What next fellas?
Background
SVC Group Limited was incorporated in 1986 as Defiance Mining NL. For a period between 2001 and 2006 the Company operated as a medical technology developer. Since 2006 the Company has been operating as a developer and owner of retirement villages. The securities of SVC were suspended from trading on ASX on 1 October 2008 because of the Company’s inability to provide ASX with full audited accounts for the 2008 financial year.
Since its suspension from trading, the Board of Directors of the Company has been renewed and the new Board has negotiated conversion of debts in excess of $2,000,000 into equity. In the June quarter the Company raised $1,700,000 through a Prospectus offer and subsequently its trading suspension was lifted by the ASX.
Hunter Valley Joint Venture
SVC has a Joint Venture Agreement (JV Agreement) with Coast and Country Developments Pty Limited (CCD) to develop a Hunter Valley property into a Manufactured Home Estate. The property, Lot 99, is adjacent to an existing manufactured village owned by CCD.
Under the terms of the JV Agreement, SVC will lodge a development application in accordance with New South Wales state and local government guidance and technical requirements, facilitate the purchase of pre-manufactured homes by each home purchaser from the home manufacturer, and manage siting of the homes and connection of services. In exchange for its services, SVC will look to recoup its costs from the sale of the manufactured homes and receive 80% of any remaining profits from the sale of the homes.
Manufactured Home Estates
Manufactured Home Estates and long term residential Caravan Parks are a contemporary form of medium density housing development comprising land leased communities in which the residents own or rent manufactured homes on dwelling sites leased from the estate.
The strong demand for low cost housing in the Hunter Valley region should see a good take up rate for both low cost property and low cost rental accommodation.
D.A. Submission
In a meeting between Council officers, CCD, and SVC last month, it was confirmed by Council that in their opinion the development was permissible under their current land zoning and Local Environmental Plan (LEP) for the area. A number of matters were raised by Council including the need for Bush Fire Safety Report, Flora and Fauna Study, Traffic Impact Assessment, Heritage and Social Impact Assessments prior to submission of plans. Of these studies the Company considered that the Bush Fire Safety and Flora and Fauna Study were of high priority having the potential to be highly detrimental to the size, and location of the new estate.
Since this meeting the Company’s specialist consultants have completed a Bush Fire Safety Report and Flora and Fauna Study, the Company is satisfied that no matters have arisen from these reports which could be considered adversely detrimental to the economics or approval success of the proposal.
The Company is now moving forward to complete detailed site layout and infrastructure designs. These designs together with remaining studies will be compiled into a development approval submission in accordance with, and in consideration of State and local legislation governing this type of development.
Zambia Resource Ventures Pty Ltd
Background to Zambia Resource Ventures Pty Ltd
In 2010 and 2011 the Board investigated and considered a number of possible investments and business opportunities. One area that the board considered was resources exploration and mining. To this end, SVC made early-stage investigations regarding copper/cobalt and gold projects in Zambia. In doing so, SVC developed some key relationships in Zambia and conducted early due diligence work and negotiations on one potential copper/cobalt project in the North West Province of Zambia known as the Kalaba Copper Project.
By introducing this project to Zambia Resource Ventures Pty Limited (ZRV) in 2011, a company set up by mining investment experts to investigate and negotiate the development of resource projects in Zambia, SVC did obtain an interest in ZRV of approximately 25% of ZRV’s issued capital for introduction and its costs of approximately $28,000.
In December 2011 ZRV gained an option agreement on the Kalaba Copper Project in the North West fringes of the Zambian Copper Belt, this license area was highly prospective for a significant copper and cobalt ore body based on past drilling results on the license area by companies including Anglo, Equinox, and Roan Selection Trust. In May 2012 a new agreement was reached between ZRV, the Vendor, the Facilitator, and Bannon Limited (ASX : BNX), whereby ZRV relinquished its option rights to the Project in return for a payment from the Vendor and BNX totaling some $80,000 in cash and shares upon exercise of an option between BNX and the Vendor.
A further part of this agreement was the relinquishment of ZRV shares issued to the Facilitator, this has had the effect of reducing the issued capital of ZRV and SVC Group Limited now holds, due to the reduction of the issued capital, approximately 70% of the share capital in ZRV.
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