Vista Gold Corp. (TSX & NYSE MKT: VGZ) ("Vista" or the "Company") today announced that it has signed a binding share purchase agreement (the "Purchase Agreement") to convert its interest in the Awak Mas gold project in Sulawesi, Indonesia (the "Awak Mas Project") into a net smelter return royalty ("Royalty") on the project.
The Awak Mas Project is indirectly held through a wholly owned subsidiary of the Company, Vista Gold (Barbados) Corp. ("Vista Barbados") 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, the "Existing Agreements") each between Vista Barbados and Awak Mas Holdings Pty Ltd. (the "Purchaser") (a wholly owned subsidiary of One Asia Resources Corp. ("One Asia")). The Existing Agreements provide the Purchaser with the option to acquire an 80% interest in the Awak Mas Project by completing certain activities. Additional information about the Existing Agreements is available in the Company's annual report on Form 10-K for the year ended December 31, 2012.
The Purchase Agreement announced today provides for the termination of the Existing Agreements and the acquisition by the Purchaser of 100% 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.
Frederick H. Earnest, President and Chief Executive Officer, said "We are pleased that One Asia has demonstrated an ability to advance the Awak Mas Project, and to operate effectively in Indonesia. With One Asia poised to perfect their 80% earn-in at the Awak Mas Project, Vista would have been required to reimburse One Asia for certain expenses incurred over the course of the last four years and begin to fund 20% of the ongoing project expenditures.
As a result of this new agreement with the Purchaser, and subject to the successful development of the Awak Mas Project, Vista could enjoy cash income with exposure to gold prices and project reserve growth, if any, without committing any future capital. This is consistent with our strategic objectives, which include reducing our operating risk, improving our balance sheet and locking in value for our shareholders."
About Vista Gold Corp.
Vista's principal assets include its flagship Mt. Todd gold project in Northern Territory, Australia, and a 24.9% holding in Midas Gold Corp. In addition to non-core projects in Mexico, Indonesia and California, Vista holds a royalty interest in a project in Bolivia.
