Nusantara Resources Limited (Nusantara) has entered into a non-binding term sheet with strategic partner, PT Indika Energy Tbk (Indika Energy) providing a clear pathway to financing the Awak Mas Gold Project (Project).

Indika Energy to invest up to USD 40 million into Nusantara's whollyowned subsidiary PT Masmindo DWI Area (Project Company), in two stages and subject to conditions, to secure up to 40% interest in the Project Company: an initial tranche of USD 15 million for 25% ownership is to be paid into the Project Company; a further USD 25 million can be invested to acquire an additional 15% ownership subject to conditions including a Final Investment Decision; Indika Energy's subsidiary, PT Petrosea Tbk (Petrosea) to be awarded Front End Engineering and Design contract (FEED) on terms to be agreed. Project Company to negotiate an Engineering, Procurement and Construction (EPC) contract. Subject to relevant approvals and conditions, Petrosea to provide deferred payment terms of: up to USD 10 million to be incorporated in the FEED contract; up to USD 30 million to be incorporated in an EPC contract; Nusantara commits to investing USD 10 million in stages into the Project Company to fund cancellation of a third-party royalty, exploration and other activities, and issue 10 million share options each to Indika Energy and Petrosea; Nusantara and Indika Energy will collaborate on seeking third party and mezzanine finance, with a number of international banks engaged.

The term sheet is non-binding, and subject to conditions, including Nusantara shareholder approval and formalisation of definitive agreements. There is no certainty that formal terms for the proposed transaction will be agreed or agreed on the same terms, or a transaction completed.

'The Board of Nusantara in conjunction with our partner Indika Energy are excited to announce this transformational milestone and clearly demonstrate to all stakeholders the value of the Project and a clear pathway for funding.' commented Nusantara's Executive Chairman Greg Foulis. 'We are confident that, with the support of major shareholders, Nusantara can complete the Indika Energy and Petrosea Agreements in early 2020 and significantly ramp up its pre-build activities.'

Awak Mas Development Strategy

Nusantara's Awak Mas Gold Project is development ready. The Definitive Feasibility Study (DFS)1 completed in late 2018 confirms a robust, long-life and low-cost gold project. The DFS supports an initial 11-year project producing 100,000 oz gold per year, which will deliver strong margins. Key attributes are: The Project is located 45km by road from Belopa on the east coast of South Sulawesi Province, Indonesia

Contact:

Tel: +61 3 9614 8008

Email: info@lsg.com.au

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