Bernard Swanepoel

First Uranium rescue plan good for Simmers too - Bernard Swanepoel

| Mon, 15 Mar 2010 17:13 In an interview on SAfm @ 18:08 on 12 March 2010

[miningmx.com] -- Simmer & Jack's proposed recapitalisation of First Uranium will resolve funding issues for both companies, said Bernard Swanepoel, the independent non-executive deputy chair at Simmers.

Simmers about a 37% stake in First Uranium.

"Over the last year or so it became progressively clearer that the projects that First Uranium was constructing were falling behind schedule and were overrunning in terms of budget," Swanepoel said on SAfm Market Update.

With a new board put in place at Simmers, it triggered a process of how to recapitalise First Uranium.

"What is now happening is that in South African rand terms, about R1bn-R1.2bn will be pumped into First Uranium, properly recapitalise it, complete all the projects. Then it is the company it was always meant to be," Swanepoel said.

Simmers CEO Deon van der Mescht will join First Uranium as its interim CEO immediately, resigning his post at Simmers. He will be replaced by Nico Schoeman, Simmers' business development executive.

There was no immediate word on what would happen to First Uranium CEO Gordon Miller or chairman Nigel Brunette.

"I would think that the complete restructuring of the management team and the board announcements will come out in due course," Swanepoel said.

"Obviously the existing board of First Uranium will be reconstituted and shrunk at the same time, but none of the shareholders and none of the participants in this funding was prepared to put additional money in unless there was a significant shakeup in the management team, and I think that's what we've seen today."

Simmers is stumping up C$40m towards the recapitalisation of First Uranium.

"Remember, Simmers in is the process of completing the acquisition of Tau Lekoa, which was a R600m transaction. And that is a company-transforming transaction in its own right," Swanepoel said.

"We do have some cash resources, and then we've also created a facility through Rand Merchant bank, which will be followed up pretty soon with a rights issue of convertible notes, which will be underwritten again by RMB. So we've not only solved the funding problems of First Uranium, we are also very confident we have put a sort of permanent solution on the table for Simmers."

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