| Fri 12 Mar 2010, 13:48 | | SIM - Simmer & Jack Mines Limited - Recapitalisation of First Uranium and |
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SIM
SIIF
SIM - Simmer & Jack Mines Limited - Recapitalisation of First Uranium and
changes to executive management
Simmer & Jack Mines Limited
(Incorporated in the Republic of South Africa)
(Registration number 1924/007778/06)
Share code: SIM ISIN Code: ZAE000006722
RECAPITALISATION OF FIRST URANIUM AND CHANGES TO EXECUTIVE MANAGEMENT
Simmers moves to assist First Uranium; new interim CEO announced
Simmer and Jack Mines Limited ("Simmers") has announced that the board of
directors has resolved to participate in the recapitalisation of First Uranium
Corporation ("First Uranium"). Simmers, Gold Wheaton Corporation ("Gold
Wheaton") and other investors will participate in the recapitalisation programme
aimed at providing First Uranium with between C$125 million and C$150 million to
be used primarily to complete outstanding capital projects at Mine Waste
Solutions.
Simmers, which currently holds 37.24% of First Uranium, is expected to subscribe
for C$40 million of Rand denominated secured convertible notes ("Rand FIU
Notes") and has in principle agreed to exchange its C$22.7 million loan to First
Uranium for Rand denominated notes with a conversion price of C$1.30 (currently
R9.31).
Commenting on the latest developments, Simmers Chairman Vusi Khanyile said: "In
January 2010 the Simmers board investigated the value proposition at First
Uranium, given the clear requirement for additional funding. The board is
satisfied that there is significant value in First Uranium, especially since the
environmental permit for the new tailings facility at Mine Waste Solutions has
been reinstated.
"We are pleased to participate in a holistic solution that protects Simmers`
significant investment in First Uranium by addressing a number of issues that
have dogged First Uranium in recent months. In addition to resolving its funding
crisis and injecting fresh management into the organisation, the
recapitalisation also settles the Gold Wheaton completion penalty in terms of
the gold stream transaction entered into at Mine Waste Solutions."
Mr Khanyile added that Simmers will fund C$10 million of its participation from
cash reserves and the remaining R220 million (approximately C$30 million) with a
bridge loan facility from Rand Merchant Bank ("RMB"). In due course Simmers will
conduct a rights issue of convertible notes, partially underwritten by RMB.
"In a new spirit of co-operation between the two companies, we will be
appointing three Simmers representatives to the First Uranium board, subject to
approval of the nominees by the Toronto Stock Exchange. Additionally, the First
Uranium board has also offered Simmers CEO, Deon van der Mescht, the position of
interim CEO at First Uranium. Mr Van der Mescht has accepted the position and
will resign from Simmers immediately prior to his appointment by First Uranium.
"While we are sorry to be losing someone of Deon`s calibre, we take comfort in
the knowledge that our significant investment in First Uranium is in sound hands
and we are fortunate to have Nico Schoeman, our Group Business Development
Executive, to take his place. Effectively, this means that management of First
Uranium will now revert to being South-African based," said Mr Khanyile.
Schoeman, a civil engineer by profession, joined Simmers in 2007 and played a
key role in the acquisition of Tau Lekoa Mine and the restructuring of
Buffelsfontein Gold Mine. He has also been instrumental in defining Simmers`
role in the refinancing of First Uranium.
According to outgoing CEO Deon van der Mescht, the changes are positive and
herald a new beginning for both companies.
"I believe that Simmers and First Uranium represent significant inherent value
and that both companies will benefit from leveraging the many synergies that
exist between them. Nico and I have worked closely together over the last three
years on key strategic issues and will endeavour to realise the value that
undoubtedly exists in both companies."
The transaction is subject to a number of conditions and approvals.
For further information please visit www.simmers.co.za or contact:
Simmer & Jack Mines
Gail Strauss (Communications) +27 82 936 8481
Nick Goodwin (Investor relations) +27 83 629 8605
Merchant Bank and Sponsor:
RAND MERCHANT BANK, A DIVISION OF FIRSTRAND BANK LTD
Date: 12/03/2010 13:48:01 Produced by the JSE SENS Department.
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