Simigon Share Discussion Threads

[red ninja] 16/3/2006 18:36

Madness it may be, but Africa is not Europe is it.

Tribal identity is still strong in Africa and countries like South Africa are young since gaining independence from colonial domination.

Vulisango seems to own 51% of Jaganda which owns 44% of Simmers ie 22.5%.
However, some of the other shareholders in Jaganda may back them.

The problem seems to be ruling party or tribal or contacts between Vulisango and the regulatory authorities which is putting Simmers in a backmail type position.

As you say can't do SA or even Vulisango much good, but they are obviously not running on the same logic as we are.....

[red ninja] 16/3/2006 13:05

Bit more detail :-

Tempers Flare at Simmer & Jack

By Lindsay Williams
15 Mar 2006 at 10:32 AM EST


JOHANNESBURG (Business Day) -- Simmer & Jack [JSE:SIIF] is embroiled in a dispute with BEE partner Vulisango. Classic Business Day gets Simmer & Jack CEO Gordon Miller on the line to find out what's behind simmering tensions between the gold miner and empowerment partner.

LINDSAY WILLIAMS: Jaganda, which owns 44% of Simmer & Jack, is 51% held by empowerment shareholders Vulisango and 49% by a voting pool including some Simmer & Jack executives. Recently the shareholding group with 49% applied to liquidate Jaganda because of an "irretrievable breakdown" between the parties. In an affidavit supporting the application Simmer & Jack chief executive Gordon Miller attributed the breakdown to the "unreasonable behaviour and downright greediness" of Vulisango. Gordon, it's a very complicated situation - what's the background to the dispute?



GORDON MILLER: At the end of 2004 Simmer & Jack (Simmers) was doomed to failure. JCI [JSE:JCD] was an 86% shareholder at that point in time. The current executives devised a strategy to take Simmers out of JCI, and to raise cash to capitalise a loan account that has grown up over a number of years due to operating losses in Simmers, also to get an empowerment shareholder on top of that strategy. What did we do? We conducted a rights issue in Simmers, JCI renounced its rights in favour of Jaganda and minorities who put cash into the company. JCI then ceded its loan account claim - which at that point was about R94-million - to Jaganda. Jaganda then followed the rights - which means that Jaganda subscribed for 377-million new Simmers shares - and the subscription price was R94-million. Jaganda had the R94-million - being the loan account that JCI had ceded to it - and then Jaganda issued preference shares to JCI as payment for the loan account that JCI had ceded to them. So at the end of that Jaganda owned 377-million Simmers shares - if the Simmers share price went up the structure of the preference share is such that the bulk of the increase is trapped in Jaganda, and did not go to JCI. The ordinary shares in Jaganda therefore were potentially worth quite a lot - because its value was determined exponentially by the increase in the Simmers share price. Conversely, the ordinary shares in Jaganda have no risk whatsoever, because if the Simmers share price had collapsed then JCI - through its preference share in Jaganda - would be limited to the wreckage of the Simmers share price. However the Jaganda shareholder in that case would also have gained nothing, but neither would they have lost anything - because they effectively put nothing in. Having set up this structure we then searched for the right empowerment partners - regretfully I have to admit that we settled on Vulisango. Effectively from day one Vulisango wanted more - it's gone to this ridiculous position that Vulisango suggests that the preference share issued to JCI is invalid, and does not exist, that Jaganda must remain the encumbered owner of the 377-million Simmers shares which it bought with the R94-million loan account that JCI gave it in the first instance. The central point of the dispute between management and Vulisango is that Vulisango says: "Why doesn't Simmers withdraw its application for the rights to Number Four shaft?" Then Vulisango would go and apply for those rights - once they've received them they would sell those rights back to Simmers in exchange for new shares.

LINDSAY WILLIAMS: How can that work?

GORDON MILLER: Obviously the board said no, as one would expect them to do, and Vulisango then demanded that the Simmers board should simply issue it an additional 100-million Simmers shares for no consideration. Equally the board declined that preposterous request - so by now the relationship had degenerated into open warfare. Vulisango at that point then contended that Simmers' mining rights application was fatally flawed, and was not going to succeed. To support this allegation Vulisango went out on their own bat with an incomplete and outdated set of documents to obtain legal counsel as to Simmers' mining rights application. Based on that incomplete and outdated document counsel gave an inconsequential opinion. Simmers went out and obtained a proper opinion - based on full information - which clearly contradicted the allegations made by Vulisango.

