Provident joins $138m bid for Indonesian mining project
Provident Capital has joined a consortium of investors in a bid to acquire Finders Resources that values the Indonesian mining project developer at about A$177.7 million ($138 million).
The consortium is willing to pay A$0.23 per share for the Australia-listed company. The stock has traded in a range of A$0.21-0.25 for the past month and was steady at A$0.25 as of mid-morning on October 9.
The proposed investment brings Provident together with Indonesian miner Merdeka Copper Gold and Saratoga Investama Sedaya, a listed vehicle controlled by the founders of Saratoga Capital, which contains legacy assets that predate the PE firm's institutional funds. In 2014, the Providence and Saratoga Capital bought a majority stake in Merdeka as part of an agreement to settle an ownership dispute.
The consortium, known as Eastern Field Developments, is currently the largest shareholder in Finders with about a 20% interest. Terms of the offer require that Eastern obtain at least a 50% stake in the company after receiving foreign investment approval from the Australian government.
“In the event the offer is unsuccessful, then Provident and Saratoga will review their Finders’ interest and may divest all their Finders shares and withdraw their involvement in Finders,” David Fowler, a director for Eastern, said in a statement.
Finders’ main asset is the Wetar copper project, located in a remote area of Indonesia’s eastern Maluku province. The site contains 216,000 metric tons of copper resources and has been estimated to be worth $234 million at current copper prices. In 2011, it received copper mining and processing permits valid for up to 20 years.
Provident is also active in Indonesia as a strategic partner to JD.com, which has substantial logistical infrastructure in the country. The GP’s other holdings across the region include internet and telecom towers.
Merdeka recently received a $25 million investment from Singapore’ Pierfront Capital to support the development of the company’s Tujuh Bukit project, a gold and copper mining asset.
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