Merdeka Copper Gold will become Lion’s joint venture partner in the Pani Joint Venture (Pani JV) after agreeing to pay $55m cash to buy a 66.6% joint venture interest from Lion’s existing joint venture partner.
The purchase price paid by Merdeka imputes a look through value of A$39m for Lion’s 33.3% interest. Lion intends to adopt this revised valuation for its net tangible asset (NTA) disclosures, uplifting Lion’s 33.3% Pani Joint Venture interest to A$39m compared with the previous value of A$16.9 million in Lion’s most recent NTA. The pro forma September 2018 NTA backing based on the above implied valuation is 43 cents per share.
Merdeka is a leading Indonesian gold mining company which developed and now operates the Tujuh Bukit oxide heap leach project, East Java. The technical, financial and Indonesian operations expertise possessed by Merdeka are welcomed by Lion as essential skills for developing the Pani Gold Project.
Minimal impact is anticipated in the transition to Merdeka, with Merdeka’s Mining Services division currently providing technical, social and government relations support for the Pani Joint Venture.
Source: Company Press Release