Nusantara Resources (ASX:NUS) Managing Director and CEO, Mike Spreadborough, discusses the company’s IPO and Indonesian gold project.
Jessica Amir: Hello I’m Jessica Amir for the Finance News Network and joining me from soon-to-be listed gold developer, is Nusantara Resources Limited (ASX:NUS) CEO and Managing Director, Mark Spreadborough. Mike, welcome.
Mike Spreadborough: Thanks Jess.
Jessica Amir: Thanks for coming,but first off can we start with an introduction to the company?
Mike Spreadborough: Nusantara is going to be a gold explorer, developer and operator with a focus on the Asia Pacific. So we’ve been formed through the demerger of the Awak Mas gold project, out of an unlisted company called OneAsia. And Awak Mas is a big gold project, this is a project that we announced in May, it’s got a 1.47 million ounce resource. And our focus is really bringing that project into development and construction, in the next 12 months.
And as a new company, we’ve brought on board a new team. So there’s a new Board and a new executive team. They’ve got extensive focus and experience in developing gold projects in Asia, particularly Indonesia, which is where the project is located and a great technical team on geology, and doing studies.
Jessica Amir: Now to your IPO. How much do you plan to raise and when do you think you’ll list?
Mike Spreadborough: The IPO’s got a minimum of $15 million and a maximum of $20 million. We’ve been very fortunate with some great support from Lion Selection Group Limited (ASX:LSX) and also AustralianSuper. So we’ve gone into the IPO with a support base of about 13.5, so that’s a really great establishment for the company. And I think that really shows people that there are investors out there, who really believe in the project going forwards. So the IPO is well underway, we plan to list in the last week of July.
Jessica Amir: In terms of how the funds will be used, can you walk us through that?
Mike Spreadborough: The project is very advanced; we are ready to move this project into development. So the funds will take us straight into resource drilling, so we can increase the resource base. And we’ve already said through our prospectus that we expect to increase the resource by 300,000 to 500,000 ounces, through this drilling program. And we’re also going to immediately start the definitive feasibility study, so we can firm up the technical aspects of the project. And some of the funds will be used for permitting and early works, as we go forwards through the DFS.
Jessica Amir: Now to your Awak Mas gold project, where is it located and what does it contain?
Mike Spreadborough:This is a really big gold system that was discovered well over 15 years ago. It contains as I said before, well over 1.74 million ounces of gold in the resource base and that was announced in May. It’s had a lot of technical work done, multiple prefeasibility studies, there’s a lot of metallurgy work. Its located on the Island of Sulawesi in Indonesia, the project is supported by excellent infrastructure. So we have access to power, access to flights, people, good communication support and importantly ports, to allow us to construct the project very well. So it’s about 30 kilometres inland from the coast, so it’s quite accessible to the larger populations in Sulawesi.
And for those that aren’t aware, Sulawesi’s a very modern community. Makassar the capital of South Sulawesi is a large metropolis, with large universities, international flights. So it’s a very good region to build a project.So Awak Mas as I’ve said, it’s a big system, it’ll be a long-life mine, previous work has suggested a life over 10 years, producing 100,000 ounces of gold a year. So it’s a very exciting project that’s got a lot of upside for the investors, going forwards.
Jessica Amir: What makes the investment so attractive?
Mike Spreadborough: I think the first thing it is a large gold system with a long-life production base, as I said, over 10 years with exploration upside. The project’s got great infrastructure, so that allows for a low capital cost for the project to be developed. Given the uniqueness of the project, it’s actually got a very low operating cost. The mine will have a low strip ratio for the open pit; the metallurgical characteristics are very attractive. So we use less power to create the gold and we have a higher gold recovery. And finally, because we’re going to be on grid power, that also drives a low cost base.
And then I think the third thing about the project is that we’re well advanced on the approvals. Our environmental impact study has already been approved and we’ve got the environmental permit, to allow us to start construction. And we’ve also had the Federal Government in Indonesia approve the project, in moving from the study phase to the construction phase. So this is a go ready project, construction hopefully starting in 12 months time and gold production in 33 months.
Jessica Amir: What else is planned for the mine and what can investors expect in terms of news flow?
Mike Spreadborough: Immediately after listing, we plan to do a range of our resource drilling. And so that’s targeted at increasing the gold resource. So investors will see very soon, as we commence that project in August, updates and how that resource drilling is going. The feasibility study will kick off in August and investors will see announcements relating to the team that’s going to be involved, in putting together that definitive feasibility study.
We’re targeting a new resource announcement in January and then if we complete everything as planned, we’ll have the DFS completed within 12 months. And that will provide investors 100 per cent certainty, on what the economics of the project looks like going forwards. So it’s a lot of work, very fast paced development project.
Jessica Amir:Where do investors go to get more information and how do they participate in the IPO?
Mike Spreadborough: The best place is our website www.nusantararesources.com. On that website you’ll see a great update of the project, there’s some videos, there’s information on the management team and the Board of Directors. And also on that website, you’ll see a copy of the prospectus. And you’ll be able to click on the prospectus and there is an offer page that allows you to online, complete a subscription into our IPO. Or please contact Patersons Securities, who are our lead broker, or your broker.
Jessica Amir: What can investors expect over the next 12 months and longer-term?
Mike Spreadborough: We want to be a reasonable gold producer in the Asia Pacific area. So obviously this project, the Awak Mas is our immediate strategic focus. So we’re going to be focusing on bringing this project into production, over the next two years. But as we go forwards, we’ll definitely be looking for other opportunities to grow the business. Because we do think the Asia Pacific and particularly gold in that region, is a great opportunity to grow the business and provide good returns, for our investors.
Jessica Amir: Mike Spreadborough, thank you so much for the update and good luck with the IPO.
Mike Spreadborough: Thanks very much Jess.