| Mon 1 Dec 2008, 11:17 | | SIM - Simmers - First Uranium Signs Definitive Agreement With Gold |
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SIM FUM
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SIM - Simmers - First Uranium Signs Definitive Agreement 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: ZAE00006722
("Simmers" or "the Company")
FIRST URANIUM SIGNS DEFINITIVE AGREEMENT
WITH GOLD WHEATON BARBADOS CORPORATION
Johannesburg - Simmer & Jack Mines. Limited ("Simmers") (JSE:SIM ZAE00006722)
announced today that its 62.3%-held subsidiary, First Uranium Corporation
(TSX:FIU, JSE:FUM, CA33744R1029:ISIN) ("First Uranium") has signed a definitive
agreement with Gold Wheaton (Barbados) Corporation ("GW"), a wholly-owned
subsidiary of Gold Wheaton Gold Corp., in respect of the previously announced
transaction whereby GW will purchase 25 percent of the estimated 2.1 million
ounces of life-of-mine gold production from First Uranium`s Mine Waste Solutions
tailings recovery operation ("MWS") in South Africa.
Application for approval of the transaction will be submitted to the South
African Reserve Bank and the South African Revenue Service. Upon receipt of
proof of such approvals, GW will pay US$50 million (the "First Payment") into an
escrow account (pursuant to a mutually acceptable escrow agreement). The funds
will be released from escrow upon satisfaction of the closing conditions,
including: registration of a notarial bond on certain of the MWS tailings dams
and a pledge of 25 percent of the gold produced from MWS.
Closing of the transaction is expected on or before 12 December 2008.
In addition to the First Payment of US$50 million, the transaction makes
provision for the following payments to First Uranium:
- subject to financing, a Second Payment of US$75 million three months following
the closing of the transaction;
- an ongoing payment equal to the lesser of $400 per ounce (subject to an annual
inflation adjustment of 1.01 percent, starting in the fourth year after the
First Payment) and the prevailing spot price, for each ounce of gold delivered
under the contract;
- if the Second Payment is not paid, the gold stream transaction shall be
reduced to 10% and appropriate credits made.
The transaction highlights the value of First Uranium`s substantial co-product
gold production and provides a degree of financial flexibility by strengthening
its balance sheet as it gears up to add uranium production to the gold
production at both its operations.
First Uranium has agreed to a deliver a minimum of 20,000 ounces of gold into
the transaction during calendar year 2009.
Simmers shareholders are referred to First Uranium`s SENS announcement dated 28
November 2008 or the First Uranium website for further details -
www.firsturanium.com
Johannesburg
01 December 2008
SPONSOR
Sasfin Capital
a division of Sasfin Bank Limited
Date: 01/12/2008 11:17:02 Produced by the JSE SENS Department.
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