| Tue 5 Jun 2007, 8:24 | | SIM - Simmer & Jack Mines Limited - General issue |
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SIM
SIIF
SIM - Simmer & Jack Mines, Limited - General issue of shares for cash
Simmer & Jack Mines, Limited
(Incorporated in the Republic of South Africa)
(Registration number 1924/007778/06)
Share code: SIM ISIN Code: ZAE000006722
("Simmers" or "the Company")
GENERAL ISSUE OF SHARES FOR CASH
SIMMERS RAISES R350-MILLION TO FAST-TRACK NEW GOLD PROJECTS
Introduction
At the annual general meeting of the Company held on 29 September 2006, the
requisite majority of Simmers shareholders approved an ordinary resolution
authorising the directors to issue shares for cash in accordance with paragraph
5.52 of the JSE Limited ("JSE") Listings Requirements ("general authority"). In
accordance with the general authority the Company has successfully placed 53 701
689 ordinary shares ("the placed shares"), equating to 5.36 per cent of the
Company`s issued share capital, raising R349 060 978.50. The placed shares have
been listed on the JSE with effect from the commencement of business on 5 June
2007 and rank pari passu with the existing ordinary shares of the Company. They
were placed with approximately 38 institutional shareholders, all of whom
qualify as "public" shareholders within the meaning of paragraphs 4.25 and 4.26
of the JSE Listings Requirements.
Application of proceeds
The proceeds will be used to re-open the high grade Five Shaft at its
Buffelsfontein operation in the North West province and to accelerate the
exploration and development of the heap leach potential at its Mpumalanga-based
subsidiaries, TGME Limited (TGME) and Sabie Mines.
"We initially aimed for R300-million but as a result of the unprecedented
demand, the Simmers board agreed that an additional R50-million would
significantly speed up the development process on the gold projects and provide
additional working capital," said Simmers chief executive, Gordon Miller.
In terms of the private placing, Simmers placed 53 701 689 ordinary shares at an
issue price of R6.50 per ordinary share, being a 9.02% discount to the 30 day
volume weighted average price of R7.14 per ordinary share as at 16 May 2007.
Miller said that the share placement had been six-and-a-half times
oversubscribed.
"Given the demand, it was simply not possible to meet the full applications
received. For this reason, the Simmers board decided to allocate 30% of the
placement to BEE shareholders, with the balance of the shares allocated as
13.17% of all applications."
The new shareholders comprise a broad spread of institutional, BEE and private
clients.
The cash injection is earmarked for the re-opening of the high-grade Number Five
Shaft at Buffelsfontein. An independent NI 43-101 and SAMREC compliant technical
report has confirmed the valuation of Buffelsfontein, including Five Shaft as
follows: an net present value for Buffelsfontein of R2.372 billion using a
nominal discount rate of 15.23%, an average life of mine gold price of US$629
per ounce and an exchange rate of R7.51 to the US dollar.
The project is expected to cost R170-million and will add 700,000 reserve ounces
at a capital cost of US$33 per reserve ounce. Production at Five Shaft will
commence in the current financial year and is expected to deliver 12 000 ounces
by March 2008 at a cash cost of US$378 per ounce.
An additional R130-million has been earmarked for a feasibility study to confirm
the findings of a detailed conceptual study that has outlined the potential to
define 1-million ounces of resources and 733 000 ounces of reserves by end 2008
at the company`s Mpumalanga operations. Should the feasibility prove
successful, production could ramp up to a rate of 250 000 ounces per annum by
F2011 at a total capital and operating cost of $240 per ounce, assuming an
exchange rate of R7.40 to the US$.
The funds will be applied in three phases:
* Accelerate and complete the drilling programme to allow the Company to
evaluate the resource potential of the surface deposits;
* Complete a pre-feasibility study based on those drill results by March
2008;
* Construction of new heap leach pads to confirm cost and metallurgical
parameters for the bankable feasibility study by March 2009.
Financial effects
The table below reflects the unaudited pro forma financial effects of the above
mentioned general issue of shares for cash. The pro forma financial effects have
been prepared for illustrative purposes only and in terms of the Listings
Requirements of the JSE and therefore due to their nature, may not truly reflect
Simmers` financial position or results. The directors of Simmers are responsible
for the preparation of the pro forma financial effects.
Before the Pro forma Change
issue after the (%)
issue
Basic loss - cents per 11.08 10.48 5.68
share
Headline loss - cents per 10.48 9.88 5.68
share
Net asset value ("NAV") - 27.02 65.69 143.09
cents per share
Net tangible asset value 27.02 65.69 143.09
("NTAV") - cents per share
Number of shares in issue 1,004,986,635 1,058,688,324 5.34
Notes:
i The "Before the issue" figures are based on Simmers` published results
for the half year ended 30 September 2006.
ii The "Pro forma after the issue" column is based on the assumption that
the issue was effective on 1 April 2006 for basic loss per share and
headline loss per share. It is assumed that the proceeds will be
utilised for capital expenditure and working capital and will
therefore not affect earnings for the period. Losses per share,
however, will be diluted by the new number of shares in issue.
iii The "Pro forma after the issue" column is based on the assumption that
the issue was effective on 30 September 2006 for NAV and NTAV
purposes.
Johannesburg
5 June 2007
Corporate adviser
Qinisele Resources (Pty) Limited
Legal adviser
Routledge Modise
Sponsor
Sasfin Capital
a division of Sasfin Bank Limited
Date: 05/06/2007 08:24:25 Produced by the JSE SENS Department.
