East Asia Minerals has entered into a definitive agreement with PT Arsinali which provides for the sale of 50% of the company’s interests in Sangihe Gold Corporation, which holds a 70% interest in PT Tamang Mas Sangihe, an Indonesian company holding the company's interests in the Sangihe Gold Project in North Sulawesi.
PT Arsinali is a high profile Indonesian-based company involved in numerous investment projects throughout Indonesia.
PT Arsinali will pay to East Asia a cash payment of US$1.4 million within five days upon receipt of TSX Venture Exchange approval. It will also provide East Asia with a 1.5% net smelter returns royalty on the interests that it acquires.
PT Arsinali has agreed to spend more than US$1.9 million over a 12 month period directly on the Sangihe project in order to bring the project to pre-production stage, including the completion and approval by governmental authorities of a feasibility study, environmental study and pre-construction permitting.
PT Arsinali will immediately move its team of experienced mining engineers and geologists to the project site on Sangihe Island to start working upon the closing of the agreement.
At the end of the 12 month period, if PT Arsinali has completed all of the requirements of the agreement it will have a 30 day option to purchase the remaining 50% interest in Sangihe Gold Corporation at fair market value.
Through acquisition of a 50% equity interest in the company’s interests in Sangihe, East Asia will be able to continue to develop the project. East Asia obtained an NI 43-101 technical report on the Sangihe project in 2010.