| Tue 29 May 2012, 8:20 | | FUM - First Uranium Corporation - Olma investment group fails to put forward |
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FUM
FIU
FUM - First Uranium Corporation - Olma investment group fails to put forward
an alternative offer - instead makes unrealistic demands which First Uranium
states have "Zero Chance of Being Accepted"
First Uranium Corporation
(Continued under the laws of British Columbia, Canada)
(Registration number C0777384)
(South African registration number 2007/009016/10)
Share code: FUM ISIN: CA33744R1029
May 28, 2012
Olma Investment Group Fails to Put Forward an Alternative Offer - Instead
makes Unrealistic Demands which First Uranium states have "Zero Chance of
Being Accepted"
All amounts are in US dollars unless otherwise noted.
Toronto and Johannesburg - First Uranium Corporation (TSX:FIU), (JSE:FUM)
(ISIN:CA33744R1029) ("First Uranium" or "the Company") today received a
demand from Olma Investment Group and other dissident shareholders to
renegotiate the terms of agreed asset sales and to seek concessions from debt
holders.
"Olma and its partners have repeatedly promised a concrete alternative to our
restructuring plan", John Hick, First Uranium`s lead independent director,
said. "Instead of putting forward a viable stand alone proposal as Olma has
been promoting, they have only come forward with a set of unrealistic demands
that have zero chance of being accepted by the parties involved."
As has been previously communicated, First Uranium`s board of directors first
announced on March 2, 2012 that it had approved the sale, through two
subsidiary holding companies, of its Mine Waste Solutions operation and the
Ezulwini mine, to AngloGold Ashanti Ltd. and Gold One International Ltd. for
$335 million and $70 million respectively.
In advance of that announcement, First Uranium and its advisors contacted
approximately 20 potential buyers around the world and only AngloGold and
Gold One emerged as bona fide bidders. No other credible offer has been
received since the announcement of the two transactions.
First Uranium shareholders are due to consider the proposed transactions at a
special meeting on June 13, 2012.
Olma and others claiming to represent 18 per cent of First Uranium`s
outstanding common shares proposed the following concessions in an email
addressed to the Company and dated May 27, 2012:
Anglo Gold increases its offer price for Mine Waste Solutions by 15% up
to $385 million;
Gold One increases its offer price for the Ezulwini mine by 15% up to
$80.5 million;
First Uranium debenture holders accept a discount of 10% of "nominal
value" in the amount of $14.7 million;
First Uranium note holders accept a discount of 5% of "nominal value" in
the amount of $8.4 million.
A full copy of Olma`s email follows below.
Mr Hick said: "After an exhaustive process assessing all available
alternatives and based on our discussions over the past five months, and
their respective reconfirmations today, we know that neither AngloGold nor
Gold One are willing to reopen negotiations with a view to paying a higher
price for these assets. Given our extensive interaction with the debt
holders, which resulted in the compromises set out in the Company`s
management information circulars, the idea of these parties and, in
particular, the secured debt holders, agreeing to the proposed concessions is
equally implausible."
He added: "The dissidents` demands and lack of an alternative "concrete
proposal" as promised last week, confirm they have no better alternative to
offer than the plan which has already been approved by First Uranium`s board.
Shareholders need to understand that because of the Company`s financial
situation, if the negotiated transactions are voted down, there is a real
possibility that shareholders may be left with nothing, as the Company faces
significant liquidity constraints with impending debt maturities on June 30,
2012 and March 31, 2013. As previously disclosed, Mine Waste Solutions and
Ezulwini also face challenges, including significant funding requirements".
The Board unanimously recommends that shareholders and debt holders vote FOR
the transactions.
Shareholders and debt holders are reminded to vote their proxy FOR the
transactions and all related proposals before the proxy voting deadline on
Monday, June 11, 2012 at 5:00 p.m. (Toronto time).
