Aviva Corporation

 

CHAIRMAN’S ADDRESS TO ANNUAL GENERAL MEETING

Mr. Antonino Iannello:

“After a very challenging period, I am pleased to advise shareholders that it has been a productive year for Aviva.

The company has successfully refocused its activities on its resource development strengths and has achieved a number of milestones from around the globe, spanning Kenya, Botswana and Western Australia.

Earlier this year, Aviva acquired an interest in a West Kenya gold and base metals project, through a joint venture agreement with AfriOre International, a wholly owned subsidiary of Lonmin Plc, the world’s third largest producer of platinum.

 

Aviva undertook extensive due diligence work in respect of the West Kenyan project, outlining a US$3 million scope of work being Aviva’s contribution to earn an initial 51% of the two project licenses within three years. A   drilling program has commenced initially targeting the the Bumbo Copper-Zinc prospect and thereafter a number of gold prospects including the Dhabhu target.  

 

Since announcing the Coolimba Project was not successful in the power procurement program conducted by the State owned Synergy in 2009, Aviva has continued to develop the project to a stage where it will be able to capture some value. During the year under review, the Coolimba Power project received final environmental approvals, and is now truly a development ready project.

 

Under current energy policy, however, it is unlikely that this project will be developed as an Independent Power Project but could be developed as a captive energy supply for a large resource project.

 

It is now Aviva’s view that development as a vertically integrated power source for one or more iron ore projects in the mid-west is more likely.

 

On 22 September, the company announced that it had nominated a preferred development proponent for Coolimba and entered into a Term Sheet and Exclusivity Period extending to 31 January 2011. The Term Sheet provides for the establishment of a special Purpose Vehicle to take the project forward and includes the payment of $1.25m to Aviva on execution of the detailed documents, a payment of $11m upon initial financial close, and an ongoing economic interest in the power project.

 

At Mmamantswe, in Botswana, a probable reserve of 895 million tonnes has exceeded Aviva’s expectations. Importantly, this significant coal deposit is most favourably located in proximity to neighbouring South Africa’s state-owned transmission grid.  The political environment still remains uncertain. South Africa released its Integrated Resource Plan in early October and it does not provide for any independent coal fired power until 2027. A position which we believe is not sustainable.

 

The actions we have taken around the carrying value of this asset reflect the Board’s concerns over the political environment. The company will continue its efforts to extract value, in the same way it has done with Coolimba.

 

I would like to commend our Chief Executive Officer, Lindsay Reed and his team for their valuable work this year. 

It is with regret we advise that Mr. Greg Corner, who was our Company Secretary from date, passed away in May 2010, following a long illness. On behalf of Aviva’s Management and Board, we extend our sincerest condolences to Greg’s family and friends.

 

I also advise this will be my last year as Chairman. I’ll be stepping down from the board soon after the Annual General Meeting. An announcement on the new Chairman will be made soon. I look forward to observing the progress of Aviva.

 

After the meeting, the Directors and senior management team would like you to join us for some light refreshments.

 

I would now like to introduce our CEO, Mr. Reed to provide a brief update on Company activities.”