Golden Energy and Resources shells out A$67 million for 10% of Aussie gold miner

INDONESIAN coal miner Golden Energy and Resources (GEAR) has agreed to subscribe for 36 million new shares in Australia-listed gold miner Westgold Resources Limited for A$67.86 million (S$69.28 million).

This will give GEAR a 10 per cent stake in the enlarged share capital of Westgold, turning GEAR into one of Westgold's largest shareholders.

GEAR will also have the right to nominate a person to be appointed as a director of Westgold.

The subscription shares will be issued in three tranches to GEAR at a price of A$1.885 - representing a 3.3 per cent premium to the volume-weighted average price of A$1.8248 for Westgold shares on Nov 29. The third and final tranche is expected to be completed on or before Jan 31 next year.

GEAR group chief executive Fuganto Widjaja said that the investment into Westgold is a strategic move to widen its coal-focused mining business to include counter-cyclical commodities.

The proposed subscription will be fully funded by GEAR's existing loan facility and internal resources.