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First Uranium Corporation
(Continued under the laws of Ontario, Canada)
(Registration number 2082276)
(South African registration number 2007/009016/10)
Share code: FUU ISIN: CA33744R5087
NEWS RELEASE August 2, 2012
First Uranium announces the Sale of its Ezulwini Mine to Gold One International
Limited, Changes to its Management and Board of Directors and Initial Distributions to
Debentureholders and Shareholders
All amounts are in US dollars unless otherwise noted.
Toronto and Johannesburg First Uranium Corporation (TSX:FIU.UN), (JSE:FUU)
(ISIN:CA33744 R5087) (First Uranium or the Corporation) today announced that the
Implementation Date for the sale of its Ezulwini Mine to Gold One International Limited
(Gold One), as defined in the Gold One Agreement (as defined below), occurred on
August 1, 2012.
The Corporation had entered into a definitive agreement (the Gold One Agreement) for
the sale of First Uranium Limited (FUL), a wholly-owned subsidiary of the Corporation
which owns all of the shares of Ezulwini Mining Company (Proprietary) Limited to Gold
One for $70 million in cash (the Gold One Transaction).
On August 1, 2012, the law firm of Edward Nathan Sonnenbergs, the Closing Document
Stakeholder, released from escrow the closing documents for the Gold One Transaction,
and Computershare Trust Company of Canada (CTCC), the Purchase Price Stakeholder,
paid $65 million to First Uranium. The remaining $5 million (the Deferred Payment)
will be held by CTCC as escrow agent in respect of the Deferred Payment pursuant to
the Gold One Agreement for a period of six months (the Escrow Period) ending on
February 1, 2012. At the end of the Escrow Period, the Deferred Payment, less any
claims made and payable in accordance with the Gold One Agreement, if any, will be
paid to First Uranium.
Changes to Management and Listing on the NEX
Upon the successful conclusion of both the Gold One Transaction and the sale of Mine
Waste Solutions to AngloGold Ashanti (the AngloGold Transaction and together the
Transactions), both the senior management team and the board of directors of the
Corporation have been reduced in size. In order to ensure distributions to shareholders
are made on a tax efficient basis, the Corporation must remain a public corporation as
defined by the Income Tax Act (Canada) and remain listed on a recognized stock
exchange. Consequently, the Corporation must continue to comply with applicable
securities laws and stock exchange rules, including having a sufficient number of
independent directors to constitute an audit committee and a Chief Executive Officer
(CEO) and Chief Financial Officer (CFO).
Effective August 3, 2012, in accordance with their existing contracts, the employment of
all senior management will be terminated. Mary Batoff, formerly Vice President, Legal
and Secretary, will be appointed President & CEO, and Emma Oosthuizen will be
appointed CFO. Directors Thabo Mosololi, Deon van der Mescht, Kevin Wakeford and
Graham Wanblad have resigned effective immediately, and Hugh Cameron, Normand
Champigny, John Hick and Peter Surgey will continue to serve as directors.
With the implementation of the Transactions, the Corporation has effected a change of
business according to the rules of the Toronto Stock Exchange (the TSX) and as a result
of such change in business, the Corporation is required to meet the original listing
requirements of the TSX in order to remain listed. As it is clear that the Corporation
would no longer meet the original listing requirements, it has decided to voluntarily
delist from the TSX; however, to maintain liquidity in the Units and the Debentures (each
as defined below) it will apply for listing on the NEX Exchange, a separate board of the
TSX Venture Exchange that provides a trading forum for listed companies that have low
levels of business activity or have ceased to carry on an active business, or an alternative
exchange in Canada.
The Corporation believes that it meets the minimum listing requirements of the NEX and
that there will be an orderly transition from the TSX to the NEX so that there will be no
interruption in trading.
Peter Surgey, chairman of First Uranium said: I would like to thank the board and
management for their support and commitment during this process, and given the
difficult circumstances, for the diligent and professional manner in which these
transactions were concluded.
Initial Distribution to Debentureholders and Shareholders
As required by the trust indenture dated May 3, 2007, between the Corporation and
CTCC, as Indenture Trustee, as amended by a supplemental indenture (the
Supplemental Indenture) dated June 14, 2012, for the 4.25% unsecured convertible
debentures (the Debentures) (TSX: FIU.DB; ISIN: CA33744RAA01 and US33744RAB87),
the Corporation will, on August 13, 2012, pay to CTCC, in its capacity as Indenture
Trustee for distribution to holder of Debentures, 95% of the principal amount of the
Debentures owing as of April 30, 2012 together with the unpaid interest on 100% of the
principal amount the Debentures accruing from December 31, 2011 to March 2, 2012
(inclusive)(together the 95% Payment Amount).
In addition to the 95% Payment Amount, the Corporation will also pay to CTCC, in its
capacity as Indenture Trustee, 2% of the principal amount of the Debentures owing as of
April 30, 2012, for distribution on a pro rata basis to those Debentureholders who
agreed on or before May 30, 2012, to vote in favour of the extraordinary resolution to
approve the Supplemental Indenture.
Following the closing of the AngloGold Transaction, from the proceeds of sale,
US$160,538,875 was converted to sufficient Canadian dollar and Rand to repay the
Cdn$110,000,000 principal amount of the 7% secured convertible notes and the
ZAR418,605,000 principal amount of the 11% secured convertible notes. The Notes were
redeemed in full on July 31, 2012. The $10,000,000 loan facility provided by Gold One
was also repaid, together with interest of $220,642.47 on July 20, 2012.
Following the payment of amounts to holders of the Debentures, described above, and
other expenses and obligations of the Corporation, the Corporation expects that the
initial distribution to holder of the units (the Units) of the Corporation (each Unit
comprised of 100 Class A Special Shares and 1 Class B Common Share) will be no less
than approximately Cdn$0.125 per Unit.
The lower estimate, compared to the estimate as of June 6, 2012, is due substantially to
changes in the Cdn/USD and ZAR/USD exchange rates as well as lower than expected
gold prices and production from the operations.
In order to protect against erosion in the Cdn distribution as a result of adverse changes
in the Cdn/USD exchange rate, the Corporation has entered into a participating forward
contract with a Schedule I Canadian Bank in respect of US$179.5 million at a floor price
Cdn/USD rate of 0.9968 with the right to participate in 50% of any favorable difference
between the spot price at expiration on August 10, 2012 and the floor price.
For further information:
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
Corporation'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 Corporation'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. No
assurance can be given that the Corporation will meet the listing requirements for an
alternate listing on NEX or an alternative exchange in Canada. In the event the securities
of the Corporation are not listed on TSX, NEX or an alternative exchange, there will be no
public market through which the securities may be sold and traded and Shareholders
may not be able to dispose of their securities. This can be expected to affect the liquidity
of the Units and the transparency and availability of trading prices. 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
Date: 02/08/2012 04:30:00 Supplied by www.sharenet.co.za
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