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According to a statement from Aberdeen on February 4, this triggers immediate repayment of the loan principal and a net smelter royalty payment of 1% of all gold produced at the Buffelsfontein gold mine and adjoining properties for the life of the mine.
Simmers spokeswoman Gail Strauss said Simmers considered that the vote against conversion into equity meant the loan and existing servicing costs translated into a 1% net smelter royalty payable over the life of the mine.
"We will demand payment of the $10m in principal from Simmers and First Uranium, and should they decline to pay we will begin litigation on the matter," Aberdeen vice-president Scott Moore said yesterday .
Aberdeen and Simmers also fell out last year over whether Aberdeen had the right of first refusal when Simmers placed shares in May 2007. The high court dismissed the application, with costs. Aberdeen has applied for leave to appeal on the basis that the court interpreted the right of first refusal to apply only to debt financing .
Aberdeen said the value of the loan and royalty over the life of the mine was $53,6m. But Simmers' latest annual report gives the liability as R147,5m.
Strauss said Simmers' valuation was based on the principal, interest and royalty payable. It was difficult to explain how Aberdeen had reached its figure, without having looked at its detailed assumptions.
Imara SP Reid analyst Percy Takunda Chiweshe downrated Simmers this week to "hold" .
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