Simmers will keep majority stake in First Uranium, CEO Miller says
miningweekly.com
By: Matthew Hill
Published on 19th June 2008
Updated 2 hours 49 minutes ago
JSE-listed gold-miner Simmer & Jack Mines (Simmers) has "no intention" of unbundling its majority stake in soon-to-be uranium producer First Uranium, as the two companies make a good fit, CEO Gordon Miller said on Thursday.
He also reiterated that First Uranium was trading at a significant discount to its peers at similar development stages, but that it would likely change considerably once the company was into production.
Miller said that it was already producing gold, one year ahead of schedule, and that yellow cake production was on track to occur later this year.
"We have a complimentary structure that is working well for us at this point in time and there is no need to tinker with it, and management needs to focus on execution," he told media and analysts at a Simmers results presentation in Johannesburg.
"We have a management structure that compliments that as well," Miller added. "We certainly have no intention of separating First Uranium."
He also noted that spinning off First Uranium, which owns the Ezulwini gold and uranium operation near Randfontein, would require South African Reserve Bank approval, which was not currently in place.
STRESS
Miller said that geographical and mine-type diversification was also in First Uranium's strategy through acquisitions, after opportunities had emerged as a result of a downturn in the market.
"There are lots of opportunities for consolidation in the uranium space at this point in time, and we're studying them carefully," he stated.
"The market sees spot uranium as a reference price for valuation, and we've seen uranium valuations tumble dramatically, and certainly a lot of stress on the equity capital markets," he added.
The company was currently eyeing opportunities in Canada and the US.
Miller commented that uranium suppliers needed a diversity of supply if they wanted to secure long-term premium contracts with customers.
"Our strategy is to diversify not only our political risk, but it's also to diversify our mine supply, so we have a conscious development strategy in Canada," he stated. He had already relocated to Toronto, along with COO Jim Fisher.
Miller said that First Uranium would consider acquisitions if they were accretive in the long term. |
