JOHANNESBURG (miningweekly.com) – TSX- and JSE-listed First Uranium on Friday announced that it had entered into a heads of agreement to raise up to C$150-million in a private placement and that Deon van der Mescht would become the interim CEO.

Van der Mescht is currently the CEO of First Uranium shareholder Simmer and Jack Mines (Simmers) and would take over from Gordon Miller.

Van der Mescht would resign from the Simmers board, said Simmers chairperson Vusi Khanyile in a statement.

First Uranium reported it had agreed a private placement offering of between C$125-million and C$150-million in senior secured convertible notes due in March 2013, as part of its recapitalisation plans.

The funding would be used for the uranium miner’s Mine Waste Solutions (MWS) tailings recovery project, capital expenditures including completion of the first gold module and uranium plant, new tailings facility, the third gold plant module, restructuring, financing and interest expenses and for general corporate purposes.

Simmers would purchase C$40-million of the notes in rand denominated notes, while Gold Wheaton would buy C$20-million of the notes in Canadian dollar denominated notes.

Between C$65-million and C$110-million of notes would be offered to accredited investors of RBC Capital Markets, also in Canadian dollar denominated notes.

Each Canadian dollar denominated note would have a principal amount of C$1 000 and would be convertible into 769,2 First Uranium shares. The rand denominated notes would have a principal amount of R1 000 and would be convertible into 107,4 First Uranium shares.

Simmers had agreed to exchange its C$22,1-million loan to First Uranium for an equivalent value in rand denominated notes.

Further, Gold Wheaton has also agreed to settle part of a $42-million completion penalty associated with its gold streaming agreements with First Uranium.

A penalty would be payable if a third gold plant module was not constructed and if technical completion tests were not concluded before September 1, 2011.

If the construction and tests were not concluded by September next year, First Uranium would have to pay Gold Wheaton $1,5-million at the beginning of each month between September and December until the construction and tests were completed.

However, if this could still not be completed by December 2011, a $30-million penalty would be payable.

In February, the uranium miner announced that it was facing “significant challenges” in terms of its funding requirements for current and future financial commitments.

At the time, it said that it would require between $50-million and $100-million in funding.

After announcing that it would support First Uranium’s recapitalisation, Simmers’ share price rose 8,06% to R1,34 a share at 16:39 on the JSE, compared with Thursday’s close of R1,24 a share.

However, First Uranium’s JSE share price fell by 0,26% to R11,30 a share at 16:40, compared with Thursday’s close of R11,33.

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