Announcements
End of Year Review 2012
12/31/2012
Dear Shareholders, Employees and Partners,
The year 2012 has been significant in the history of our organisation. Our professional investment team now manages our onshore investment via a dedicated listed entity in Europe. CPS-PLATINUM was launched and taken up by over 50% of our existing shareholders. The global shareholder base now exceeds 150,000 in over one hundred countries.
CPS-GOLD has successfully been restructured into a closed-end fund that is to be listed in 2013. This means we are accurately on target with the continuous implementation of our growth strategy as was set out to our shareholders when we started offering CPS-GOLD on 1st January 2010.
The response from our shareholder base has been overwhelming with literally tens of thousands of emails congratulating us on the recent major achievements well ahead of schedule. I am pleased to announce that shareholders will be able to exercise their OPTIONs to fully convert their preferred shares into Common Shares from January 2013. Our advice continues that we are urging shareholders not to miss this window of opportunity during which to exercise their OPTIONs as soon as possible. Net Asset Value (NAV) per share is set to grow month on month based on our investment strategy of dividend reinvestment and capital raised from the OPTIONs exercise. CPS-GOLD is to be listed in 2013, a commitment I can now make with absolute certainty.
CPS-GOLD offers our shareholders the exceptional opportunity of acquiring shares in a listed vehicle at a preferential low price and realise fast and maximum return on their investment in line with month on month per share NAV.
What motivates us to offer this opportunity to our CPS-GOLD shareholders?
1. Corporate Strategy – A corporation is meaningless without the foundation of a strong board of directors, executive board and shareholders. As we have grown, we have been able to attract the best talent onto our Directors and Executive Boards. There is strength in numbers to create the critical mass necessary to give us real investment ‘muscle’ and this is where the constant support of our CPS-GOLD holders has been invaluable in taking this organisation to the level it is at today. So, going forward, we are confident that our shareholders will continue to want to be part of our unique and exceptional team.
2. Corporate Statue – By virtue of its closed-end structure, there is a binding contract between the company and each CPS-GOLD holder that prior to a public listing exercise, the company must provide respective OPTIONs to its Convertible Preferred Shareholders. This is the exercise we are currently under-going, thus giving CPS-GOLD holders the OPTIONs to convert their preferred shares to common shares that can subsequently be listed and freely traded in the open stock market.
There has been considerable external demand to buy into CPS-GOLD but this privilege is currently exclusive to our current shareholders under their preferred OPTIONs only. On completion of the listing, any OPTIONs not exercised by our shareholders may be allocated to non-shareholders, institutional investors and investment banks. In reality, this corporation will ultimately raise more funds by selling its shares to the public prior to listing.
I also want to take this opportunity to address some of the issues raised by a small number of unsatisfied shareholders. The re-structuring has not been without its challenges and in the spirit of transparency I am sharing with you that some shareholders took their complaint, believing that Virgin Gold had not acted properly, to the local regulator. Others tried to take action against their referrer or local payment agent. These are very disappointing incidents to us that we take very seriously and always aim to resolve positively. The regulatory system is there to protect investors, which is why we take great care to observe compliance in the countries we operate and deal with any complaints in a professional and subjective manner.
Firstly, responding to some of the doubts expressed about delivering the results we promised, our company committed to pay a monthly dividend and has not failed to do so for more than two and a half years. Even at this stage CPS-GOLD shareholders’ dividends continue to be paid by way of dividend-reinvested back to the company. Dividend-reinvested is critical for the company in the months prior to listing, enabling us to grow exponentially and increase scales of economy to achieve the highest possible listing price. The underlying value of the corporation will be reflected in its share price and the ultimate beneficiaries are our shareholders.
Secondly, shareholders pay 50% of the difference in price between the latest CPS-GOLD (USD1.70) price and current Net Asset Value (NAV) price. This is part of the contract agreed between all shareholders and the company when originally subscribing to CPS-GOLD.
Thirdly, shareholders exercise their OPTIONs voluntarily and are under no obligation to do so. Those who elect not to exercise their OPTIONS may be eligible for Voluntary Asset Distribution of non-listed assets on listing. We are not currently able to quantify this value or provide further information on this issue at this point in time. Our primary objective is to deliver the OPTIONs created for our preferred shareholders to pay 50% of a product they can in future sell at 100% value in the open market. Shareholders exercising their OPTIONs early will effectively benefit from a return of several hundred percent.
Finally, throughout the corporate restructuring exercise in the last quarter of 2012, Virgin Gold has been transparent and kept its shareholders fully informed of the various steps taken in the progress of our business. It is the interest of the majority shareholders that has and will always be at the centre of our strategy and decision-making.
We learn from past experience to improve in the future. Our corporate objectives have been achieved to the satisfaction of the majority of our shareholders from more than 100 countries. It is always important to manage investors’ expectations and communicate with clarity to ensure the terms and conditions of the CPS-GOLD subscription are clearly understood and interpreted. Unfortunately it is not possible to change the original terms that apply to all for the sake of individual disgruntled shareholders. As a company we are obliged to apply proper corporate governance to protect the future of our business and attain maximum benefit for our majority shareholders.
We have made great strides for our business this year and with the lessons learnt we are now better equipped for the opportunities and challenges we currently face and in the future. Consequently we are now reviewing the terms and conditions of our CPS-PLATINUM offering with our legal team to ensure CPS-PLATINUM holders will not pay a price difference to convert preferred shares into common shares during a future public listing exercise.
Concluding 2012 on a positive note with the successful, it has been the greatest pleasure of this management to serve you. Representing the Board of Directors and Executive Board I would like to pay our special tribute to every single one of our considerate shareholders, employees and partners for your continuous support.
Thank you!
Kenneth Elinger
CEO – Virgin Gold Mining Corporation