| Fri 22 Jul 2011, 8:37 | | VIL - Village Main Reef Limited - Disposal of 47 065 916 common shares in the |
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VIL
VIL
VIL - Village Main Reef Limited - Disposal of 47 065 916 common shares in the
share capital of First Uranium Corporation
Village Main Reef Limited
(formerly known as Village Main Reef Gold Mining Company (1934) Limited)
(Registration number 1934/0057034/06)
Share Code: VIL
ISIN: ZAE000154761
("Village")
DISPOSAL OF 47 065 916 COMMON SHARES IN THE SHARE CAPITAL OF FIRST URANIUM
CORPORATION
INTRODUCTION
Shareholders are advised that an agreement has been entered into between Village
and AngloGold Ashanti Limited (Registration Number 1944/017354/06)("AngloGold")
in terms of which Village has sold and ceded to Angolgold 47 065 916 common
shares (the "Sale Shares") in the issued share capital of First Uranium
Corporation (Registration Number C0777384) ("FIU") comprising 19.786% of the
issued and outstanding share capital of FIU as at the date of signature of the
agreement (the "Signature Date") for a purchase price of R4,36 per Sale Share or
CAD0.6 (60 Canadian cents) per Sale Share, based upon an agreed CAD to Rand
exchange rate of R7.2615 to CAD1 (one Canadian Dollar), amounting to in
aggregate a purchase price of (R205 061 500 (the "Purchase Price")("the
Transaction"). The Transaction will take place 5 business days after the
Signature Date (the "Settlement Date").
Ownership of and risk in, and benefit attaching to the Sale Shares will, against
payment of the Purchase Price pass to AngloGold on the Settlement Date.
BACKGROUND INFORMATION
Established in December 2006, FIU has sought to become a significant, low cost
producer of gold and uranium through the expansion of its underground
developments to feed the new gold and uranium plants at the Ezulwini Mine and
through the expansion of the plant capacity of Mine Waste Solutions, a tailings
treatment facility which neighbours the Buffelsfontein Gold Mine.
Village acquired a 25.5% equity interest in FIU and a holding of 392 874 Rand
denominated secured convertible notes having a face value of R1 000 per note
issued by a wholly owned subsidiary of FIU (the "FIU Notes"), as part of the
recently concluded transaction with Simmer & Jack Mines Limited (Registration
Number 1924/007778/06) ("Simmers").
RATIONALE FOR THE TRANSACTION
As indicated in Village`s operational update released over the Securities
Exchange News Service of the JSE Limited ("SENS") on 29 June 2011, a board
committee had been established to evaluate alternatives to realising value from
Village`s investment in FIU or to oversee the process of distributing Village`s
investment in FIU to Village shareholders. The Transaction is a part realisation
of value in the FIU investment in accordance with that stated strategy.
The proceeds of the Purchase Price will be used to pay down current debt of
Village.
PURCHASE PRICE AND SETTLEMENT
Each party shall procure by performing to and instructing its CSDP that
settlement of the Sale Shares and the Purchase Price shall take place on the
Settlement Date through the facilities of STRATE Limited.
WARRANTIES AND UNDERTAKINGS
- Village has undertaken to and in favour of AngloGold for the period
expiring on 30 November 2011, in respect of its remaining 13 556 737 common
shares in FIU (being the FIU shares beneficially owned by Village following
the sale of the Sale Shares (the "Remaining FIU Shares"))and 31 October
2011 in respect of its FIU Notes (the "Lock-Up Period") to lock-up the
Remaining FIU Shares and FIU Notes.
- Village has also granted to AngloGold rights of first refusal to acquire
the Remaining FIU Shares and FIU Notes, which right of first refusal is
effective from the date of expiry of the Lock-Up Period and indefinitely
thereafter.
- Village has undertaken not to dispose of its remaining FIU shares and FIU
Notes until after the sixtieth day after the Settlement Date.
- Village has given warranties as are normal in transactions of this nature
regarding the Sale Shares.
CLASSIFICATION OF TRANSACTION
The Transaction is classified as a Category 2 transaction in terms of the
Listings Requirements of the JSE.
FINANCIAL EFFECTS
The pro forma financial information set out below has been prepared for
illustrative purposes only, to provide information on how the Transaction may
have impacted on the historical results and financial position of Village.
The earnings and headline earnings per share figures illustrate the possible
financial effects if the Transaction had taken place on 1 June 2010, whilst the
net asset and net tangible asset per share figures have been based on the
assumption that the Transaction had taken place on 31 December 2010.
Because of its nature, the pro forma financial information may not give a fair
reflection of Village`s financial position after the Transaction, or the effect
of the Transaction on Village`s future earnings.
The calculation of the pro forma financial information is the responsibility of
the directors of Village.
Before After the Percentage After the Percentage
acquisition change Transaction change
of the sale
assets and
liabilities
from
Simmers1,2
Earnings per (2.78) (59.36)
Village share
(cents)
(2 035)% (36.75) 38%
Headline (2.78) (59.39)
earnings per
Village share
(cents)
(2 036)% (36.78) 38%
Net asset value 39.06 337.25 349.36
per Village
share (cents)
763% 3.6%
Net tangible 17.70 317.30 322.79
asset value per
Village share
(cents)
1 693% 1.7%
Notes and assumptions:
1 The "Before" column is based on the unaudited condensed consolidated
statement of financial position of Village as at 31 December 2010 and
unaudited condensed consolidated statement of comprehensive income of
Village for the six months ended 31 December 2010 released on SENS on 29
March 2011. These results did not include the recent transaction concluded
with Simmers in terms of which Village acquired certain assets and
liabilities from Simmers ("the sale assets and liabilities"), the details
of which are set out in the circular to Village shareholders issued on 2
March 2011.
2 The "After the acquisition of the sale assets and liabilities from Simmers"
column presents the unaudited pro forma financial position after the
acquisition of the sale assets and liabilities.
3 The "After the Transaction" column presents the unaudited pro forma
financial position after the implementation of the disposal of the Sale
Shares.
4 The cash proceeds received have been utilised to reduce finance costs at
Village`s cost of borrowings of 13,5% per annum.
22 July 2011
Sponsor
Java Capital
Attorneys
Cliffe Dekker Hofmeyr
Investor relations
Vestor
Date: 22/07/2011 08:37:01 Produced by the JSE SENS Department.
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implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
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