West Wits Mining Ltd. signed a heads of agreement to give a 54% stake in its Derewo River gold project in Indonesia to TME Group Pte. Ltd., which will facilitate the ongoing maintenance and development at the operation.
As a result, West Wits will dilute its equity interest in the project holding company, PT. Madinah Qurrata'ain, to 10% from 64%, which will be free carried until all feasibility work is completed.
Far East Venture Group, which is being represented by TME Group, will assume responsibility for managing and funding the project until feasibility. The group has a focus on investing and fundraising to develop mining assets in Southeast Asia.
The dilution is expected to take place in the coming weeks upon the implementation of the agreement.
West Wits added Aug. 16 that if the group fails to progress the project to feasibility within three years, it may call for a re-transfer of its shares and reinstate its original equity holding.
Meanwhile, previous loans from West Wits to the holding company will be repaid through profits from the project.
In October 2016, the company granted a 30% interest in Derewo River to PT Tobacom Del Mandiri as part of a business alliance agreement.