A US$35 million deposit has been paid by a consortium led by private equity firm EMR Capital to progress the US$775 acquisition of a 95% stake in the Martabe Gold-Silver Project in North Sumatra, Indonesia, held by Hong Kong-based G-Resources.

With gold and silver prices having slumped since the Martabe mine started producing in 2012, G-Resources decided to seek buyers for the project with the intention of using the proceeds to expand into lending, securities brokerage and property investment.

The consortium announced its intention to purchase the mine in November with the deposit paid on December 3 into an escrow account operated by the escrow agent, in accordance with the terms of the Sale and Purchase Agreement and the Deposit Agreement.

The consortium is led by Melbourne-based EMR Capital and comprises Farallon Capital and two Indonesian investors. The Indonesian partners are entities owned by Martua Sitorus, who is deputy chairman of agribusiness group Wilmar International, and the families of Robert and Michael Hartono. EMR holds 61.4% of the consortium, Farallon 20.6%, Martua Sitorus 11% and the Hartono families 7%.

The sale includes assumed debt along with a further $130 million if gold prices average $1500 an ounce over a continuous 12-month period before January 2019.

EMR’s chairman is Owen Hegarty, who is also vice-chairman of G-Resources. He was officially excluded from the transaction and was not party to any discussions.

Owen Hegarty has a long history with the mine. He tried to purchase it from Australian miner OZ Minerals after his company Oxiana Resources merged with another company to form OZ Minerals. OZ Minerals sold the mine to G-Resources’ predecessor instead in 2009, which then hired him. The provincial government owns the remaining 5% of Martabe.

EMR Capital’s chief executive Jason Chang said the firm had long considered Martabe as a possible investment owing to its strong performance to date and its growth potential, as well as EMR being a strong believer in gold. He said it would be the sixth investment for the private equity firm’s fund, adding to its copper and potash assets.

The deal propels EMR, which was founded by Jason Chang and Owen Hegarty, into being one of the biggest resources private equity groups in the region.

Meantime, G-Resources’ Indonesian subsidiary PT Agincourt Resources, which operates Martabe, said it would start expanding its mining operations next year to include the nearby Barani Pit as well as the current Purnama Pit. The Barani deposit is not as large as Purnama.

The company produced 156,316 ounces of gold and 1.29 million ounces of silver in the first half of this year, surpassing half of its year-end targets of 285,000 ounces of gold and 2.3 million ounces of silver target.