Aberdeen International Inc.

Aberdeen International Inc.

July 31, 2006 08:00 ET

Aberdeen Receives Increased Second Quarter Royalty Payment from Simmers

TORONTO, ONTARIO--(CCNMatthews - July 31, 2006) - Aberdeen International Inc. ("Aberdeen" or the "Company") (TSX VENTURE:AAB) is pleased to report that the Company has received payment under the US$10 million royalty loan facility with Simmer & Jack Mines Limited ("Simmers") based on the second quarter 2006 gold production from Simmers' Buffelsfontein mine ("Buffels").

Simmers produced nearly 34,000 ounces of gold from its South African Buffels mine in the second quarter of 2006. Based on the average gold price in the second quarter (US$627/ounce), the royalty rate was 3.45% of gold produced by Simmers, providing Aberdeen with a gold royalty equivalent of US$796,600 for the second quarter. This compares favourably to the first quarter royalty payment of US$606,600. The graduated nature of the royalty loan facility has responded favourably to the rising gold price increasing from a rate of 2.75% in the first quarter to 3.45% in the second quarter and will reach 4.75% when the gold price is US$750 per ounce or higher.

Simmers reports that the reactivation of the Buffels mine to an acceptable and safe level has been a major challenge but progress is being made. Key to the ramp-up in gold production is an incremental increase in mine development and opening up of high grade pillars to create flexibility in the mining operations to provide the optimum ore grade mix. Simmers is estimating an annualized production rate of approximately 230,000 ounces gold from the Buffels mine. However, this target has been delayed somewhat by changes to the mine plan. Simmers has also reported that the metallurgical plant treatment capacity will be increased from the current 125,000 tpm to 170,000 tpm by January 2007 which will help facilitate achieving the estimated gold production levels.

Simmers has recently finalized the resource and reserve statement for the Buffels mine which has resulted in a doubling of the mine life to 20 years. Based on a stronger gold price and longer mine life, Simmers has determined the fair value of the Aberdeen royalty loan to be US$21 million (R129 million), which equates to approximately C$0.85 per Aberdeen share.

Aberdeen offers an unique investment opportunity in the gold sector with its secured, convertible royalty structure that provides reduced exposure to operational risk and the local operating currency, while providing direct leverage and increased participation to a rising gold price with the sliding scale royalty and further upside potential with a conversion right into the equity of the underlying gold producer.

Aberdeen International Inc. is a Canadian based company listed on the TSX Venture Exchange under the symbol AAB.


Contact Information

  • Aberdeen International Inc.
    George D. Faught
    President & C.E.O.
    (416) 861-5887
    Aberdeen International Inc.
    Doug Bache
    Executive Vice President
    (416) 861-5884
    (416) 861-8165 (FAX)