Vista Gold to convert interest in Awak Mas gold project into royalty

By Romel S. Gurky

Denver-based firm Vista Gold Corp. announced Wednesday that it has signed a binding share purchase agreement to convert its interest in the Awak Mas gold project in Sulawesi, into a net smelter return royalty on the project.

The Awak Mas Project is indirectly held through a wholly owned subsidiary of the company, Vista Gold (Barbados) Corp. and is the subject of a 2009 joint venture agreement, as amended and assigned, and a 2011 additional option agreement, as amended and assigned (together called Existing Agreements), each between Vista Barbados and Awak Mas Holdings Pty Ltd. (a wholly owned subsidiary of One Asia Resources Corp).

The Existing Agreements provide Awak Mas Holdings as the purchaser with the option to acquire an 80 percent interest in the Awak Mas Project by completing certain activities.

The Purchase Agreement announced Wednesday provides for the termination of the Existing Agreements and the acquisition by the purchaser of 100 percent of the outstanding shares of Vista Barbados, the entity that indirectly holds the Awak Mas Project.

In exchange, (a) the purchaser will forego certain cash payments due to have been paid by the company had the purchaser completed the earn-in of its interest in the project, and (b) the company will receive the royalty (2% on the first 1.25 million ounces of gold production and 2.5% on the next 1.25 million ounces of gold production from the Awak Mas Project).

The completion of the transaction is subject to a number of conditions, including receipt of any required regulatory approvals, and the transaction is expected to close on or about December 16, 2013.

Editing by Reiner Simanjuntak