TORONTO AND JOHANNESBURG, June 5, 2012 /CNW/ - First Uranium Corporation
(TSX:FIU), (JSE:FUM) (ISIN:CA33744R1029) ("FIU" or the "Company") has
responded to press reports about Waterpan Mining Consortium Pty
(Waterpan) which stated on June 1, 2012 that it is attempting to raise
funds for a substantial offer to acquire 100% of the shares of FIU.
The Company, under its previously announced agreements with both
AngloGold Ashanti Limited and Gold One International Limited, has
undertaken to take all such steps necessary to put into effect the
proposed sales of its Ezulwini and Mine Waste Solutions assets.
Notwithstanding the commitment of FIU to the transactions, any party is
free to make a formal offer to the Company's shareholders to acquire
all or a portion of their shares.
While FIU as a public company, without a "poison pill" or shareholders
rights plan, is open to receiving offers to its shareholders, the
Company cautions against shareholders acting in response to
announcements that future offers will be made without the offeror
making an unconditional, fully financed formal offer on terms which are
not coercive or misleading.
The transactions with AngloGold Ashanti Limited and Gold One
International Limited are fully funded and almost all of the conditions
precedent to completion have been fulfilled. It is anticipated that,
if approved by shareholders, the transactions will be completed June
FIU notes the following:
Under its Canadian Note Indenture and its Rand Note Indenture, which
govern the Secured Convertible Notes due March 31, 2013, FIU must
commence within 30 days of the occurrence of a change of control, an
offer to purchase all of the outstanding Notes for 105% of the
principal amounts of Cdn $110 million and ZAR 418.6 million,
respectively, plus accrued and unpaid interest.
Under its Debenture Indenture, FIU must commence, within 30 days of the
occurrence of a change of control, an offer to purchase all of the
outstanding Debentures due June 30, 2012 at a purchase price equal to
100% of the principal amount of Cdn $150 million, plus accrued and
In order to finance the acquisition in cash of 50% or more of the common
shares of FIU, an offeror such as Waterpan would have to have
sufficient cash resources to: (i) repay the required amounts under each
of the Secured Convertible Notes, the Debentures and the $10 million
outstanding under the loan from Gold One International Limited, plus
interest on all of this debt, which the Company estimates will be in
excess of an aggregate of Cdn $340 million; (ii) severance costs
triggered by the change of control terms under employment agreements;
(iii) have sufficient working capital to continue the operations at
Mine Waste Solutions and Ezulwini (together with corporate costs); and
(iv) purchase the common shares together with related costs at a
premium to the amount provided under the proposed transactions. The
above may result in total aggregate REQUIRED funding in excess of $450
If the transactions with AngloGold Ashanti Limited and Gold One
International Limited are terminated there can be no assurances that
the Company could realize more than the aggregate of $405 million
payable under the existing agreements.
Under applicable securities laws, the time required for Waterpan to make
a formal bid now would likely extend beyond June 30, 2012 which would
result in a default under the terms of the Debentures and the Gold One
Loan, and would also trigger a default under other agreements,
including the indentures governing the Secured Convertible Notes.
Furthermore, if as a result of the termination of the asset sales, FIU
is insolvent, it may lose any rights granted in South Africa to carry
on its mining operations.
Shareholders and debtholders are reminded to vote their proxy FOR the
transactions and all related proposals before the proxy voting deadline
on Monday, June 11, 2012 at 5:00 p.m. (Toronto time).
If you have any questions about the information contained in the
management information circulars or require assistance with voting your
securities, please contact Kingsdale Shareholder Services Inc. by
telephone at 1-866-581-1571 toll-free in North America, or at
1-416-867-2272 outside of North America (collect calls accepted), or by
email at firstname.lastname@example.org.
About First Uranium Corporation
First Uranium Corporation operates the Ezulwini Mine, an underground
mining operation, and Mine Waste Solutions, a tailings recovery
facility. Both operations are situated in South Africa.
Cautionary Language Regarding Forward-Looking Information
This news release contains and refers to forward-looking information
based on current expectations. All other statements other than
statements of historical fact included in this release are
forward-looking statements (or forward-looking information). The
Company's plans involve various estimates and assumptions and its
business and operations are subject to various risks and uncertainties.
For more details on these estimates, assumptions, risks and
uncertainties, see the Company's most recent Annual Information Form
and most recent Management Discussion and Analysis on file with the
Canadian provincial securities regulatory authorities on SEDAR at
www.sedar.com. These forward-looking statements are made as of the date
hereof and there can be no assurance that such statements will prove to
be accurate, such statements are subject to significant risks and
uncertainties, and actual results and future events could differ
materially from those anticipated in such statements, including without
limitation, the statements regarding the proposed transactions with
Gold One International Limited and AngloGold Ashanti Limited.
Accordingly, readers should not place undue reliance on forward-looking
statements that are included herein, except in accordance with
applicable securities laws.
SOURCE First Uranium Corporation
For further information:
John Hick or Mary Batoff (416) 306‐3072 email@example.com