All amounts are in US dollars unless otherwise noted.
TORONTO AND JOHANNESBURG, May 29, 2012 /CNW/ - Institutional Shareholder Services (ISS), a leading proxy advisory firm, recommended today that shareholders of First Uranium Corporation (TSX:FIU), (JSE:FUM) (ISIN:CA33744R1029) support two asset sales approved by First Uranium's board of directors.
The ISS report concludes that "the proposed transactions…offer relatively certain value which is substantially higher than the current market value of the company's shares".
After an exhaustive process, First Uranium's board of directors recently approved the sale, through two subsidiary holding companies, of its Mine Waste Solutions operation, and the Ezulwini mine, to AngloGold Ashanti Ltd. and Gold One International Ltd. for $335 million and $70 million respectively. Both operations are located in South Africa.
First Uranium shareholders are due to consider the proposed transactions at a special meeting on June 13, 2012.
John Hick, First Uranium's lead independent director, said, "We are delighted that ISS' very thorough review of the facts supports the board's recommendation to our shareholders."
The ISS report notes: "Given the lengthy, public process by which the board arrived at both these agreements, moreover, the probability of another credible offer - for either business - emerging now at a meaningfully higher valuation appears thin."
The report also casts doubt on the feasibility of alternative courses of action proposed by some shareholders. "Voting down the transactions…substantially increases execution and financial risk without visibly increasing the potential return to shareholders", ISS concludes.
Furthermore, its analysis was to "assess not whether the current offers can make up what was lost, but whether they offer more value than the next best alternative" and warns that "a trip through the bankruptcy process…raises a fresh set of horrors not only because the bankruptcy process is designed to protect debt holders rather than shareholders, but because the key physical assets are not located where Canadian courts have jurisdiction, and might be treated substantially differently by South African courts, ministers and regulators with different constituencies and priorities".
The Board unanimously recommends that shareholders and debtholders vote FOR the transactions.
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 (TSX:FIU, JSE:FUM) operates the Ezulwini Mine, an underground mining operation, and Mine Waste Solutions (MWS), 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.
For further information:
John Hick or Mary Batoff