PRICE TO BENEFIT FROM MID-TIER STATUS
JUNIOR GOLD MINER Simmer & Jack Mines is on track to becoming a mid-tier producer after acquiring the companytransforming Tau Lekoa gold mine asset earlier this year. Once Tau Lekoa contributes its estimated production of 150 000oz/ year, Simmers will be considered a mid-tier producer. It currently produces 180 000oz/year and will become a mid-tier producer once in breaks the 200 000oz/year mark.
That’s a production target not many listed miners find themselves in, says Simmers CEO Gordon Miller. “Our strategy is to fill the void between junior and major gold producers that’s developed over many years.” Miller says that makes Simmers a much more attractive investment vehicle.
Tau Lekoa was acquired in February 2009 from AngloGold Ashanti for R600m, of which R150m can be offset by un-hedged free cash flow generated by Tau Lekoa this year, in accordance with the sale agreement. Simmers financed the remaining portion of the acquisition by selling its controlling shares in First Uranium.
Simmers has provided the financial guarantee required by AngloGold and an integration committee to facilitate the integration of Tau Lekoa into its flagship Buffelsfontein gold mine in Johannesburg.