Press announcement 6th December 2010
Village and Simmers reach agreement to merge and create a diversified mining company
- Exposure to gold, uranium, antimony and high-grade platinum group metals project - Highly-experienced and focused management team that will drive operational efficiencies and implement a robust growth strategy - 19.8 million ounce equivalent in gold resource and 80.5 million pounds in uranium resource
Village Main Reef ("Village") and Simmer and Jack ("Simmers") today announced that the companies have entered into an agreement in respect of a proposed merger, resulting in the creation of an exciting new diversified mining company that will operate in the gold, platinum group metals ("PGMs"), uranium and antinomy sectors.


The proposed merger, which remains subject to various conditions precedent, will be implemented through the acquisition, by Village, of 100% of Simmers assets including Buffelsfontein, Hartebeestfontein and Tau Lekoa.

The company will also acquire an approximate 33% of the issued share capital of First Uranium ("FIU"), currently owned by Simmers, as well as approximately 392 874 South African Rand denominated secured convertible notes issued by Mine Waste Solutions, which is FIUs surface treatment operation.

The notes currently have a face value of R1000 per note and are convertible into some 36.6 million ordinary shares in FIU at the option of the holder.

Simmers shareholding will subsequently be unbundled to its shareholders.


The total purchase price of approximately R1.3 billion is to be settled though an issue of some 598 million Village shares at a price of R2.20 per Village share and the assumption of certain liabilities.

Simmers will be obliged to unbundle the subscription shares to its shareholders as soon as possible thereafter.

This price implies an exchange ratio based on a value of R1.05 per Simmers share, which represents a premium of 14.7% to the volume weighted average price at which a Simmers share traded on the JSE for the 30 days preceding the date of this announcement.

The acquisition represents a category 1 transaction under the JSE Listing Requirements and in effect is a reverse takeover of the Simmers assets.


The potential transaction is in line with Villages stated strategy to create cash generative and growth-focused, socially responsible mining entities and as a result, the merger will:
- Create a diversified mining company with strong exposures to gold, PGMs, uranium and antimony; - Introduce a combined and experienced management team capable of extracting efficiencies from all operations and implement a focused growth strategy; - Reinforce the new companys growth strategy with the integration of the cash generative Tau Lekoa mine and access to the adjacent Mine Waste Solutions tailings recovery operation; - Create an additional foot hold into the uranium sector; and - Represent Villages third transaction, which positions it to play a leading role in the consolidation of the mid-tier mining sector in South Africa.
CEO of Village, Bernard Swanepoel commented, "Both Simmers and our board are in agreement that it is in our mutual interest to consolidate our respective mining interests into a single company.

Village is the most appropriate company to house this portfolio of assets, which creates a perfect value add opportunity for both Village and Simmers shareholders.

This transaction positions the new entity with an attractive diversified portfolio of assets that are currently generating strong cash flows, and that have both organic and brownfields growth prospects".


CFO of Simmers, Marius Saaiman, noted, "The merged entity will have improved access to capital markets for funding of its future growth".
Should this proposed transaction take place, Simmers, and ultimately Simmers shareholders, will acquire approximately 66% of the issued shares of Village, which will result in a reverse take-over of Village in terms of the JSE Listings Requirements.

Simmers and Village will therefore be required to issue circulars complying, where applicable, with the JSE Listings Requirements and SRP Code
Pending further announcements, shareholders are advised to exercise caution in dealing in their respective shares.
ENDS
Please see the SENS announcement to view conditions precedent and further detailed legal aspects of the transaction at www.villagemainreef.com
Contacts:
.

Village CEO, Bernard Swanepoel, ; 083 303 9922 .

Simmers CFO, Marius Saaiman, ; 082 458 3420 .

Vestor, Media and Investor Relations, Louise Brugman, ; 083 504 1186
Logo_sharper02 media & investor relations
louise brugman managing director T: +27 (0) 11 787 3015 C: +27 (0) 83 504 1186 E: www.vestor.co.za