Shareholders of Village Main Reef have voted in favour of Village’s proposed sale of its interest in the Consolidated Murchison antimony mine to Stibium Mining and, in a separate vote, endorsed the 1 for 20 consolidation of Village’s shares.
Village is selling its interests in Cons Murch to Stibium for US$15 million – with payment effected in two tranches of US$8.4 million and US$6.6 million. The first of these phases follows on the regulatory and shareholder approvals, both of which have now been granted, and payment is expected towards the end of October. The second payment will occur after Ministerial written approval of the transaction in terms of Section 11 of the Mineral and Petroleum Resources Development Act (MPRDA).
Receipts from the sale will be used to strengthen Village’s balance sheet, thereby contributing to the group’s transition towards being a resources investment company.
In a separate vote, Village’s shareholders approved the 1 for 20 consolidation of the company’s share capital and the concomitant conversion of the consolidated shares into shares of no par value. In line with the current Companies Act, the new consolidated shares will have no par value. However, the existing par value will be converted to a non-distributable reserve – an accounting move that will have no effect whatsoever on the share’s value.
The consolidation applies to the 5 billion authorised shares of R0.125 each and the issued 1.04 billion ordinary shares each of the same par value. Following consolidation, Village will have 250 million authorised shares and 50.2 million issued shares.
Consolidation is expected to result in the narrowing of the spread between the bid-to-buy price of the shares and their offer-to-sell price, creating more stability and less volatility in the price. This, in its turn, is expected to add to the confidence of existing shareholders and enhance Village’s attractions to prospective investors.