[miningmx.com] — VILLAGE Main Reef affirmed on Thursday it would pay
a special dividend to shareholders should its exposure to First Uranium be crystallised
into cash, following an announcement by the struggling junior that it was looking to
sell its core assets.
Village owns a 5.7% equity stake in First Uranium, currently valued around R20m, as
well as debentures of Mine Waste Solutions with a face value of R392.8m. Village
acquired these when it took over Simmer & Jack’s assets in a R1.3bn transaction
completed last year. It has already disposed of an equity stake of around 20% in
First Uranium for R205m to AngloGold Ashanti.
Presenting the company’s interim results to investors on Thursday, CEO Bernard
Swanepoel said Village would return the bulk of its proceeds from a future takeover,
or sale of assets, at First Uranium to shareholders in a special dividend.
“With our balance-sheet issues now largely normalised, this money would be surplus
to our needs and distributed to shareholders,’ Swanepoel said, adding he expected
the issue to play out one way or the other within the next three to four months.
Asked by an analyst whether Village would sell the remainder of its equity stake on
the open market, Swanepoel replied “we definitely would if you can find us a buyer’.
“The shares can still go cheaper, but not a lot,’ he said. “If the opportunity presents
itself we will definitely take it.’
First Uranium said on Wednesday that it has received proposals from third parties for
its key assets – Mine Waste Solutions surface operations and Ezulwini underground
mine – which could enable the company to service two series of convertible notes
worth C$322m, of which $150 is due in June.
First Uranium’s share price has fallen from a high of R100 in 2007, to R10 early in
2011 as it battled regulatory and operational issues. It was trading on Thursday at
R1.68.
Another special dividend in the not-so-distant future might come from the proceeds
of the likely sale of antimony asset Cons Murch.
In an interview with Miningmx in November, Swanepoel said Village’s strategy
was not to create a multi-asset empire. He said profits would be paid back to
shareholders once turned-around assets have been brought to account by means of
a sale transaction or IPO.
In step with such a strategy, Swanepoel said on Thursday he would be “surprised if
we’re still the owner of Cons Murch 12 months from now’.
Cons Murch, however, suffered a difficult December-quarter, with production 42%
lower at 837 tonnes of antimony compared to the September-quarter. It was
negatively impacted due to a labour dispute that resulted in the loss of 20
production shifts, as well as a fatality and subsequent work stoppages in November.
