| Mon 22 Aug 2005, 9:56 | | immers To Tap Into North American Capital |
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Simmer And Jack Mines, Limited - Simmers To Tap Into North American Capital
Markets
SIMMER AND JACK MINES, LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1924/007778/06)
(`the Company`)
Share code: SIM
ISIN: ZAE000006722
SIMMERS TO TAP INTO NORTH AMERICAN CAPITAL MARKETS
Gordon Miller, chief executive of Simmer & Jack Mines, Limited (SIM-JSE) said
today the company had entered into a US$10-million loan and gold royalty
agreement with Canadian resources company, Aberdeen International (AAB -TSX.V).
`This deal is linked specifically to Simmers` bid for DRDGold`s former North
West assets, Buffelsfontein and Hartebeesfontein mines. The deal will provide
immediate working capital and the guarantees required by the provisional
liquidators for the High Court to sanction the scheme of arrangement of the
acquisition,` said Miller.
Miller said that he had the full support of the board and major shareholder to
execute this vital step toward finalizing the purchase of the North West
operations.
`Securing the finance will assist the joint provisional liquidators in
concluding our deal and facilitate the start-up, which in turn will create
thousands of new jobs in a community struggling with a humanitarian crisis,`
said Miller.
The choice of financing is significant: `A loan and gold royalty arrangement is
an attractive option because it protects us against having to go the hedging
route as required by South African lenders and limits the down-side, while
Aberdeen and Simmers stand to benefit substantially if the gold price goes up.
`This deal also raises Simmers` profile on the Toronto Stock Exchange (TSX),
which will be extremely useful for future capital raisings,` said Miller.
He added that following the first anniversary of the loan, Aberdeen has the
option to convert the amount of the loan outstanding to ordinary shares of
Simmer & Jack:
`The loan is convertible to Simmers` equity at a price of R0.80c per share,
which is a substantial premium to the current market price, and the conversion
is subject to shareholder approval at that time. In the event that Simmers`
shareholders do not approve the conversion, a Net Smelter Return (NSR) gold
royalty of 1% will incept for the life of the North West operations.`
The President of Aberdeen, Tony Wonnacott, said: `This is an exciting deal for
us. We have downside protection with the adequate security, and a large upside
on the gold royalty at higher gold prices. Simmers` strategy to acquire
undervalued assets and provide a strong management team to make them profitable,
could lead to additional transactions that would turn Aberdeen into a premier
gold royalty company in South Africa.`
Deon van der Mescht, Simmers` chief operating officer and the man tasked with
turning the North West operations around, said that the agreement was hugely
significant for the people of Stilfontein.
`This agreement means that the Scheme of Arrangement, including the regulatory
approvals, can now be sanctioned. Roughly translated, that means the end of
suffering for a sizeable proportion of the community as it will allow us to
begin the underground operations and create approximately 3 600 new job
opportunities,` said van der Mescht.
Baba Njenje, deputy chairperson of Simmers, and chairperson of Jaganda, a BEE
entity that holds 51% of Simmers, said the deal was also important in terms of
foreign direct investment in South Africa.
`For a junior miner like Simmers to conclude a deal like this indicates that we
are moving in the right direction and that our growth strategy is on track. It`s
quite remarkable considering that less than a year ago this was a moribund
company in serious need of rejuvenation. `
If Simmers succeeds in acquiring the North West operations, it will have taken
another significant step towards meeting its objective of becoming a 400 000 oz
producer within three to five years.
FOR FURTHER INFORMATION PLEASE CONTACT Lucy Corkin on 082 850 4774 or 021 761
0549
Email: lucy@barritt.co.za
Date: 22/08/2005 09:47:05 AM
Produced by the JSE SENS Department
