Robust Resources (ASX: ROL) has completed the sale of a 22.5% interest in the Romang Island project to Salim Group company PT Kilau Sumber Perkasa (PT KSP) for A$31.6 million announced earlier this year.
Definitive agreements have been signed with PT KSP, a member company of the Salim Group, to acquire a strategic 22.5% shareholding in P.T. Gemala Borneo Utama (PT GBU), the local Indonesian company owing mining rights over Romang Island. Robust shareholders will retain a 77.5% interest.
Under these agreements PT KSP will subscribe for shares in PT GBU in five equal installments, the aggregate investment amount being AUD $31,569,544.
The Salim Group has also acquired 1.76 million shares in Robust Resources from Trafford Resources (ASX: TRF) for a total consideration of $3 million, equal to a purchase price of $1.70 per share.
This will take the total Salim Group investment in Robust and its associated companies to A$34.6 million.
Additional funding will bring Robust Resources' cash balance to more than A$50 million, supporting the company's drill program at the North Romang Project in Indonesia, after an extensive year long preliminary geophysical exploration campaign.
The partnership with PT KSP will underpin early development options for Romang and satisfy future statutory requirements for local (Indonesian) participation. The company can now develop the project through to feasibility and development phases.
Gary Lewis, Robust’s managing director, said “this transaction with PT KSP is a key milestone for Robust. Over the past six months we have worked together to not only finalise the terms of this transaction, but we are also pursuing options for early development of the Romang Island Project.
“The fact that the Salim Group has also invested directly in Robust Resources is very pleasing, as it confirms their support for the company and its future prospects.”
The Salim Group is one of Indonesia’s largest diversified companies with interests in logistics, infrastructure, property and commodities.
The group has indicated that it intends to strengthen its presence in the Indonesian resources sector and it will use its partnership with Robust as a platform for this investment.
North Romang has the potential to dwarf the company's Lakuwahi project which is part of South Romang, and located just 15 kilometres south-south-west of North Romang.
The Induced Polarisation (IP) anomaly Robust has identified at North Romang is 4.5 kilometres long, open in three directions (the fourth direction is in fact the sea, so it's open in all directions including at depth) and extends beyond 500 vertical metres.
Robust now has 7 diamond drills active on the Island, with another two planned for the current financial year. The exploration budget for financial year 2012 is a healthy $15 million.
With Robust set to define a maiden resource later in the year, the company will further explore the Island to try and ascertain the boundaries of the mineralisation.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/18121/robust-resources-closes-a316m-investment-in-romang-island-from-salim-group-18121.html