1 May 2012 07:00
Sierra Rutile agrees to cash pay PAYE, cancelling Government's minority interest
London, UK, 30 April 2012: Sierra Rutile Limited ("Sierra Rutile") is pleased to announce that it has entered into an agreement with the Government of Sierra Leone ("the Government") to pay, in cash, PAYE taxes that have historically been satisfied through the issuance of shares in Sierra Rutile's subsidiary Sierra Rutile Holdings Limited ("SRHL"). The Government's interest in SRHL, earned in accordance with the Sierra Rutile Act (as amended), was 7.1% at 31 December 2011.
Furthermore, Sierra Rutile will, in future, cash pay all PAYE taxes, including a prepayment for the next two years of estimated PAYE tax. In all, Sierra Rutile will pay to the Government a total of US$17 million, reflecting the cash value of the historical PAYE taxes, applicable interest thereon and the prepayment of PAYE taxes for the next two years.
Commenting on the agreement, John Sisay, CEO of Sierra Rutile, said, "Sierra Rutile is now in a position that allows us to normalize our relationship with the Government. We sincerely thank the Government for its support during our re-start and turnaround, and are pleased that we are now able to repay the Government and the people of Sierra Leone for that support through the cash payment of our PAYE taxes, both now and on an ongoing basis. Under the previous arrangement, this would not have been the case due to the $472 million of intercompany debt, which will remain in SRHL and would have taken priority to any distribution to the shareholders of SRHL. We believe that this agreement further highlights the fair, stable and business-friendly nature of working in Sierra Leone."
For further information:
Sierra Rutile Limited Telephone: +44 (0)20 7074 1800
John Sisay, Chief Executive Officer /
Joe Connolly, Chief Financial Officer
Canaccord Genuity Limited Telephone: +44 (0)20 7523 8350
John Prior / Adam Miller
Kreab Gavin Anderson Telephone: +44 (0)20 7074 1800
Fergus Wylie / Rupert Trefgarne sierrarutile@kreabgavinanderson.com
Notes to Editors
About Sierra Rutile Limited
Sierra Rutile produces titanium feedstock industrial minerals (primarily rutile, with some associated ilmenite), as well as smaller quantities of zircon. Sierra Rutile's mine, located in the south west of Sierra Leone, is one of the largest natural rutile deposits in the world, with a JORC-Compliant Mineral Resource for measured, indicated and inferred resources for the Sierra Rutile mine of over 600 million tonnes (as at February 2011).
www.sierra-rutile.com