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FUM - First Uranium Corporation - First Uranium Corporation updates the use of
proceeds from the proposed sale of Mine Waste Solutions and Ezulwini Gold Mines
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
FIRST URANIUM CORPORATION UPDATES THE USE OF PROCEEDS FROM THE PROPOSED SALE OF
MINE WASTE SOLUTIONS AND EZULWINI GOLD MINES
TORONTO AND JOHANNESBURG - June 6, 2012 - On March 2, 2012, First Uranium
Corporation (TSX: FIU) (JSE: FUM) (ISIN: CA33744R1029) ("FIU" or the "Company")
announced an agreement to sell Mine Waste Solutions and its subsidiaries ("MWS")
to AngloGold Ashanti Limited ("AGA") and an agreement to sell Ezulwini Gold Mine
and related assets ("Ezulwini") to Gold One International Limited ("Gold One")
(collectively, the "Transactions").
In that announcement and in a follow up news release dated April 19, 2012, the
Company provided an expected Pro Forma Use of Proceeds from the completion of
the Transactions and an update, as at April 19, 2012, with respect thereto.
Subsequently, the Company has continued to expend funds for sustaining capital
required for its operations and has experienced operating losses at the Ezulwini
operations and cash flow at the MWS operations has been negatively impacted by
underperformance due to clay handling issues. Consequently, the Company has
drawn down the US$10 million loan facility provided by Gold One under the terms
of that agreement and this amount plus interest is repayable in full upon the
earlier of the termination of the Gold One Agreement and the closing of the
transaction with Gold One. The negative impact of the operating losses on the
expected Pro Forma Use of Proceeds have been offset primarily by favourable
movements in spot foreign exchange rates, which are still subject to change upon
closing of the Transactions.
The Company has updated the expected Pro Forma Use of Proceeds provided in the
earlier announcements and replaced it with the following:
Pro Forma Use of Proceeds
Upon completion of the Transactions, the Company will receive an aggregate of
US$405 million in cash at closing of which US$30 million will be held in escrow
accounts. The Company now expects that it will make the following initial
payments(1) to security holders from the proceeds received on the closing of the
Transactions, after deducting approximately US$19 million in operating and
transaction related costs(2):
(in million of US$)
Notes $154.9
Debentures $140.7
(including interest from December 31, 2011 to March 2, 2012)
Gold One Loan $10.2
(including interest)
Shareholders $50.2
(represents approximately Cdn$0.22 per share)
(1) These amounts are approximate and subject to change due to, among other
things, currency fluctuations (conversion rates for the above dollar values
were based on the Bank of Canada noon rate as of June 4, 2012) and results
of operations.
(2) These amounts include, among other things, retention and severance
payments, payments owing to Vulisango (Proprietary) Limited (the Company`s
Black Empowerment Partner) upon termination of the Management Agreement
with Vulisango dated August 25, 2011, corporate costs to sustain the
Company to the end of the escrow period and payments to financial, legal
and other advisors.
The balance of the funds held in escrow will be disbursed following the
release of the escrow accounts. Assuming no claims are made, the amount
available for distribution will be US$30 million which the Company intends
to distribute as soon as legally permissible as follows:
(in million of US$)
Debentures $4.3
Shareholders $25.7
(represents approximately Cdn$0.11 per share)
Therefore, based on the above assumptions and calculations, as of the date
hereof, the Company anticipates that the total distribution to shareholders
could equal approximately Cdn$0.33 per share. These amounts are approximate and
remain subject to further change.
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 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.
www.firsturanium.com
For further information:
John Hick or Mary Batoff
(416) 306-3072
mary@firsturanium.ca
Date: 07/06/2012 07:50:02 Supplied by www.sharenet.co.za
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