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Monday, 24 December 2012
Southern Arc Minerals to sell Taliwang to Coke Resources in cash-and-stock deal
Southern Arc Minerals (CVE:SA) (OTCQX: SOACF) says it has agreed to sell its Taliwang project to Coke Resources in a cash and share deal.
The company's 90 per cent interest in the project will be sold to Coke for US$500,000 and 15 million Coke shares.
The remaining 10 per cent stake in the Indonesian project is held by the West Sumbawa government.
Earlier this month, Southern Arc's board announced the conditional acceptance of an offer for the Taliwang project, when it concluded its strategic review of its properties.
"This arrangement with Coke Resources meets our objectives of increasing the company's treasury and allowing Southern Arc to focus its time and resources on its priority projects," said chairman and CEO, John Proust.
"Southern Arc's investment in Coke Resources brings new opportunities to the company," he added. "Through Coke Resources we have exposure to two promising projects. We look forward to seeing progress at both the Taliwang and Cristian projects, yet have maintained financial flexibility for Southern Arc's shareholders with a liquid, public-company investment."
Coke Resources is an Australian-based exploration company focused on opportunities in Indonesia's mining sector. Its other project aside from Taliwang, the PT Cristian Eka Pratama, or Cristian, project is a long-life thermal coal property located 15km from the Mahakam River in East Kalimantan on Borneo Island, Indonesia.
The deal is dependent on Coke completing its initial public offering on the Australian Stock Exchange. The company is planning to list up to 21 million shares at 20 Australian cents each.
Southern Arc will retain upside potential with its stake in Coke Resources, owning roughly 15 million shares - equating to an 8 per cent interest.
Last week, the junior explorer concluded its strategic review, and finally announced the start of drilling at its West Lombok property in Indonesia.
The company's main West Lombok project covers a 13 by 7 km structural corridor of mineralization hosting porphyry copper-gold and epithermal gold deposits. The two main epithermal prospects on the property, Pelangan and Mencanggah, cover broad areas of 4 by 5 km and 6.5 by 4.5 km, respectively.
In November, the junior explorer received the required forestry permit, known as a Pinjam Pakai permit, to resume full scale exploration at the asset.