Far East Gold attracts new strategic investor to oversubscribed raising

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By Colin Hay - 
Far East Gold ASX FEG Eurasian Resources Group strategic investor raising

Far East Gold (ASX: FEG) has once again highlighted its attractiveness to investors with the successful completion of an oversubscribed $6.9 million placement, which also added a new strategic backer of its stock.

The company undertook one of the most successful IPOs of 2022, raising $11.73 million prior to listing on the ASX on March 28.

This time the up-and-coming copper and gold explorer was swamped by investors eager to snap up the company’s stock at an offer price of $0.25 per share.

New cornerstone investor

Leading the way while taking a significant share in the company was a cornerstone investment of $4 million from Eurasian Resources Group (ERG) – an unlisted company 40% owned by the Republic of Kazakhstan.

Far East Gold chairman, Paul Walker, said the investment by a player of ERG’s calibre is a game changer for the company.

“ERG’s investment holds strategic significance for us, offering not only financial resources but also valuable operational insights on a global scale. This collaboration between ERG and FEG underscores the strength of our management team and the remarkable potential of our portfolio of advanced copper and gold projects.”

“Not only does ERG bring substantial financial capital and operational experience, but this investment also provides a firm seal of approval about the quality of our management team and the remarkable potential that we have in our portfolio of projects.”

Trenggalek copper-gold project interest

Far East Gold revealed that ERG’s main interest is in the company’s Trenggalek copper-gold project in Indonesia.

ERG has secured a right of first refusal to match a third party’s offer, should the project ever be sold.

Mr Walker said it is important to note that ERG has elected to invest at parent company level with Far East rather than at a single-project level.

Acquisition wrapped up

Far East Gold recently confirmed it had completed the acquisition of a 100% economic interest in the Trenggalek Copper Gold Project in East Java.

Covering 12,813 hectares, the Trenggalek asset includes a significant database of information from extensive, advanced exploration work previously carried out on the project.

Notably, the area also contains the granted Izin Usaha Pertambangan – Operasi Produksi (IUP-OP) mining licence for operation and production, which is valid for 10 years until 24 June 2029 with the ability for the company to extend the IUP-OP for two additional 10 year periods.

Far East is finalising plans for a program of detailed mapping and sampling prior to commencing initial drill testing of selected epithermal and porphyry-related targets. These include the Sumber Bening, Singgahan and Sentul-Buluroto prospect areas.

ERG a major global business

Headquartered in Luxembourg, ERG owns integrated mining, processing, energy and logistics operations for a range of commodities across Eurasia, Africa and Brazil. It has operations in over 16 countries with a global workforce of over 70,000.

In 2021, the company reported revenues of approximately $13.3 billion and an underlying EBITDA of approximately $6.5 billion – around twice the size of Newcrest Mining (ASX: NCM).

ERG is one of the world’s top 3 producers of cobalt and produces more than 200,000 tonnes of copper annually.

Exploration funds

Far East will use its new capital injection to accelerate exploration activities at the Woyla and Trenggalek copper-gold projects, while progressing permitting and technical studies at the Wonogiri copper-gold project in Indonesia.

The funds will also be used to support local community and stakeholder engagement, and to meet environmental benchmarks across all projects.

Canaccord Genuity (Australia) and Ord Minnett acted as lead managers to the placement with Reach Markets as co-manager.