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Simmer & Jack loss widens

Johannesburg - Simmer and Jack Mines [JSE:SIM], the gold and uranium firm which is now a cash company, on Thursday reported the widening of its full-year loss after the disposal of assets to Village Main Reef Gold Mining Company [JSE:VIL].

The company posted a total comprehensive loss of R2.4bn for the 15 months to end-June compared to R736.4m for the 12 months to end-March 2010.

Simmers has changed its year-end from March to June, hence the 15-month financial year.

The results have also been prepared on a liquidation basis since the merger between Simmers and Village has been successfully concluded.

Chief financial officer Marius Saaiman said the massive loss was primarily due to the company's investment in listed uranium producer First Uranium (FUM).

Saaiman said the company was required to account for the asset at fair value less costs to sell while it had in previous years been carried at its value in use basis.

With the First Uranium share price tanking from about R9.30 to about R4.50 in 12 months and recently to R2.15, the market value of the company has been reduced substantially.

Simmers successfully concluded the disposal of the majority of its assets to Village Main Reef in late June 2011.

In exchange the company received Village shares which were distributed to Simmers shareholders, resulting in Simmers shareholders holding about 66% of Village.

Simmers' comprehensive income statement reflects a loss on disposal of the majority of the Simmers assets to Village of R407.6m.

The company's only remaining assets are R20m in cash and a discontinued operation in the form of Transvaal Gold Mining Estates Limited (TGME).

TGME's disposal remains subject to the fulfilment of certain conditions, in particular the conversion of mineral rights.

Saaiman said the company was now considering whether it would return the cash to shareholders. But he said it was weighing its options.
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