JOHANNESBURG (miningweekly.com) – Gold and uranium miner Simmer & Jack Mines (Simmers) has furnished the financial guarantee required by gold major AngloGold Ashanti for the acquisition of the Tau Lekoa mine, as well as the Weltevreden and Goedgenoeg properties.

The Tau Lekoa mine would be integrated into the Buffelsfontein gold mine.

The R600-million required to purchase the mine was raised through an offering of 19,6-million common shares of uranium producer First Uranium, in which Simmers held a stake, at a price of C$4,60 a share for an overall gross proceed of C$90,16-million.

Simmers CEO Gordon Miller said that the purchase of Tau Lekoa was a strategic acquisition aimed at strengthening and growing Simmers’ gold operations, and that the sale of a portion of its holding in First Uranium, had been an effective method of financing the acquisition during the difficult economic times.

Additionally, Simmers has granted the underwriters of the deal an over-allotment option, which would expire in April, to purchase up to 2,94-million additional shares, at the same terms to cover over-allotments, as well as for market stabilisation purposes.

Miller stated that other than the outstanding over-allotment offer, which might or might not be exercised, Simmers had no intention of further selling down its stake in First Uranium, beyond what it currently held.

“We expect the market to rerate First Uranium once it graduates from a mine developer to a fully-fledged gold and uranium producer, and Simmers would like to benefit from this to the fullest extent possible.”

Should the over-allotment option on the offering be exercised, it would raise further gross proceeds of C$13,5-milion for Simmers, and reduce its ownership level in First Uranium from 41% to 39%.

The company’s percentage holding in First Uranium would also be affected from time to time by the exercise of the common share purchase warrants issued by First Uranium on February 11, 2009, in connection with a private placement.

An aggregate of 10,25-million warrants were issued by First Uranium and each warrant was exercisable for one common share, at a purchase price of C$4,15, until February 11, 2011.

Simmers stated that assuming the entire over-allotment option and all of the warrants were exercised, Simmers’ holding in First Uranium would reduce to 37%.

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