If you have any questions about the information contained in the Management
Information Circulars or require assistance with voting your securities,
please contact Kingsdale Shareholder Services Inc. by telephone at 1-866-581-
1571 toll-free in North America, or at 1-416-867-2272 outside of North
America (collect calls accepted), or by email at
contactus@kingsdaleshareholder.com.
About First Uranium Corporation
First Uranium Corporation (TSX:FIU, JSE:FUM) operates the Ezulwini Mine, an
underground mining operation, and Mine Waste Solutions (MWS), a tailings
recovery facility. Both operations are situated in South Africa.
For further information, please contact:
John Hick or Mary Batoff
(416) 306_]3072
mary@firsturanium.ca
Text of email received from Olma Investment Group:
May 27, 2012
BY EMAIL
Members of the Board of Directors
First Uranium Corporation
Re: Alternative proposal for the June shareholders meeting
We are writing as a group of shareholders collectively holding 44 million
shares, or 18% of all issued shares of First Uranium Corporation ("Company").
By now, we and our advisors have reviewed the Circular regarding the proposed
Gold One and Anglo Gold Ashanti deals ("Proposal"). We would like to
reiterate our disagreement with the Proposal and hereby inform you that we
will vote against it on the shareholders meeting in June 2012 ("GSM").
Moreover, from our communication with other shareholders to the extent
allowed under Canadian laws and from the views other shareholders expressed
in the public domain, it strongly appears that other sizable holders will
vote against the Proposal as well.
Rather than wait for a month to see a failed GSM and the Company in a
strategic limbo, facing difficult options, we would like to propose the
following improved transaction ("Improved Proposal"), which will be supported
publicly by us and is likely to pass on the GSM.
Anglo Gold increases its offer price for MWS operations by 15% up to
$385 million;
Gold One would increase its offer price for Eluzwini mine by 15% up to
$80,5 million;
Debenture holders accept a discount of 10% of nominal value in the
amount of $14,7 million;
Note holders accept a discount of 5% of nominal value in the amount of
$8,4 million.
We believe that the majority of Debenture and Note holders should prefer
discounted payout next month to a potential recovery through a prolonged
bankruptcy process. The proposed discounts match with today`s market prices
for these debentures and notes.
Common shareholders would be paid an amount in the range of $0.45-$0.55 per
share according to our calculations. As mentioned above, our group of
shareholders would support the Improved Proposal. In this case, we would
agree to abstain from any further legal actions against the BOD of the
Company.
We believe that this improved transaction structure represents a compromise
solution and would be acceptable for all classes of stakeholders in the
Company.
We urge you to negotiate proposed conditions with all the parties involved as
soon as possible, provide us a formal response, and add the Improved Proposal
to the agenda of the GSM.
Sprott Asset Management
Olma Investment Group
Stratton Enterprise Incorporated
Patto Corporate Services
Cautionary Language Regarding Forward-Looking Information
This news release contains and refers to forward-looking information based on
current expectations. All other statements other than statements of
historical fact included in this release are forward-looking statements (or
forward-looking information). The Company`s plans involve various estimates
and assumptions and its business and operations are subject to various risks
and uncertainties. For more details on these estimates, assumptions, risks
and uncertainties, see the Company`s most recent Annual Information Form and
most recent Management Discussion and Analysis on file with the Canadian
provincial securities regulatory authorities on SEDAR at www.sedar.com. These
forward-looking statements are made as of the date hereof and there can be no
assurance that such statements will prove to be accurate, such statements are
subject to significant risks and uncertainties, and actual results and future
events could differ materially from those anticipated in such statements,
including without limitation, the statements regarding the proposed
transactions with Gold One International Limited and AngloGold Ashanti
Limited. Accordingly, readers should not place undue reliance on forward-
looking statements that are included herein, except in accordance with
applicable securities laws.
www.firsturanium.com
Sponsor: Investec Bank Limited
29 May 2012
Date: 29/05/2012 08:20:01 Produced by the JSE SENS Department.
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