Simmer & Jack, Village Main Agree to Combine in $188 Million Transaction
Village Main Reef Gold Mining Co., headed by former Harmony Gold Mining Ltd. Chief Executive Officer Bernard Swanepoel, agreed to buy Simmer & Jack Mines Ltd. in a transaction worth 1.3 billion rand ($188 million).
The deal offers “significant gold production and exposure to uranium,” said Swanepoel, CEO of Johannesburg-based Village.
South African gold producers have been seeking to boost output to benefit from record prices. Simmers, which owns the Buffelsfontein, Hartebeestfontein and Tau Lekoa gold mines, reported output of 36,608 ounces in the three months through September, double the previous quarter, it said on Nov. 22. Simmers also owns a 33 percent stake in First Uranium Corp.
The main focus will be establishing the merged company as a “mid-tier gold company,” Swanepoel said today by mobile phone.
The agreed price represents a premium of 14.7 percent to the volume weighted average price at which Simmers traded for the 30 days preceding the date of the announcement, the companies said in a joint statement.
Harmony grew almost sixfold under Swanepoel, from a single- mine operator in 1995 to Africa’s third-biggest gold producer. He quit in Aug. 2007 after a miscalculation of production costs.
Simmer climbed 2 percent to 1 rand by the 5 p.m. close of trading in Johannesburg, valuing the company at 1.25 billion rand. Village advanced 4.4 percent to 2.40 rand.
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