Southern Arc closes sale of Taliwang gold project

By Romel S. Gurky

Canadian junior miner firm Southern Arc Minerals announced Friday that the company has amended the sale agreement and closed the sale of its interest in the Taliwang gold, copper and silver project in West Sumbawa, West Nusa Tenggara Province.

Pursuant to the terms of the agreement, Southern Arc's wholly-owned subsidiary Indotan Sumbawa Pte. Ltd. has sold its 90 percent share in the Indonesian company that owns the Taliwang project (the remaining 10% is held by the West Sumbawa Regency Government) to a prominent Indonesian businessman, the company said in a statement.

It added that the purchaser has paid US$1 million and granted a 5 percent net smelter royalty (NSR) to Southern Arc. The purchaser has the option to buy back 3 percent of the NSR by paying Southern Arc $3 million.

Southern Arc said the purchaser is required to make additional payments to the company to fulfill the agreed purchase price. The purchaser will pay Southern Arc 40 percent of gross revenue generated from the Taliwang project, after payment of the Southern Arc NSR, until the aggregate amount of such payments equals $750,000. Alternatively, the purchaser has the option of making a one-time payment of $600,000 if the payment is made before January 12, 2015.

"We are pleased to have completed the Taliwang sale in today's challenging market conditions, particularly as the net smelter royalty and buy back terms still allow Southern Arc to participate in the development and future success of the Taliwang project," said John Proust, Chairman & Chief Executive Officer of Southern Arc.

The company first signed the sale agreement in March of this year.

Editing by Reiner Simanjuntak