Johannesburg, South Africa — MININGREVIEW.COM — 07 December 2010 – South African junior miners Simmer & Jack Mines and Village Reef have announced that they intend merging to create an exciting new diversified mining company that will operate in the gold, platinum group metals, uranium and antinomy sectors.
The companies said in a statement issued here that Village would buy the majority of Simmers’ assets by issuing R1.3 billion worth of shares to Simmers. Simmers would then hold a majority stake in Village, which it would spin off to its own shareholders.
“The proposed transaction is in line with Village’s stated objective to build greater mass to transform Village into a company with a diversified portfolio of self-sustaining mining companies,” the statement added.
Village said it would issue 597.5 million shares at R2.20 each to buy the majority of Simmers’ assets.
These include S & J Investments, a wholly-owned subsidiary of Simmers that houses the Buffelsfontein, Hartebeesfontein and Tau Lekoa mines; a 33% stake in First Uranium; and some convertible notes.
The companies said the Simmers’ board had unanimously supported the deal. “The merged entity will have better access to capital markets to fund future growth, and the assets will be managed by an experienced management team,” they added.
The companies went on to say that the merger would result in them holding a combination of platinum and gold assets, together with an exposure to uranium via the stake in First Uranium.
Shares in Simmers closed up 2.04% at R1 shortly after the announcement, while those in Village closed 4.35% higher at R2.40.