Macmahon Holdings Ltd Agreement with PT Amman Mineral Nusa Tenggara
Agreement with PT Amman Mineral Nusa Tenggara: Macmahon Holdings Ltd (ASX: MAH) stock rallied 10% on March 01, 2017 driven by heads of agreement signed with PT Amman Mineral Nusa Tenggara (AMNT) for acquisition of certain assets from AMNT. The group along with AMNT will make a life of mine, alliance style mining contract for the Batu Hijau copper-gold mine in Indonesia (Mining Contract). Initial scope of work (for Phase 7 of the Batu Hijau open-pit) is forecasted to have an order book of over US$2.7 billion over the life of the Batu Hijau operation (with about US$2.0 billion occurring over the first five years from January 2018). Moreover, the work could also include the development of the Elang deposit (which is over 60km east of Batu Hijau) and the Nangka prospect which are controlled by AMNT. The group would acquire some current equipment at Batu Hijau from AMNT (including loading equipment, trucks, ancillary and support assets and usable inventory) (Sale Assets) based upon an independent valuation. As per the group’s preliminary internal estimates, the sale assets are forecasted to be worth of over US$150 million, subject to variation. On the other hand, CIMIC Group Investments Pty Ltd has made a fourth supplementary bid to acquire fully paid ordinary shares in MAH, with an offer price of 14.5 cent per MAH share. Meanwhile, it is noted that MAH’s financial performance has deteriorated in 1H17 with negative loss after tax of $23.3 million. Accordingly, MAH’s shareholders have been encouraged to accept the CIMIC’s offer.
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