Nusantara, an indirect shareholder of PT Masmindo, issued to Vista 666,667 ordinary shares in the capital of Nusantara and paid $100,000 to Vista
Image: Vista Gold has entered into an amendment to the net smelter return ") royalty agreement between Vista and PT Masmindo DWI Area. Photo: courtesy of Steve Bidmead/Pixabay.
Vista Gold Corp. (NYSE American and TSX: VGZ) (“Vista” or the “Company”) today announced that the Company has entered into an amendment to the net smelter return (“NSR”) royalty agreement between Vista and PT Masmindo DWI Area (“PT Masmindo”) dated December 11, 2013 (the “Amending Agreement), pursuant to which Vista granted PT Masmindo the right to cancel the NSR royalty held by Vista on the Awak Mas gold project in Indonesia (“Awak Mas”).
Pursuant to the terms of the Amending Agreement:
Nusantara Resources Limited (“Nusantara”), an indirect shareholder of PT Masmindo, issued to Vista 666,667 ordinary shares in the capital of Nusantara and paid $100,000 to Vista;
PT Masmindo has the right to cancel 50% of the royalty (which represents a 1.0% NSR royalty on the first 1,250,000 ounces of gold and 1.25% NSR royalty on the next 1,250,000 ounces of gold produced from Awak Mas) by giving notice and paying $2.4 million to Vista prior to April 30, 2020; and
If PT Masmindo executes its right to cancel 50% of the royalty, as described above, it then has the right to cancel the remaining 50% of the royalty (representing the remaining 1.0% NSR royalty on the first 1,250,000 ounces of gold and 1.25% NSR royalty on the next 1,250,000 ounces of gold produced from Awak Mas) by giving notice and paying $2.5 million to Vista prior to April 30, 2021.
Frederick H. Earnest, Vista’s President and CEO, commented, “We are pleased with Nusantara’s efforts to advance the Awak Mas project. As reported by Nusantara in their October 4, 2018 Australian Securities Exchange announcement, the Awak Mas project presently contemplates production of nearly 1.1 million ounces over the 11.25-year life of the project. A normal development cycle suggests that commencement of production is likely to be at least three years in the future. This Amending Agreement provides Vista with an excellent opportunity to monetize its NSR royalty on Awak Mas in the near term and still maintain longer term exposure to potential upside through the Nusantara ordinary shares.”
Awak Mas is not a material property to Vista. References to Awak Mas production and life of the project are based on Nusantara’s foreign non-National Instrument 43-101 compliant report.
Source: Company Press Release