VANCOUVER (Yosefardi) – Southern Arc Minerals has finalized an agreement for the sale of its interest in the Taliwang project.
Pursuant to the terms of the agreement, Southern Arc’s wholly-owned subsidiary Indotan Sumbawa Pte. Ltd., which holds a 90% share in the Indonesian company that owns the Taliwang project (remaining 10% held by the West Sumbawa Regency Government), will be sold to a prominent Indonesian businessman (Purchaser) in consideration for the payment of US$1,600,000 and the granting of a 5% net smelter royalty to Southern Arc.
The Purchaser has the option to buy back 3% of the net smelter royalty by paying Southern Arc US$3,000,000. The Purchaser has made two payments to Southern Arc totaling US$400,000 and will pay Southern Arc an additional US$1,200,000 in four consecutive weekly installments of US$300,000.
Since releasing a resource estimate for the West Lombok project in July 2013, Southern Arc has maintained low-level activities at West Lombok while continuing to advance discussions with a number of companies for a potential farm-in, partnership or outright sale of the property.
While Southern Arc believes the West Lombok project holds great potential, the Company has determined that it can more effectively build shareholder value by identifying a funding partner for West Lombok and redirecting the Company’s treasury to high-quality projects in stable jurisdictions.
Southern Arc remains confident that it will find a suitable arrangement, and is working diligently to conclude a transaction that will bring value to the Company.
The Company wrote-off an additional $454,339 (2012: $4,541,049) of exploration expenditures incurred on the West Lombok and Taliwang properties during the three months ended December 31, 2013.