TORONTO, ONTARIO -- (Marketwire) -- 06/01/12 -- ABERDEEN INTERNATIONAL INC. ("Aberdeen", or the "Company") (TSX:AAB) is pleased to announce it has closed its previously announced sale of its 1% net smelter return royalty on gold produced from certain mineral concessions comprising Village Main Reef Limited's Buffelsfontein Mine and First Uranium Corporation's Mine Waste Solutions tailings recovery project located in South Africa (the "Royalty") to Premier Royalty Corporation ("Premier Royalty"), a private Ontario company, wholly-owned by Premier Gold Mines Limited (TSX:PG)("Premier").
Pursuant to the terms of the royalty purchase agreement entered into among the Company, Premier Royalty and Premier on April 24, 2012 (the "Agreement"), Premier has made to Aberdeen a cash payment in the amount of $11,500,000 and issued a convertible debenture payable to Aberdeen in the amount of $9,400,000 (the "Convertible Debenture"). The unpaid amounts owing under the Convertible Debenture shall accrue interest at a rate of 8% per annum and upon Premier Royalty completing a public offering, or any other comparable going public transaction (a "Going Public Transaction"), the Convertible Debenture shall automatically convert into that number of common shares of Premier Royalty equal to the principal amount and accrued interest divided by the amount equal to the offering price or deemed price in connection with the Going Public Transaction less a 10% discount.
In the event that a Going Public Transaction is not completed on or before May 31, 2013 the principal amount and accrued interest under the Convertible Debenture shall be repaid by Premier Royalty in cash to Aberdeen in full, or if Premier Royalty elects, and subject to the approval of Premier, Premier Gold shall satisfy the Convertible Debenture on Premier Royalty's behalf by issuing that number of common shares of Premier Gold equal to the principal amount and accrued interest divided by the volume weighted average price of the common shares of Premier Gold for the five trading days immediately prior to the May 31, 2013.
Further, in the event Premier Royalty completes a Going Public Transaction, Premier Royalty shall issue to Aberdeen that number of warrants of Premier Royalty equal to 0.5 multiplied by the number of common shares of Premier Royalty issued under the Convertible Debenture (each whole warrant, a "Warrant"). Each Warrant shall entitle Aberdeen to acquire one common share of Premier Royalty at a price representing a 25% premium to the price per Premier Royalty common share issued in connection with a Going Public Transaction for a period of two years from the closing date of the Going Public Transaction.
George Faught, the Chief Executive Officer of Aberdeen, commented, "We are pleased to have completed the sale of our royalties, which represents the realization of approximately $0.24 per share. It is worth highlighting that we have received a total return of approximately $49 million on our original US$10 million royalty loan investment. We intend to use the proceeds from the sale to enhance our actively managed investment portfolio to maximize shareholder value."
David Stein, the President and Chief Operating Officer of the Company, commented, "This strategic transaction also gives us a large stake in Premier Royalty, an exciting new royalty company with a growing gold royalty portfolio. We are seeing many interesting investment opportunities and this cash injection will allow us to pursue our core business and take advantage of this weak market."
About Aberdeen International Inc:
Aberdeen is a publicly traded global investment and merchant banking company focused on small cap companies in the resource sector. Aberdeen will seek to acquire significant equity participation in pre-IPO and/or early stage public resource companies with undeveloped or undervalued high-quality resources. Aberdeen will focus on companies that: (i) are in need of managerial, technical and financial resources to realize their full potential; (ii) are undervalued in foreign capital markets; and/or (iii) operate in jurisdictions with moderate local political risk. Aberdeen will seek to provide value-added managerial and board advisory services to companies. The Corporation's intention will be to optimize the return on its investment over an 18 to 24 month investment time frame.
For additional information, please visit our website at www.aberdeeninternational.ca and follow us on Twitter: AberdeenAAB.
Except for statements of historical fact contained herein, the information in this press release constitutes "forward-looking information" within the meaning of Canadian securities law. Such forward-looking information may be identified by words such as "plans", "proposes", "estimates", "intends", "expects", "believes", "may", "will" and include without limitation, statements regarding the impact of the sale of the royalty; past success as an indicator of future success; net asset value of the Company; the potential of investee companies and the appreciation of their share price; the future intentions of the Company with regard to its investments; the Company's plan of business operations; and anticipated returns. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from such statements. Factors that could cause actual results to differ materially include, among others, metal prices, competition, financing risks, acquisition risks, risks inherent in the mining industry, and regulatory risks. Most of these factors are outside the control of the Company. Investors are cautioned not to put undue reliance on forward-looking information. Except as otherwise required by applicable securities statutes or regulation, the Company expressly disclaims any intent or obligation to update publicly forward-looking information, whether as a result of new information, future events or otherwise.
Manager, Investor Relations
President and Chief Operating Officer