Bakrie Group’s gold mining subsidiary, PT Bumi Resources Minerals Tbk (BRMS), is targeting a loan facility worth between USD 200 million and USD 300 million to initiate an underground mining project in Palu by early 2025. A portion of the loan, estimated at USD 50 million to USD 100 million, will also be allocated for mining and exploration activities at Gorontalo Minerals.

When asked to confirm details about the loan facility, BRMS President Director, Agoes Projosasmito gave a brief response. “We already know about that [loan issue],” Agoes stated on Monday (9/12/2024).

BRMS Director and Chief Investor Relations Officer, Herwin Hidayat explained that the company is awaiting final data on mineral reserves in Poboya, Palu, calculated using the Joint Ore Reserve Committee (JORC) standards. The updated study, prepared by a mining consultant based in Perth, Australia, is expected to be completed by the end of this year.

“We hope that the gold content from underground mining prospects will be higher than what we have been processing so far,” Herwin said on Monday. However, he refrained from providing additional details about the funding sources, capital expenditures, or the loan facility required for BRMS’ subsidiary, PT Citra Palu Minerals (CPM), to execute the project. “Further information will be disclosed in due course,” he added.

BRMS’ plans for a loan facility come on the back of strong financial performance in Q3/2024. The company posted a net profit attributable to the parent entity of USD 15.65 million (Rp248.06 billion at an exchange rate of Rp15,847 per USD), representing a 49.51% year-on-year (YoY) increase from USD 10.46 million (Rp165.91 billion) in the same period last year.

Revenue surged 231.27% YoY to USD 108.47 million (Rp1.71 trillion), up from USD 32.74 million (Rp518.92 billion) in Q3/2023. The growth in revenue and profit was driven by booming gold production in the third quarter of 2024. BRMS reported a gold production volume of 45,366 troy ounces by the end of Q3/2024, nearly doubling the 23,270 troy ounces produced throughout 2023.

The average selling price (ASP) of BRMS’ gold also saw a significant increase, reaching USD 2,347 per troy ounce in Q3/2024, compared to USD 1,930 per troy ounce in 2023.

According to research by BRI Danareksa Sekuritas analyst Timothy Wijaya, BRMS’ underground mining project, managed by CPM, will begin in Q1/2025. The project’s financing is estimated at USD 150 million to USD 200 million. The remaining funds of around USD 50 million to USD 100 million will be allocated for drilling and exploration in Gorontalo Minerals.

BRMS has set an ambitious full-year gold production target of more than 55,000 troy ounces for 2024, with projections to increase to 65,000 troy ounces in 2025.

In September 2024, CPM reported an increase in the gold content and grade from mining locations at River Reef and Hill Reef in Poboya, Palu. The River Reef site revealed an average gold grade of 4.9 grams per tonne, with a total mineral resource of 4.2 million ounces of gold. Notably, 89% of this gold is expected to be extracted using underground mining methods.

Additionally, the Hill Reef location contributes an estimated 329,000 ounces of gold to the company’s resources.

With the loan facility in sight and ongoing resource evaluations, BRMS is poised to strengthen its position in Indonesia’s gold mining sector while scaling up production and exploration activities in 2025.

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