First Uranium warned against ‘horror’ of liquidation

[miningmx.com] – INSTITUTIONAL Shareholder Services (ISS), a proxy
advistory firm, urged shareholders of First Uranium to accept two bids for assets
currently being opposed by minority shareholders.

In a report on the proposed sale of Mine Waste Solutions to AngloGold Ashanti for
$335m and the Ezulwini mine to Gold One International for $70m, ISS commented:
“Given the lengthy, public process by which the board arrived at both these
agreements, moreover, the probability of another credible offer – for either business –
emerging now at a meaningfully higher valuation appears thin.”

Russia’s Olma Investments and other shareholders representing about 18% of First
Uranium’s issued share capital have opposed the sales on the basis that the payments
to shareholders are too low.

First Uranium management, however, say in the absence of other bids – which they
consider likely – liquidation will result in even lower returns to shareholders, a view
ISS supported.

Said ISS: “… a trip through the bankruptcy process…raises a fresh set of horrors not
only because the bankruptcy process is designed to protect debt holders rather than
shareholders, but because the key physical assets are not located where Canadian
courts have jurisdiction, and might be treated substantially differently by South
African courts, ministers and regulators with different constituencies and priorities”.

Olma has expressed disappointment that First Uranium’s board has not approached
AngloGold Ashanti or First Uranium for higher offers, and steadfastly believes higher
bids for the assets will arrive.