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Aberdeen Provides Update on African Thunder Platinum Investment
By: Marketwired .
Sep. 13, 2017 08:00 PM
TORONTO, ONTARIO -- (Marketwired) -- 09/13/17 -- Aberdeen International Inc. ("Aberdeen" or the "Company") (TSX:AAB) announces that African Thunder Platinum Limited ("ATP"), of which Aberdeen is a significant shareholder, has agreed to sell all of the issued and outstanding shares (the "SHM Shares") of Smokey Hills Platinum Mining (Mauritius) ("Smokey Hills"), which owns the Smokey Hills Platinum Project in South Africa, to the Sail Group of Companies (the "Sail Group"). The Sail Group is an international commodity trading company with a focus on chrome. The Sail Group has recently acquired two other chrome projects in the Bushveld complex that would complement the Smokey Hills assets.
In December 2014, Aberdeen acquired a 42.25% interest in ATP. Through this investment, Aberdeen sought exposure to the expected rise in platinum prices and looked to use its South African operating experience to lead a turnaround of the Smokey Hills Platinum Project. ATP recruited South African operators and engaged the local community to re-commence production operations at the Smokey Hills project. Unfortunately, platinum prices did not pan out as projected and ATP encountered delays in consolidating neighbouring mineral concessions and permits.
In April 2016, ATP decided to temporarily suspend mining operations at the Smokey Hills mine. Subsequently, ATP consulted with its work force and ultimately concluded the best way to optimize the long term value of the mine and processing facility was to suspend operations and focus on the planning and permitting that would be required once commodity prices increased.
Aberdeen and the other ATP shareholders have also conducted a review of strategic opportunities and a financial restructuring of ATP. Since the Smokey Hills project was placed on care and maintenance, ATP has been largely financed through loans from Pala Investments, one of the ATP shareholders. To preserve its cash holdings, Aberdeen elected not to participate in these ATP loans. The shareholders of ATP have agreed to convert certain ATP loans made by Aberdeen and Pala. As a result of the conversion of such loans, Aberdeen will decrease its percentage ownership in ATP to approximately 18.2% of the issued and outstanding shares of ATP.
As consideration for the SHM Shares, ATP will receive USD$24 million in shares of a newly-incorporated company ("Holdco") that will hold all of the Sail Group corporate entities. The Sail Group will cause Holdco shares to be listed for trading on a stock exchange.
ATP has the right to cause Holdco to purchase from ATP all of the Holdco Shares for USD $22,000,000 during the Option Period (as defined below). Holdco has the right to cause ATP to sell the Holdco Shares to Holdco for USD$26,000,000 during the Option Period. Upon completion of the Transaction, Aberdeen expects ATP to distribute the Holdco shares to the ATP shareholders on a pro rata basis. The Option Period is a period of three calendar months commencing on the earlier of:
-- 18 completed calendar months from the day of the last of the following to occur: -- the renewal application in respect of the mining right for the Smokey Hills Platinum Project is filed and accepted by the Minister of Mineral Resources pursuant to section 24 of the Mineral and Petroleum Resources Development Act (South Africa) ("MPRDA"); -- the issuance of a new integrated water license for the Smokey Hills Platinum Project, for the Combined Group, by the Department of Water and Sanitation of the Republic of South Africa; and -- the issuance of the environmental authorization to the Smokey Hills Platinum Project, for the Combined Group, by the Department of Environmental Affairs; or -- Six completed calendar months from the date on which Holdco completes the construction of a chrome processing plant at the Smokey Hills Platinum Project.
In addition to obtaining a listing of the Holdco Shares, closing of the Transaction is subject to several other regulatory conditions.
ABOUT THE SAIL GROUP
The Sail Group is an international commodity trading company with a special focus on chrome. It invented the Chrome market's benchmark product, Run Of Mine "ROM". Sail recently concluded the acquisition of two chrome assets in the Eastern and Western Limb of the Bushveld Igneous Complex respectively.
ABOUT ABERDEEN INTERNATIONAL
Aberdeen International is a global resource investment company and merchant bank focused on small capitalization companies in the mining and metals sector.
This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, without limitation, statements regarding the Sail Group, ATP, the Transaction and ATP's and the Sail Group's ability to close the Transaction. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including risks inherent in the mining industry and risks described in the public disclosure of the Company which is available under the profile of the Company on SEDAR at www.sedar.com and on the Company's website at www.aberdeeninternational.com. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
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