Johannesburg - Simmers said on Monday that it has
requested the JSE to launch an investigation into a possible manipulation of trading
in its listed securities.
The company said in a statement on Monday that it has come to the attention of the
Simmers management that an unusual volume of Simmers securities has been traded over
the course of the last week. During this time the share price of the company has
experienced increasing downward pressure.
The request, on Sunday, to the JSE to launch an investigation was prompted by
Simmers management becoming aware of the existence of a statement which may possibly
constitute false, misleading or deceptive statements, promises and forecasts as
defined in section 76 of the Securities Services Act, 2004.
"This statement was seemingly distributed to certain shareholders and into the
market during the course of the last week ostensibly to solicit support from Simmers
shareholders to effect changes to the board and management at Simmers," it said.
The statement said "a body of concerned shareholders representing in excess of
25% of the issued share capital of the company object to the manner in which certain
of the executive directors conduct themselves in regard to its affairs."
"They have engaged our services in order to solicit support from shareholders to
effect changes to the board and management at Simmers."
Their primary complaints are that Gordon Miller, the CEO, has relocated to Canada
where he spends most of his time. Simmers operations are in South Africa and it is in
the interests of shareholders that the company's CEO be located close to its
operations.
"In line with best practice among CEOs of offshore listed mining companies with
their assets located in South Africa, Mr Miller is bucking the trend exemplified by
the CEO of Lonmin. In this regard, Mr Ian Farmer has undertaken to spend most of
his time in South Africa to be close to Lonmin's operations."
Wanted: Strong leadership
"Simmers assets require
close attention from a technical perspective on an ongoing basis and strong leadership
from its CEO. Mr Miller is also CEO of First Uranium which is no longer a subsidiary
of Simmers. Mr. Miller's declared emoluments are R9.283m which concerned
shareholders believe it to be excessive in the circumstances," the statement said.
"Simmers has sold down its investment in First Uranium from some 63% to 35%. In
doing so it has not only disposed of a valuable asset but it has potentially
jeopardised First Uranium's mining rights by diluting its effective black economic
empowerment shareholding."
"The company and First Uranium continue to incur cash losses and it is clear that
operations will need to be recapitalised over time. This will require additional
financing and cash flow drain on Simmers, who was recently been obliged to advance $20m to First Uranium. From recent reports it is clear that Simmers' operations are
not breaking even on a cash basis, despite a rand/gold price of approximately R250 000
per kg."
"The chairman of Simmers has objected to the appointment to the board of a well-
known and highly successful mining engineer who has been the CEO of a large listed gold
mining group in South Africa. It is estimated that this person could add huge value to
the board."
"It is estimated by the significant group of concerned shareholders that the
current executives have failed to deliver value and will act as an impediment to an
exciting opportunity for Simmers to play a role in the consolidation of the junior
gold mining industry going forward. The removal of Mr Miller from the board would
signal the start of a new era in the company. All of the above has resulted in value
destruction for shareholders which is represented by an ever declining Simmers share
price."
"Accordingly the group of concerned shareholders seek support of likeminded
shareholders for the purpose of effecting change to the Simmers board by voting
against the re-appointment of Messrs Jacobs and Miller to the board and against the
passing of all special resolutions save for the resolution granting share options to
non executive directors," the statement continued.
Simmers added that shareholders will be informed of the outcome of the
investigation and any further developments in due course.
- I-Net Bridge