| Wed 5 Nov 2008, 9:42 | | SIM - Simmers - First Uranium Enters Into Letter Of Intent With Gold Wheaton |
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SIM - Simmers - First Uranium Enters Into Letter Of Intent With Gold Wheaton
Barbados Corporation
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")
FIRST URANIUM ENTERS INTO LETTER OF INTENT WITH GOLD WHEATON BARBADOS
CORPORATION
Gold stream transaction monetizes 25 percent of gold production from MWS
Johannesburg - Simmer & Jack Mines. Limited (Simmers or the Group) (JSE:SIM
ZAE00006722) announced today that its 62.3%-held subsidiary, First Uranium
Corporation (TSX:FIU, JSE:FUM, CA33744R1029:ISIN) (First Uranium) had entered
into a letter of intent with Gold Wheaton (Barbados) Corporation (GW), a
wholly-owned subsidiary of Gold Wheaton Gold Corp., whereby GW will purchase
25 percent of the estimated 2.1 million ounces of the life-of-mine gold
production from First Uranium`s Mine Waste Solutions tailings recovery
operation (MWS). Subject to certain conditions and approvals, the transaction
is expected to close in late November 2008.
Under the terms of the Transaction, GW shall pay First Uranium:
- $125 million, payable as follows:
* $50 million on or before November 28, 2008 (the "First Payment"); and
* subject to financing, $75 million on or before February 27, 2009 (the
"Second Payment");
- an ongoing payment equal to the lesser of $400 per ounce and the prevailing
spot price (subject to an annual inflation adjustment of 1 percent, starting
in the fourth year after the First Payment);
- if the Second Payment is not paid, the gold stream transaction shall be
reduced to 10% and appropriate credits made.
GW will not be required to contribute to any capital or exploration
expenditures in respect of First Uranium`s tailings recovery operation.
Provided that the Second Payment is paid, GW will be granted a right of first
refusal on any future gold stream agreements or similar arrangements proposed
to be entered into by First Uranium or its subsidiaries in respect of the Mine
Waste Solutions Project or the Ezulwini Mine.
Gordon Miller, chief executive of Simmers said that the transaction had
significant benefits for the Group as it would strengthen First Uranium`s
balance sheet in the transitional phase from mine developer to uranium and
gold producer, allowing it to focus on our long-term growth strategy.
Simmers shareholders are referred to First Uranium`s SENS announcement or the
First Uranium website for further details - www.firsturanium.com
Johannesburg
05 November 2008
SPONSOR
Sasfin Capital
a division of Sasfin Bank Limited
Date: 05/11/2008 09:42:02 Produced by the JSE SENS Department.
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