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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.

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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.