July marked the time Intrepid's struggles in Indonesia began.
It was kicked out of its flagship Tujuh Bukit copper-gold project by its then-joint venture partner PT Indo Multi Niaga, which led to a reignited debate about risk in Indonesia. While Intrepid remains locked out of the project, the company has been upfront with developments.
We now know the mining exploration title which governs TB was transferred to PT Bumi Sukses Indo. In addition to the company's ownership issues, details of the company wrongly obtaining its rights to TB through alleged methods of intimidation have also surfaced.
Despite its troubles, Intrepid remains committed to regaining its rights to TB and is currently
undertaking preparations for international arbitration proceedings in Singapore to fight what the company believes is a breach of its alliance agreement by its JV partners.
At the time Intrepid learned it had been kicked off the TB site, chairman Colin Jackson acknowledged the event would force companies and the investment community to question the country as a mining destination.
"If this is happening to a company that has spent $US95 million and is compliant with all of its commitments that it has made, why would any other major mining company go to Indonesia?" Jackson said.
Independent analyst Troy Flannery, who has experience working in Indonesia, told MiningNewsPremium.net* that the plight of Intrepid would have a significant impact on companies with assets in Indonesia.
"It will make the hurdles higher," he said.
"In some instances, some funds and institutions will just have it [Indonesia] as black listed."
Intrepid's Indonesian story is not the only issue proving a cause for concern for investors and companies.
Last February, controversial Regulation 24 kicked in, leaving operators facing the prospect of relinquishing 51% of their operations to Indonesian-owned counterparts after ten years of production.
Owen Hegarty, vice-chairman of Hong-Kong listed and Australian-run company G-Resources, which operates the large Martabe gold-silver mine in Indonesia, told MNP that while the contract of work system for foreigners had worked well, the country eventually needed to move to more unanimous legislation.
"We were fully supportive of going to legislation as opposed to contract of work type system," Hegarty said.
While Regulation 24 doesn't directly impact G-Resources due to the fact it is grandfathered with about 30 years of 95% ownership, he admitted the legislation did not bode well for Indonesia's risk profile.
"Nothing frightens off investors more than mandatory requirements in respect of local ownership, especially when it comes to 51 per cent," he said.
"It doesn't matter if its five years, 10 or 15 … it's hard to raise money under those sorts of circumstances."
While the changes may have damaged the investment community's perception of Indonesia, Hegarty says Indonesia is still a lucrative destination in terms of its mining prospects.
"Indonesia's got some of the best copper-gold mines and prospects in the world right now," he said.
"The government by and large gets it in terms of the importance of the resources sector to economic development and growth."
Speaking of his personal experience in Indonesia, Hegarty admits it hasn't all been smooth sailing.
"It's never simple, never easy, but we've generally been able to do everything that we've wanted to do."
Sumatra Copper & Gold managing director Julian Ford echoed Hegarty's view.
"We see huge amount of opportunities [in Indonesia]," he told MNP.
But Ford, like Hegarty, knows that you have to be aware of Indonesia's drawbacks.
"Indonesia is an earthquake prone environment…if you try to build projects to fast and you don't have your foundations in place they're going to fall over," he said.
While Indonesia's perils, such as green tape and at times an anti-foreign investment climate, have caused issues for some Australian-listed and based companies in Indonesia, Sumatra Copper & Gold is one of the few achieving success in the country.
The company has outdone its peers it in terms of share price performance, with shares climbing from A14.5c at the end of August 2012 to a new high of 23.5c six months on.
Possible reasons for the company maintaining share price consistency comes from its progress being made at its key Tembang project in the Bengkulu district of central Sumatra.
Resources at the project total about 1 million ounces of gold and 12.8Moz of silver, with the mine tipped to produce 395,000oz of gold and 4.8Moz of silver over an eight-year mine life.
First production at the mine is slated to kick off in the first quarter of next year at 60,000oz, with output set to grow to 50,000oz by 2015.
While Ford is well aware of the company's successful rise over the last six months, he emphasised the importance the company places on political risk management as its key driver.
"If you look at most of the risks now in Indonesia they revolve around local issues and community support," he said.
"All our assets have very strong local support.
"As a team, our capabilities in terms of managing permits and political risk at the regency and the provincial level is unsurpassed in my view, it's a huge competitive advantage."
Ford said what made the company different to some of its peers with assets in Indonesia was its legal structure.
"We own all of our assets 100% and we used the opportunities that came about to do that," he said.
But perhaps more importantly is the key support of its major shareholder, Singapore-based fund Provident Capital Partners, which just provided the company with a comprehensive debt and equity funding package of roughly $A63 million.
Ford said Provident had invested more than $8 million in the company, and would commit to underwrite a large rights issue once it secures a forestry permit for Tembang- hopefully by the end of this month.
"If you look at all the other companies that have had loosely arranged joint ventures in Indonesia, things have come unstuck," he said.
"I think it's very difficult to operate in Indonesia without a major partner," he said.
While structure and partners were important, Ford said its core team of people were the backbone of any accomplishment it was making on the bourse.
Ford said it was important to not only think but act local.
"It's local Indonesians managing Indonesian assets," Ford said.
Adi Sjoekri, which founded Sumatra Copper & Gold in 2006, has more than 17 years corporate mining experience and was responsible for permitting Newmont's Batu Hijau operation in Indonesia.
Tembang marks Sjoekri's fourth focus project in the country.
Ford pointed out that there was a distinct difference between the Australian community's perception of Indonesia and how the country views its prospects.
"If you look at the press here it's all bad news stories [on Indonesia]," he said.
"You go into Indonesia and its different story, the place is booming.
"If you know what you're doing and you keep it small and manageable without being too ambitious you can grow."
Ford acknowledged that a lot of people involved in the mining industry put Indonesia in the too hard basket.
"You have to look beyond Intrepid at opportunities in Indonesia," he said.
"Slowly success stories like us will come through."
Despite the hardships that can be encountered working in Indonesia, Hegarty says they may just be overblown.
"People are getting the impression that it isn't fatal. Yes it is hard but we're still able to raise money and the prospectively is good, he said.
"Nobody has disappeared just yet."
First published in sister site MNP on Friday.