| Thu 16 Nov 2006, 8:21 | | Simmers - Filing of preliminary prospectus for ini |
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SIM
SIIF
Simmers - Filing of preliminary prospectus for initial public offering
SIMMER & JACK MINES LIMITED
(Registration number 1924/007778/06)
Share code: SIM & ISIN: ZAE000006722
16 November 2006
FILING OF PRELIMINARY PROSPECTUS FOR INITIAL PUBLIC OFFERING BY FIRST URANIUM
CORPORATION
NEW CANADIAN COMPANY TO ACQUIRE URANIUM AND GOLD DEVELOPMENT ASSETS IN SOUTH
AFRICA
Simmer & Jack Mines, Limited ("Simmers") is pleased to announce that a
preliminary prospectus has been filed with the securities commissions in each of
the provinces and territories of Canada for the initial public offering ("IPO")
of First Uranium Corporation ("First Uranium"), its proposed uranium and gold
subsidiary. RBC Capital Markets is acting as the lead underwriter with respect
to the proposed IPO. A copy of the preliminary prospectus will be publicly
available shortly on SEDAR at www.sedar.com.
Proceeds from the IPO will be used primarily for funding the development and
construction of two uranium and gold plants - one being a proposed tailings dump
reprocessing facility near Simmers" current Buffelsfontein underground mine, and
the other involving the recommissioning of the underground Ezulwini uranium and
gold mining operation.
Prior to the closing of the IPO, Simmers will transfer two South African
subsidiaries, First Uranium (Pty) Limited, owner of certain assets relating to
the Buffelsfontein project, and Ezulwini Mining Company (Pty) Ltd, owner of
certain assets relating to the Ezulwini project, to First Uranium in return for
common shares of First Uranium (collectively, the "Reorganization").
Immediately following the completion of the Reorganization, Simmers will hold a
majority interest in First Uranium.
In addition to the IPO financing, First Uranium has executed a term sheet with
Investec Bank Limited in respect of potential debt financing (the "Project
Finance") for the Ezulwini and Buffelsfontein projects. The availability of the
Project Finance is subject to a number of conditions, including, among others,
the completion of due diligence by the lender, the completion of the IPO and the
entering into of definitive loan agreements.
The pre-production capital costs for the development of the Buffelsfontein and
Ezulwini projects are estimated to be approximately US$300 million in aggregate,
to be spent over the next three years. Management anticipates that these costs
will be funded with a combination of the net proceeds of the IPO, the Project
Finance funds and operating cash flow. Simmers does not expect that First
Uranium will require additional financing or credit support from Simmers to
develop these projects.
Simmer"s Chief Executive, Gordon Miller, who has also been appointed as Chief
Executive of First Uranium, said
"The North American capital markets are the ideal place to raise capital for
large-scale uranium and gold projects. On conclusion of the IPO, First Uranium
should be very well positioned in that it will hold two near-term uranium and
gold projects."
Jim Fisher, who has been appointed as Chief Operating Officer of First Uranium,
commented:
"On completion of project construction, First Uranium will be positioning itself
as a pre-eminent uranium and gold producer. The Ezulwini project is expected to
produce gold in the second quarter of 2007 which management intends to have
processed by means of a toll treatment arrangement with a nearby processing
plant. The first gold to be milled and the first uranium to be produced at
Ezulwini are expected by management by the end of 2008. The first uranium and
gold production from the Buffelsfontein tailings recovery is expected by mid-
2008."
Specific economic information relating to the IPO, including the gross proceeds
of the offering, the IPO offering price and Simmers" ownership percentage in
First Uranium following the completion of the IPO will not be finalized or
announced until the pricing of the IPO and the filing of First Uranium"s final
prospectus, which are expected to occur in early December.
Simmers has received approval from the South African National Treasury
("National Treasury") for the Reorganization and IPO, and is currently awaiting
formal South African Reserve Bank ("SARB") approval and the conditions of such
approval.
"This is a complex transaction and we are very mindful of the support and
commitment that we have received from the authorities, specifically the
Department of Minerals and Energy, National Treasury, SARB and the Ministry of
Finance. We have engaged with all parties for some time in regard to our capital
raising plans and it is clear they share our vision for the development of this
resource," said Miller.
The IPO is expected to be completed by the end of the year; however, Simmers
cautions that the IPO is conditional upon the approval of various matters by
regulatory authorities in South Africa and Canada, including the acceptance of a
final prospectus by the various Canadian securities commissions.
On conclusion of the IPO, Robert Franklin, currently a director with Barrick
Gold Corporation, will take on the role of lead independent director of First
Uranium, supported by new independent directors, John Hick and Patrick Evans.
The board of directors will also include George Faught, an existing director of
First Uranium, and Simmers" chairman, Nigel Brunette.
At the outset, First Uranium will fully comply with the objectives of the
Mineral and Petroleum Resources Development Act in terms of Black Economic
Empowerment ownership requirements with a minimum see through ownership of 26%
held in the hands of historically disadvantaged South Africans ("HDSA"). First
Uranium is expected to create in excess of 5,000 new direct mining jobs.
