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Golden Energy sells 0.95% stake in Australian gold miner for A$9m

MAINBOARD-LISTED mining company Golden Energy and Resources (Gear) has completed an on-market sale to dispose of a 0.95 per cent interest in Australia-listed gold miner Westgold Resources for A$9 million (S$8.7 million) in cash.

Gear now holds a 1.59 per cent stake in Westgold, down from 2.54 per cent previously, according to the former's regulatory update on Monday.

Westgold and its subsidiaries explore, develop and operate gold mines, primarily in Western Australia. The Westgold group owns three operating gold projects in Meekatharra, Cue and Fortnum.

Gear said it will record a gain of disposal of about A$1.5 million from the transaction, based on the selling price of A$2.25 per Westgold share over the initial cost of investment of A$1.885 per Westgold share.

This gain will be partly offset by foreign exchange loss due to movements in the exchange rate of the Australian dollar to the US dollar between the date of the initial investment and the date of the disposal, resulting in a net gain of around US$270,000.

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Gear plans to use the proceeds from the deal for future investments and for general working capital purposes.

On the rationale for the disposal, Gear said it is of the view that it should capitalise on opportunities to monetise its investment in the Australian firm.

Gear added that the latest sale of the 0.95 per cent stake together with previous similar transactions will allow it to realise returns on its Westgold investment. From February to June, Gear has been reducing its shareholding in Westgold through on-market sales.

Gear is one of Indonesia's largest coal reserve owners. Its businesses include the mining of thermal coal through Golden Energy Mines in Indonesia; the mining of metallurgical coal through Australia-listed Stanmore Coal as well as the mining of gold through Ravenswood Gold in Queensland, Australia; and various investments in renewable energy projects in Asia.

Gear shares ended flat at 16.4 Singapore cents on Friday.

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