[miningmx.com] — A FRESH bid for the control of TSX and JSE-listed gold
producer First Uranium should be backed by an unconditional and fully financed offer
of at least $450m, according to the company’s board of directors.
The board responded on Tuesday to an undertaking made last week by Waterpan
Mining Consortium on a possible counter-offer for 100% of the failed gold miner. The
offer is due to be submitted before shareholders have to vote on June 13 about
existing proposals for the sale of key assets for a combined $405m.
As things stand, Gold One is offering $70m for underground mine Ezulwini, with
AngloGold Ashanti offering $335m for gold dump operator Mine Waste Solutions.
Around $320m of the sales proceeds would go towards the settlement of debt, with
shareholders standing in line for distributions of an estimated C$0.11 per share.
In its latest comment on the issue, First Uranium said any bidder should take
cognisance of the fact that both its bond holder programmes – debentures with a face
value of C$150m, due end-June, and secured notes worth around C$170m, due end-
March 2013 – are payable within 30 days should a change in control of the company
occur. The secured notes are payable at 105% of the face value, plus interest.
“In order to finance the acquisition in cash of 50% or more of the common shares of
First Uranium, an offeror such as Waterpan would have to have sufficient cash
resources to: (i) repay the required amounts under each of the secured convertible
notes, the debentures and the $10m outstanding under the loan from Gold One
International, plus interest on all of this debt, which the company estimates will be in
excess of an aggregate of C$340m; (ii) severance costs triggered by the change of
control terms under employment agreements; (iii) have sufficient working capital to
continue the operations at Mine Waste Solutions and Ezulwini [together with corporate
costs]; and (iv) purchase the common shares together with related costs at a
premium to the amount provided under the proposed transactions,’ read the First
Uranium statement.
“The above may result in total aggregate required funding in excess of $450m.’
The Gold One and AngloGold transactions, First Uranium said, were fully funded and
would be completed by no later than June 29.