Summary of the Buffelsfontein Project:
Buffelsfontein Gold Mine, situated 160 kilometres south-west of Johannesburg is
a combination of the old Buffelsfontein and Hartebeesfontein gold mines, both
historical producers of gold and uranium. While the Buffelsfontein Gold Mine
will remain wholly owned by a subsidiary of Simmers, First Uranium"s
Buffelsfontein project will involve the construction of an above ground tailings
recovery operation to process the approximately 291 million tonnes of tailings
contained in nine tailings dumps in the immediate vicinity. The recent rise in
uranium and gold prices has made this resource economical. The tailings dumps
will be mined using high-pressure water cannons to re-pulp the slurry, which
will then be pumped to processing plants and separated into gold and uranium
using a leach process. The location, ease of processing and the dual commodity
mix combine to make Buffelsfontein a low-cost, resilient operation. The life of
the current mine plan for this project is 14 years.
The following is a summary of the estimated mineral resources contained in the
nine tailings dumps that comprise the Buffelsfontein project as set out in the
Buffelsfontein Technical Report (as defined below):
Measured Tonnes Gold Grade U3O8 Grade Cont. Gold Cont. U3O8
(t 000"s) (g/t) (%) (oz 000"s) (lb 000"s)
Buffels 2 23,700 0.40 0.0087 301 4,544
Buffels 3 29,400 0.35 0.0103 335 6,674
Buffels 4 16,380 0.38 0.0102 202 3,682
Buffels 5 45,584 0.21 0.0062 306 6,229
Total 115,064 0.31 0.0083 1,144 21,130
Indicated Tonnes Gold Grade U3O8 Grade Cont. Gold Cont. U3O8
(t 000"s) (g/t) (%) (oz 000"s) (lb 000"s)
Harties 1 92,576 0.32 0.0061 941 12,446
Harties 2 35,640 0.31 0.0058 354 4,556
Harties 5 23,133 0.31 0.0053 228 2,702
Harties 6 14,604 0.22 0.0059 105 1,899
Total 165,953 0.31 0.0059 1,628 21,603
Total 281,017 0.31 0.0069 2,772 42,733
Measured +
Indicated
Inferred
Harties 7 1,740 0.54 0.0243 30 932
Notes:
1 CIM definitions were followed for mineral resources.
2 A zero grade cutoff grade was used.
3 Rows and columns may not add exactly due to rounding.
4 Preliminary metallurgical test results indicate that recoveries will
be approximately 27% for uranium and 68% for gold.
All technical disclosure in this press release relating to the Buffelsfontein
project is taken from a technical report (the "Buffelsfontein Technical Report")
entitled "Technical Report - Preliminary Assessment of the Buffelsfontein
Project, Northwest Province, Republic of South Africa" dated November 8, 2006
prepared in accordance with Canadian National Instrument 43-101 ("NI 43-101") by
R. Dennis Bergen, P.Eng and Wayne Valliant, P.Geo of Scott Wilson Roscoe Postle
Associates Inc., each of whom is a "qualified person" under NI 43-101 and is
independent of First Uranium. The disclosure contained in this press release has
been reviewed and approved by Mr. Bergen and Mr. Valliant.
Summary of the Ezulwini Project:
The proposed Ezulwini project will involve the re-commissioning of an
underground uranium and gold mining operation located approximately 40
kilometres from Johannesburg on the outskirts of the town of Westonaria in
Gauteng Province, South Africa. The mine is currently operating on a care and
maintenance basis. The mine was constructed in the 1960s and reached production
of 200,000 tonnes per month in the same decade. In 2001, mine production at
Ezulwini was ceased primarily as a result of capital constraints compounded by a
weak gold and uranium market environment. First Uranium"s plans for the
development of the Ezulwini project include the rehabilitation and re-
engineering of the main mine shaft through the installation of a floating steel
tower, de-stressing the area where the shaft pillar intersects the shaft barrel,
and the construction of uranium and gold processing facilities. First Uranium
believes that the rectification programme will enable the Ezulwini project to
reach a production output of approximately 130,000 tonnes per month by 2009 and
180,000 tonnes per month by 2012 as both the Upper Elsburg shaft pillar is
developed and the Middle Elsburg uranium and gold section stopes are opened and
expanded. The life of the current mine plan for the Ezulwini project is 19
years.
