Simmers - Press Release - Simmers to issue shares for cash
SIMMER AND JACK MINES, LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1924/007778/06)
("Simmers" OR "the Company")
Share code: SIM
ISIN: ZAE000006722
SIMMERS TO ISSUE SHARES FOR CASH
Simmer & Jack Mines, Limited (Simmers) today announced that it had received JSE
approval to issue 37 million ordinary shares for cash.
The placement, which represents a 4.99% increase in the issued ordinary share
capital of the company, is expected to raise around R22-million and will be used
to fund Simmers" previously announced acquisition strategy.
"As part of the restructuring we went through at the end of last year, we
earmarked a number of investments which we believe will add substantial value
and grow the company from its present status of a small 10 000 ounce a year
producer to potentially a 400 000 ounce producer in the next three to five
years," said Simmers chief executive, Gordon Miller.
The shares have been purchased by three United Kingdom-based institutions at 59
cents per share, representing a discount of 8.61 % to the 30 trading day
weighted average price ended 30 September 2005.
The cash injection is earmarked for the 90 % held Ezulwini Mining Company and is
required to fund the acquisition, holding and feasibility-study costs for the
former Randfontein Estates number four shaft on the West Rand. The acquisition,
which is subject to the granting of the mining rights, is close to finalisation.
Miller said that Simmers was in the final phase of concluding an acquisition
agreement with Harmony for Randfontein Four shaft, having taken over pumping
operations at the mine.
"The outlook in the current climate is extremely positive. Gold is at its
highest level in 17 years, the Rand is relatively stable and gold revenues are
higher than they"ve been in a long time. I have no doubt that any dilutionary
effect will be more than off-set by the value which the new assets are expected
to yield.
"As far as Buffelsfontein in the North West is concerned, we are expecting court
sanction of the Simmers scheme of arrangement on 19 October, having obtained
approval from both the creditors and the Competition Commission. The turn-around
of our Mpumalanga operations is also beginning to show results," said Miller.
He added that the success of Buffelsfontein was predicated on a gold price of
US$420 per ounce and a Rand/ Dollar exchange rate of R6.3 (R85 000/kg).
FOR FURTHER INFORMATION PLEASE CALL GAIL STRAUSS ON 084 777 4060
Date: 12/10/2005 04:32:56 PM Produced by the JSE SENS Department
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