[miningmx.com] — CEO of recently beefed-up Village Main Reef Bernard Swanepoel said Simmer & Jack’s (Simmers’) R155m Absa notes, due by August, could be settled with the capital locked up in the gold junior’s 25% stake in First Uranium.
Village reported interim financial statements for the period to end-December on Tuesday – numbers which to all intents and purposes would be irrelevant to the shareholders of the company, which has since concluded the acquisition of antimony asset Consolidated Murchison and received approval for the takeover of Simmers.
The financials only reflected continued prospecting operations at the group’s Lesego platinum project, posting a headline loss of 2.78 cents per share.
Village’s next set of results would include figures for Cons Murch, after raising R22.5m and completing the acquisition of the antimony mine earlier in March.
Cons Murch was sold in September by Metorex to To The Point (a consultancy group headed by Swanepoel), after the mine lost R79.2m in the year to end-June.
Swanepoel said the new management team had succeeded in raising output to 22,000 tonnes per month. This, coupled with a recent rise in the antimony price, was enough for the asset to achieve breakeven.
“We’re on track to raise production further to 27,000t over the next two quarters, and then sustain output at that level,’ said Swanepoel. “We hope to report at that time that Cons Murch can wash its own face and add some profitability to our numbers.’
Swanepoel said the Simmers transaction should be finalised by May, following the approval of both companies’ shareholders for the deal last week.
One pressing issue at Simmers that Swanepoel would have to deal with almost immediately was the settlement of Simmers’ R155m Absa notes, which fell due in July and August.
“One of the two obvious alternatives is to let the notes roll over,’ said Swanepoel. “But we can also use the capital in First Uranium for that purpose.’
In an interview with Miningmx following last week’s shareholder meetings, Swanepoel said it would be untenable to remain an anchor shareholder in First Uranium while having little ability to influence what the company did.
Simmers saw its stake in First Uranium watered down from about 33% to 25%, following a C$50m fund-raiser by the uranium miner in February.
“That stake does not make sense unless there are synergies between the two companies and a constructive relationship,’ said Swanepoel. “There’s a strong possibility that the capital Simmers has tied up in First Uranium could be redeployed elsewhere.’
On Lesego, Swanepoel said Village was “only days away’ of establishing whether more drilling results confirmed that the platinum-bearing Merensky and UG2 reefs were shallower than previously thought.
Village is busy with the second phase of its bank feasibility study at Lesego, due for completion in the second half of this year.