The following table is a summary of the estimated mineral resources of the
Ezulwini Project as set out in the Ezulwini Technical Report (as defined below):
Measured Tonnes Gold Grade U3O8 Grade Cont. Gold Cont. U3O8
Reef (t 000"s) (g/t (%) (oz 000"s) (lb 000"s)
UE Shaft Pillar 2,101 7.7 - 520 -
Middle Elsburg 2,450 4.9 0.072 384 3,888
Total 4,551 6.2 n/a 904 3,888
Indicated Tonnes Gold Grade U3O8 Grade Cont. Gold Cont. U3O8
Reef (t 000"s) (g/t) (%) (oz 000"s) (lb 000"s)
UE Shaft Pillar 4,586 6.1 - 900 -
Middle Elsburg 1,370 5.8 0.095 257 2,880
Total 5,956 6.0 n/a 1,157 2,880
Measured + Tonnes Gold Grade U3O8 Grade Cont. Gold Cont. U3O8
Indicated
Reef (t 000"s) (g/t) (%) (oz 000"s) (lb 000"s)
UE Shaft Pillar 6,687 6.6 - 1,420 -
Middle Elsburg 3,820 5.2 0.080 641 6,768
Total 10,507 6.1 n/a 2,061 6,768
Inferred Tonnes Gold Grade U3O8 Grade Cont. Gold Cont. U3O8
Reef (t 000"s) (g/t) (%) (oz 000"s) (lb 000"s)
Upper Elsburg 64,550 5.8 - 12,055 -
Middle Elsburg 136,910 4.6 0.076 20,074 229,329
Total 201,460 5.0 n/a 32,129 229,329
Notes:
1 CIM definitions were followed for mineral resources.
2 Mineral resources in the Upper Elsburg shaft pillar are estimated at a
4.0 g/t cutoff grade
3 Mineral resources are estimated using an average long-term gold price
of US$500 per ounce, and a US$/R exchange rate of 7.0.
4 A minimum mining width of 1.53 m was used.
5 Rows and columns may not add exactly due to rounding.
6 As at the date of closing of the IPO, the Ezulwini Project will be 90%
owned (indirectly) by First Uranium and 10% owned by Waterpan Mining
Consortium. The above resource table presents 100% of the estimated
mineral resources.
All technical disclosure in this press release relating to the Ezulwini project
is taken from a technical report (the "Ezulwini Technical Report") entitled
"Technical Report - Preliminary Assessment of the Ezulwini Project, Gauteng
Province, Republic of South Africa" dated November 8, 2006 prepared in
accordance with Canadian National Instrument 43-101 ("NI 43-101") by Wayne
Valliant, P.Geo and R. Dennis Bergen, P.Eng of Scott Wilson Roscoe Postle
Associates Inc., each of whom is a "qualified person" under NI 43-101 and is
independent of First Uranium. The disclosure contained in this press release has
been reviewed and approved by Mr. Valliant and Mr. Bergen.
Cautionary Statement Regarding Forward-Looking Statements
Some of the statements contained in this release are forward-looking statements,
such as statements that describe Simmers" and First Uranium"s intentions
regarding the proposed development of the Buffelsfontein and Ezulwini projects,
the availability of the debt facilities for financing the projects, the proposed
uranium and gold production schedule for the projects, the anticipated closing
date of the IPO, and the estimated pre-production capital cost requirements for
the projects as well as First Uranium"s expectation of being able to satisfy
those obligations. Since forward-looking statements are not statements of
historical fact and address future events, conditions and expectations, forward-
looking statements by their nature inherently involve unknown risks,
uncertainties, assumptions and other factors well beyond Simmers" and First
Uranium"s ability to control or predict. Actual results and developments may
differ materially from those contemplated by such forward-looking statements.
Material factors that could cause actual events to differ materially from those
contained in such forwarding-looking statements include (i) fluctuations in
uranium and gold prices, (ii) First Uranium"s ability to secure the appropriate
mining rights and licenses, and to finance and obtain the necessary equipment,
for the development, construction and operation of its proposed projects, (ii)
its ongoing ability to comply with BEE requirements, (iii) delays or cost
increases in the development and construction of the Buffelsfontein and Ezulwini
projects,(iv) the effects of weather; operating hazards and adverse geological
conditions; (v) labour shortages or disruptions, and (vi) changes in
governmental laws, regulations, economic conditions or shifts in political
attitudes or stability.
These forward-looking statements should not be relied upon as representing First
Uranium"s views as of any date subsequent to the date of this release. There can
be no assurance that forward-looking statements will prove to be accurate, as
actual results and future events could differ materially from those anticipated
in such statements. Accordingly, readers should not place undue reliance on any
forward-looking statements.
Any economic analysis contained in this release is based, in part, on Inferred
Resources, and is preliminary in nature. Inferred Resources are considered too
geologically speculative to have mining and economic considerations applied to
them and to be categorized as Mineral Reserves. There is no certainty that the
reserves development, production and economic forecasts on which any such
economic analysis is based, will be realized.
Ends
Additional Simmers information may be found at www.simmers.co.za
For further information contact:
Gordon Miller
Mobile: +27 82 808 9246
Email: gordon@simmers.co.za
Or
Gail Strauss
Mobile: +27 84 777 4060
Email: gailstrauss@mweb.co.za
Date: 16/11/2006 08:21:24 AM Produced by the JSE SENS Department
