)
Laurence W. Curtis (Non-executive Director)
Robert J. McDonald (Non-executive Director)
Alan Roberts (Non-executive Director)
Adrianto Machribie (Non-executive Director)
Nyla Bacon (Company Secretary)
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