Bumi Resources Minerals Makes Successful Debut on the Market

Bumi Resources Minerals Makes Successful Debut on the Market ; Jakarta. Bumi Resources Minerals, a non-coal unit of mining giant Bumi Resources, soared as high as 29 percent on its market debut on Wednesday before closing at Rp 700, 10 percent above its opening price, on the back of plans to kick-start production next year.

Herwin Hidayat, head of investor relations at BRM, said the company had recently secured approval to start exploration at its zinc mine in Dairi Prima, North Sumatra, and at gold and copper mines in Gorontalo in northern Sulawesi.The company had set aside $100 million for the Dairi Prima mine, which was estimated to have reserves of 20.1 million tons, he added.

Herwin said the company would also start production at its iron ore mine in the West African nation of Mauritania at the end of next year, with annual output expected to reach 600,000 tons. The company plans to invest $40 million in the Mauritania mine, which has estimated reserves of 100 million tons.

“BRM’s strength is in sustainability mining,” Herwin said. “Our mines will start production next year, one at a time, and start producing more revenue. In the meantime, our main income comes from our gold mine at Newmont Nusa Tenggara.”

He said the company would issue a forecast for total revenues at the end of the month.

BRM has allocated $240 million in capital expenditure to develop five mining projects in Indonesia and West Africa.

It said earlier its IPO was oversubscribed by 29.89 times, with keen demand from investors for mining stocks. The company raised Rp 3.6 trillion ($400 million) from the sale of 3.3 billion shares, or 18.16 percent of the company. It also issued 2.2 billion warrants.

The company offered its stock at Rp 635 per share. For every three shares investors bought, the company also offered two warrants, which would entitle them to buy the company’s stock at Rp 700 per share for a period of three years after May 2011.

Frederik Daniel Tanggela, an analyst at Sucorinvest Central Gani, said that while BRM had yet to begin mass production, there was still plenty of upside. “(BRM) has good prospects for growth with upcoming projects that investors expect will succeed,” he said. “The projects are drawing investor attention, boosting the stocks on its trading debut.” For the latest updates PRESS CTR + D or visit Stock Market news Today

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