Fitch Affirms GEAR at 'B+'; Outlook Stable

RATING ACTION COMMENTARY Fitch Af rms GEAR at 'B+'; Outlook Stable Tue 12 May, 2020 - 10:15 AM ET Fitch Ratings - Singapore - 12 May 2020: Fitch Ratings has af rmed the Long- Term Issuer Default Rating (IDR) of Golden Energy and Resources Limited (GEAR) at 'B+'. The Outlook is Stable. The agency also af rmed GEAR's senior unsecured US dollar bond at 'B+' with a 'RR4' Recovery Rating. The af rmation re ects GEAR's more diversi ed business pro le with acquisition of majority stake in Stanmore Coal Limited - an Australia-based metallurgical coal-mining company. The acquisition is expected to support improvement in the group's credit pro le over the medium term, although contribution to GEAR's cash ow is likely to remain minimal over the next two years. Fitch has lowered its coal price and volume assumptions for GEAR's key subsidiary, Golden Energy Mines Tbk (GEMS, B+/Stable). We expect GEMS's coal volumes to fall by 10% to 27.5 million tonnes (mt) in 2020, following a coronavirus-related fall in energy demand. We expect GEMS's volume to rise gradually, to 32.5mt in 2021 and further increase by about 4mt per annum over the following two years. Lower selling prices in 2020 follows the revision to our commodity price assumptions (see "Fitch Ratings Cuts Some Metals, Mining Price Assumptions on Coronavirus Hit", dated 6 April 2020, available at www. tchratings.com/site/pr/10117162 ) . GEAR's rating is based on the credit metrics with proportionate consolidation of its 67%-owned GEMS, as we assess GEAR's linkage with GEMS as moderate and

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