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FUM - First Uranium Corporation - First Uranium Responds to Olma Investments:
Asset Sales in Best Interest of Stakeholders
First Uranium Corporation
(Continued under the laws of British Columbia, Canada)
(Registration number C0777384)
(South African registration number 2007/009016/10)
Share code: FUM ISIN: CA33744R1029
May 23, 2012
First Uranium Responds to Olma Investments: Asset Sales in Best Interest of
Stakeholders
All amounts are in US dollars unless otherwise noted.
Toronto and Johannesburg - First Uranium Corporation (TSX:FIU), (JSE:FUM)
(ISIN:CA33744R1029) ("First Uranium" or "the Company") responded today to recent
media comments attributable to Olma Investments ("Olma") which suggest that Olma
will vote against the sale of the Company`s two main assets. Today, the Company
has initiated a mailing to its shareholders responding to certain public
statements made by Olma. A copy of the letter is attached to this release.
As set out in management information circulars issued by the Company in
connection with special meetings to be held on June 13, 2012, the proposed
transactions "are the result of an active, extensive and public process to
assess the Company`s available strategic alternatives and represent the most
attractive proposal for its shareholders and debtholders". Copies of the
management information circulars have been filed and are available on the
Company`s website at www.firsturanium.com and on SEDAR at www.sedar.com.
In the absence of any other suitable transaction or credible offer, the
Company`s Board of Directors (the "Board") has approved the sale of its
subsidiary company holding, Mine Waste Solutions operations ("MWS") to AngloGold
Ashanti Limited ("AngloGold") and its subsidiary company holding Ezulwini Mine
("Ezulwini") to Gold One International Limited ("Gold One") for $335 and $70
million, respectively.
The management information circulars explain the exhaustive process undertaken
by the Board in order to secure the highest possible price for each of MWS and
Ezulwini. The Company contacted approximately 20 potential buyers globally and
only AngloGold and Gold One emerged as bona fide bidders. No other credible
offer has been received since the announcement of the two transactions.
John Hick, the Company`s lead independent director, said that the Board had
approved the two transactions because they were "the best option for
shareholders with the most certainty to close." Among other considerations, Mr.
Hick said, RBC Capital Markets had concluded the fairness of the proposed
transactions, from a financial point of view, to the Company and the Board
concluded that they were in the best interests of all of the Company`s
shareholders and debtholders. In addition, the Company obtained an independent
formal valuation of the AngloGold transaction as required under securities laws
for related party transactions. Paradigm Capital Inc., an independent
investment banking firm, prepared this valuation and concluded that the fair
market value of FUSA is in the range of $229 million to $352 million and the
AngloGold transaction is fair, from a financial point of view to Shareholders,
other than AngloGold.
Mr. Hick rejected Olma`s claims that the Company would be better served filing
for bankruptcy protection than accepting the AngloGold and Gold One
transactions. Under such a scenario, it is expected that the shareholders would
receive no recovery. There is no better alternative available and the Company
faces significant liquidity constraints with impending debt maturities on June
30, 2012 and March 31, 2013. The Company has previously disclosed the challenges
facing its two operations, including significant requirements to fund those
operations.
By contrast, the AngloGold and Gold One transactions afford several benefits to
the Company`s stakeholders. First, the transactions provide shareholders with
certainty and immediate value, without the significant dilution that would be
required to satisfy the obligations owed to the Company`s debenture holders and
without the financing risks associated with the continuation of the Company`s
business plan. Second, completion of both transactions will enable the Company
to satisfy all of the outstanding indebtedness owed to its debtholders as set
out in the circulars. Lastly, if the transactions are not approved, the Company
and its South African subsidiaries may not be able to comply with certain South
African mining and minerals legislation, which jeopardizes the Company`s mining
permits and may ultimately cause material breaches of certain contracts and
therefore materially impact the recovery of stakeholders and the ability of the
Company to continue as a going concern.
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 contactus@kingsdaleshareholder.com.
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.
For further information, please contact:
John Hick or Mary Batoff
(416) 306_]3072
mary@firsturanium.ca
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.
www.firsturanium.com
Sponsor: Investec Bank Limited
Date: 24/05/2012 11:11:01 Supplied by www.sharenet.co.za
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