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VIL - Village Main Reef Limited - Village reaches settlement with Aberdeen

Release Date: 10/10/2011 16:49
Code(s): VIL
Wrap Text

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 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or 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, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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