[miningmx.com] — VILLAGE Main Reef announced on Friday it has sold the majority of the 26% stake it held in First Uranium to AngloGold Ashanti for R205m.
The shares, some 47 million, represents approximately 20% of First Uranium’s total equity sold at 60 Canadian cents per share.
As part of the disposal agreement, Village has entered into a lock-up arrangement with AngloGold, whereby it would not dispose of its remaining 13.5 million First Uranium shares – around 6% of the group’s total equity – for 120 days. It would also not dispose of any of First Uranium subsidiary Mine Waste Solutions’ rand denominated convertible notes for 90 days.
The lock-up periods would extend in the event of AngloGold buying Village’s remaining interest in First Uranium. Post the lock-up, AngloGold would also have a right of first refusal in relation to any further First Uranium equity or MWS Rand notes sales that Village might undertake.
“The receipt of R205m will allow Village to normalise its relationship with its creditors and it will also ensure that Village is debt free in relation to the Deutsche Bank gold forward agreement,’ read a company statement.
“As Village has the option to early settle Deutsche Bank, the cash will allow Village flexibility to minimise any potential risk in relation to any gold price exposure from the gold forward sale in a gold price environment above $1,500 per ounce.’
Said Village CEO Bernard Swanepoel: “The responsible disposal of our shareholding in FIU has been at the forefront of our short term strategy this year, as it is non-core to our business. The successful conclusion of this agreement will strengthen our balance sheet, settle our current debt and allow us to conclude the restructuring at BGM within our anticipated time frame’.