June 11 (Bloomberg) -- First Uranium Corp. rose to the highest level in more than three months after South African investor Mandla Kumalo offered to buy a stake, blocking the sale of the Ezulwini mine to Gold One International Ltd.
The stock increased 2.2 percent to 1.42 rand by the 5 p.m. close in Johannesburg, the strongest level on a closing basis since Feb. 24. Kumvest (Pty) Ltd., Kumalo’s wholly-owned investment company, offered to buy a 26 percent stake at 37 Canadian cents per share, almost double First Uranium’s closing share price in Toronto on June 8.
The offer is conditional on a vote against the sale of the group’s gold and uranium mine, the appointment of a new management team and access to the company’s records to perform a due diligence study, First Uranium said in a statement today. New management will be given 90 days to present a turnaround plan.
“The proposed offer looks too conditional,” Edward Sterck, an analyst at BMO Capital Markets, said in an e-mailed response to questions. “I suspect the board of First Uranium will not approve it.”
First Uranium has plunged 98 percent in the past five years after uranium prices dropped and South African operations faced delays. The Toronto-based company is selling assets for $405 million to help pay off debt, including about C$150 million ($146 million) due June 30.
The firm has scheduled a June 13 shareholder vote on its asset sales.
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