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Gold/Mining/Energy : AGM (VSE) AROYF (OTC) Ag Armeno Mines & Minerals
AGM 175.24-0.6%Jan 9 9:30 AM EST
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To: Richard Mazzarella who wrote (297)8/4/1999 3:07:00 PM
From: Ed Fishbaine  Read Replies (1) of 317
 
Richard

>>Indonesia will never let them lose some stake<< I dont understand what this means. Who is them? If you mean Merukh and Co how is it that Indonesia allowed Newmont to have a stake?

For your information when Indonesia allows farm outs to foreigners, such as Newmont, there is built into the contract, a divestiture clause. In the case of the BATU HIJAU after the 4th year portions of Newmont's holding have to be sold to Indonesian national(s). By the 10th year Newmont's original holding is reduced by slightly more than 50%.

Should a settlement with AGM result in a portion of Merukh's interest being transfered to AGM my guess is that the courts would stipulate a standard divestiture clause. An interesting possibility, strictly my own conjecture, is that the settlement might duplicate, in a modified manner, the original contract between AGM and Merukh. In this case there may be no divestiture clause because Merukh is an Indonesian.

In any event, the value of a settlement, even with a divestiture clause, would be quite enormous. When this mine is rated at 25 years in reserves you can bet safely that it will go on for 100+ years.

Regards, Ed
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