| Mon 10 Oct 2011, 16:49 | | VIL - Village Main Reef Limited - Village reaches settlement with Aberdeen |
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VIL
VIL
VIL - Village Main Reef Limited - Village reaches settlement with Aberdeen
International Inc, ("Aberdeen") in relation to the loan payable to Aberdeen
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")
Village reaches settlement with Aberdeen International Inc, ("Aberdeen") in
relation to the loan payable to Aberdeen
As previously reported to the shareholders of each of Village and Simmer and
Jack, Mines Limited ("Simmers") in the circulars distributed to them on 2 March
2011, Simmers entered into an agreement with Aberdeen (the "Aberdeen Loan
Agreement") during the latter part of 2005, whereby Aberdeen provided a loan
facility of USD10 million to enable Simmers to acquire Buffelsfontein Gold Mines
Limited ("BGM"). On 18 October 2008, Aberdeen delivered a notice to convert the
amount outstanding under the Aberdeen Loan Agreement into Simmers shares. This
conversion, which required the approval of Simmers shareholders, was rejected by
an 87.1% majority of the voteable shares present at the meeting of Simmers
shareholders held on 16 February 2009.
Aberdeen maintained (which Simmers at the time contested) that pursuant to the
terms of the Aberdeen Loan Agreement it remained entitled to the repayment of
the loan amount of USD10 million and all interest payable on that loan amount,
in addition to a 1% Net Smelter Royalty payable on all gold produced during the
life of BGM (the "Aberdeen dispute"). As part of the acquisition of the majority
of the Simmers` assets by Village, Village assumed all liabilities that may
arise under the Aberdeen Loan Agreement.
The Aberdeen dispute was referred to arbitration and was due to be heard on 10
October 2011. The parties have however agreed to settle the Aberdeen dispute.
The parties to the Aberdeen dispute have agreed that Village will in full and
final settlement pay to Aberdeen an amount of USD9 million as follows:
- USD4 million in cash on or before Monday 10 October 2011; and
- the balance of USD5 million plus interest thereon at the rate of 10% per
annum from 10 October 2011 to date of payment, in five equal monthly
instalments in cash, the first of which shall be payable on 25 October
2011. The remaining four instalments will be payable on the twenty-fifth
day of each succeeding month; and
- the 1% Net Smelter Royalty to remain in effect.
Village will pay Aberdeen the amount due out of available cash reserves.
About Aberdeen
Aberdeen International is a global resource investment corporation and merchant
bank and is incorporated in terms of the laws of Ontario, Canada.
10 October 2011
Village CFO - Marius Saaiman
Msaaiman@villagemainreef.co.za
011 274 4603
082 458 3420
Vestor Media and Investor Relations
Louise Brugman
louise@vestor.co.za
011 787 3015
083 504 1186
Sponsor
Java Capital
Date: 10/10/2011 16:49:01 Produced by the JSE SENS Department.
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