JOHANNESBURG (miningweekly.com) – Beleaguered mining firm First Uranium on Tuesday confirmed it had received an expression of interest from a group comprising Russia’s Renova, which the company said could culminate in an offer for its Ezulwini mine $10-million greater than an existing bid.
TSX- and JSE-listed First Uranium said on April 2 it signed a binding agreement with Chinese-owned Gold One to dispose of the uranium and gold mine for $70-million.
First Uranium had struck preliminary deals to sell the Ezulwini mine, located west of Johannesburg, to Gold One and the Mine Waste Solutions operation to AngloGold Ashanti for $335-million in March.
The company entered the sales agreements after its having failed to meet production targets caused a liquidity crisis that is still plaguing the Johannesburg-based firm.
For example, the company has C$150-million in convertible notes due at the end of June, but said on April 19 it had only $6.7-million in cash reserves as at March 31.
Part of the Gold One deal involved a $10-million upfront loan, of which First Uranium said it had already accessed $5-million, adding that it would have to draw down the remaining amount to stay afloat.
First Uranium said in a statement the Renova offer, through its Transalloys unit, which also includes Waterpan Mining Corporation (WMC), was subject to a number of conditions, including a 90-day due diligence process.
WMC and Transalloys would then be in the position to make a formal bid by August 1, the company said.
The $80-million offer included a short-term bridge loan, but this would only be available after the due diligence period was over, noted First Uranium.
The company added that its board was yet to meet on the latest indicative bid for Ezulwini, which Bloomberg first reported on Friday.
In the meantime, a group of shareholders claiming to represent 17% of First Uranium’s stock has called the offers from Gold One and AngloGold Ashanti, which owns just less than one-fifth of the company, too low.
First Uranium CEO Deon van der Mescht did not respond to a call seeking comment.