Australian gold company Agincourt Resources' $80.25 million purchase of the Martabe gold and silver project in Indonesia would transform the company, Managing Director Peter Bowler said in a statement Monday. Agincourt earlier released details of the acquisition from US major Newmont Mining, which was reported by Platts on July 14, 2006.

"The acquisition of Martabe propels Agincourt into the next league of gold developers and producers with a total resource base exceeding 7 million oz," Bowler said. "The addition of Martabe to Agincourt's existing operating gold mine at Wiluna, Western Australia and the Andorinhas gold development project in Brazil makes AGC the seventh largest ASX-listed gold company on a resource ounce basis. Once in production, Martabe has the potential to increase AGC's total gold production to 500,000 gold equivalent ounces per annum."

Agincourt has unveiled a A$150 million ($113 million) capital raising to finance the acquisition and provide funds for preconstruction work over the next two years, such as the completion of the bankable feasibility study and environmental approvals.

Martabe is located in Sumatra and has a resource of 5.3 million oz of gold and 54.8 million oz of silver. The project area covers over 2,500 sq km of highly prospective terrain, Agincourt said.

"Martabe is best suited to a company like Agincourt, who will develop the project as soon as possible, in the best interests of both the government of Indonesia and its people," said Bob Gallagher, Newmont's Vice President Indonesian and Australian Operations.

Agincourt said it had formed a joint venture with an Indonesian consortium led by the Dharmawangsa Group. The Indonesian partners have a commercial option to acquire up to 30% of Martabe by contributing to all acquisition and development costs.

Of the purchase price of $80.25 million, around A$50 million is to be paid to Newmont as shares in Agincourt. The transaction will make Newmont Agincourt's largest shareholder with about 20%.