Bid by First Uranium to sell assets to pay debt

First Uranium on Friday agreed to sell its Mine Waste Solutions, a tailings behavior operation, to AngloGold Ashanti for $335m in cash, and its stressed Ezulwini mine to Gold One for $70m in cash.If the deals do not go during First Uranium said it would have to issue 806-million shares representing 77% of its issued share capital to repay adaptable debentures falling due soon.

Various funding mechanisms put in place by First Uranium’s earlier management have proved to be onerous and have eventually crippled the company, bringing it to the point where it will no longer exist if both deals go through. One of these mechanisms incorporated selling part of its production to Franco Nevada for $400/oz against a gold price of $1711, meaning it was selling its gold at a huge loss.

First Uranium has struck a perfect agreement with AngloGold and there is a binding letter of agreement with Gold One. RBC Capital Markets has establish the AngloGold Ashanti offer fair and will deliver an opinion on the Gold One offer once that becomes definitive in a while this month.