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West Wits to grant 30% of Derewo River project stake to new partner

West Wits Mining Ltd. will grant a 30% interest in its Derewo River alluvial gold project in Indonesia to PT Tobacom Del Mandiri, or TDM, as part of a business alliance agreement.

TDM will be responsible for the granting of clean and clear certificates and forestry permits for Derewo, and will manage security at the project site, according to an Oct. 12 release.

Under the agreement, TDM will receive a 30% equity interest in West Wits subsidiary PT Madinah Quarataa'in, which holds the Derewo licenses.

In January, the company reported that equipment at the Derewo River project was damaged, but did not reveal the cause.

West Wits said it intends to refurbish the damaged heavy equipment and re-establish its initial alluvial circuit following the receipt of the clean and clear certificates, with costs to be repaid from gold sales prior to any dividends.

Following the transaction, which is expected to take up to six months to complete, West Wits will have a 50% stake in the project, TDM a 30% interest and PT Intan Angasa Aviation the remaining 20%.

TDM will also have the right to appoint one director to PT Madinah's board as well as one commissioner.