Avocet Mining PLC Prospectus December 2011

c105718pu070 Proof 5: 7.12.11_13:45 B/L Revision:
equal to the total consideration paid for AMMO by J&Partners (as subject to actual net cash and
working capital adjustments), further limited by the overall limitations contained in the
Interconditionality Agreement. Claims relating to tax warranties and indemnities must be notified
within two years and other claims within one year from the date of completion, with legal
proceedings in respect of any such claims being required to be issued within a further six months’
period.
(v) Sale and Purchase Agreement relating to PT Arafura Surya Alam
On 23 December 2010 the Company entered into a sale and purchase agreement with J&Partners (the
‘‘PT ASA SPA’’) to, inter alia, sell its rights to subscribe for shares to acquire a 60 per cent interest
in PT ASA.
The PT ASA SPA was subsequently amended by a waiver letter dated 22 February 2011 and by
deeds of variation dated 7 June 2011, 24 June 2011 and 6 September 2011 and in each case between
the Company and J&Partners. On 24 June 2011 the Company and J&Partners signed a restated PT
ASA SPA (the ‘‘Restated PT ASA SPA’’) which replaced in its entirety the PT ASA SPA, without
prejudice, however, to any intervening amendments. Completion of the sale of ASA took place on
30 September 2011.
The total consideration paid by J&Partners on completion of the Restated PT ASA SPA was
US$7,000,000. The consideration is subject to actual net cash and working capital adjustments. These
adjustments have yet to be agreed or determined.
Under the Restated PT ASA SPA, the Company provided customary warranties, including in relation
to the rights to subscribe for PT ASA’s shares, the title to mining rights, the ownership of assets,
material contracts, compliance with laws, litigation, related party transactions, accuracy of PT ASA’s
accounts, post-accounts date events, taxation and employment. The warranties relating to the right to
subscribe for PT ASA’s shares, the title to mining rights, the accuracy of PT ASA’s accounts and off
balance sheet transactions are provided on an indemnity basis. An additional indemnity was given in
relation to tax liabilities in respect of the period up to completion of the transaction.
Warranties and indemnities provided by the Company under the Restated PT ASA SPA are subject
to a US$1,000,000 de minimis provision (including claims under all of the other Sale and Purchase
Agreements), with the Company being liable for the whole amount of a claim in the event it exceeds
the required minimum and is proven to be valid. The maximum aggregate liability of the Company is
equal to the total consideration paid for PT ASA by J&Partners (as subject to actual net cash and
working capital adjustments), further limited by the overall limitations contained in the
Interconditionality Agreement. Claims relating to tax warranties and indemnities must be notified
within two years and other claims within one year from the date of completion, with legal
proceedings in respect of any such claims being required to be issued within a further six months’
period.
(vi) Sale and Purchase Agreement relating to PT Gorontalo Sejahtera Mining
On 23 December 2010 the Company entered into a sale and purchase agreement with J&Partners (the
‘‘PT GSM SPA’’) to sell its entire shareholding in PT GSM representing 75 per cent of the entire
issued share capital of PT GSM.
The PT GSM SPA was subsequently amended by a waiver letter dated 22 February 2011 and deeds
of variation dated 7 June 2011, 24 June 2011 and 6 September 2011 in each case between the
Company and J&Partners. Completion of the sale of PT GSM took place on 30 September 2011.
The total consideration paid by J&Partners on completion of the PT GSM SPA was US$9,053,000,
inclusive of US$53,000 estimated cash. The consideration is subject to actual net cash and working
capital adjustments. These adjustments have yet to be agreed or determined.
Under the PT GSM SPA, the Company provided customary warranties, including in relation to the
title to PT GSM’s shares and mining rights, the ownership of assets, material contracts, compliance
with laws, litigation, related party transactions, accuracy of PT GSM’s accounts, post-accounts date
events, taxation and employment. Warranties relating to the title to PT GSM’s shares and mining
rights, the accuracy of PT GSM’s accounts and off balance sheet transactions are provided on an
indemnity basis. Additional indemnities were given in relation to tax liabilities and unpaid royalty
payments in respect of the period up to completion of the transaction.
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