LINDSAY WILLIAMS: The Department of Minerals and Energy (DME) - what's their view of this mining rights situation?

GORDON MILLER: We've been working very closely since May of 2005 with the regional manager in Gauteng responsible for processing of mining rights applications, and all of the elements that we need to comply with. We've been interacting and communicating on a regular basis to the point that in January 2006 he was satisfied that our application was compliant, and he then recommended it to the head office. For some reason it has got stalled there, and we presume it's being interfered with.

LINDSAY WILLIAMS: An article on well-known mining website Mining Max today says that the application had problems. DME Director General Sandile Nogxina was critical of the shareholder's agreement that he said eroded the rights of the empowerment partners. Have you spoken to this gentleman?

GORDON MILLER: Yes, we have. Before we set up the Simmers shareholder's structure in Jaganda we actually had Sandile vet the legal agreements that form the basis of the shareholder's agreement - indeed at that point in time early last year we actually amended the shareholder's agreement based on their input. I guess that things have now changed, and that relationship as contemplated has obviously degenerated and disintegrated completely - effectively that shareholder's agreement is the reason why the application has been lodged for the liquidation of that structure.

LINDSAY WILLIAMS: Vulisango says that without their participation Simmers will struggle to secure a mining licence - do you agree, and how do you counter that?

GORDON MILLER: We disagree entirely. We have other empowerment partners that are part of the Simmers structure at this point in time. From a legal standpoint Simmers is currently compliant, and Simmers will remain compliant with whatever changes occur in the future. We have a number of other independent black empowerment companies that have approached Simmers to take placements of shares for cash because they like the story - they want to get involved. As a result of that Simmers will remain compliant with the Minerals and Petroleum Resources Development Act (MPRDA).

LINDSAY WILLIAMS: Vulisango (Pty) Limited today expressed great grave concern at the lack of corporate governance, and the lack of understanding of BEE by the management of Simmer & Jack according to a press release which came out 4.45pm today. Vulisango goes on to say they seek urgent answers on the handling of the Jaganda preference share issue, the handling of the Aberdeen loans to Simmers, and management's handling of the August to September 2005 shares for cash - there's an awful lot of questions they want answered - have you seen this press release?

GORDON MILLER: No, I haven't. The issues in there are covered in my affidavit. Most of these have been raised on many occasions, and indeed they are raised by the chairman of Simmers in attempts to resolve them. Unfortunately allegations are made and no action is taken to deal with them - it's pretty unfortunate that it's ended up in this situation.

LINDSAY WILLIAMS: It's fairly unfortunate for shareholders and stock markets - the markets in general don't like uncertainty, they don't like squabbling - we've seen that particularly in the gold mining industry in the last year or so. How is it going to be resolved? Clearly the two or three parties can't work together - so what's next?

GORDON MILLER: Ultimately I guess it will come to a decision of the shareholders as to how to take things forward - it's vitally important for management to concentrate on the business, and that's what we're going to do. This dispute has caused a distraction - that's one of the reasons why the voting pool, the management group, applied for the liquidation. The dispute was resulting in a disruption of the board, the board was dysfunctional - from our perspective we as management need to get on with the business of adding value, and get away from these distractions.

LINDSAY WILLIAMS: I think everyone would agree on that, no matter what side of the fence they are standing on. "At a board meeting held today the directors of Jaganda (Pty) Limited approved a resolution to requisition the board of Simmers to convene a shareholder's meeting at which a number of issues relating to the corporate governance of Simmers will be raised, including the removal of certain Simmers executive directors." That statement was issued by Sovereignty Capital who are representing Vulisango - what do you say to that?

GORDON MILLER: I understand that's what they intend to do, but it may not turn out the way that they intend it to turn out.

LINDSAY WILLIAMS: Classic Business Day is going to speak to Vulisango and Sovereignty Capital on Wednesday.

[holdontightuk] 16/3/2006 11:40

Simmers shareholders to seek axing of CEO Miller
Rob Rose

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Classic Business Day Transcript: Tensions still simmering in saga



SHAREHOLDERS in gold miner Simmer & Jack (Simmers) have told the company's board they intend lobbying for the axing of CEO Gordon Miller and other directors, replacing them with a group including former Anglo Platinum CEO Barry Davison.

The split between the empowerment shareholders of Simmers has seen the share price of the gold miner see-saw in the past week, plunging 11,7% yesterday alone after some of the shareholders asked the JSE to suspend the share last week.

Simmers is 44%-owned by an empowerment company called Jaganda. The majority share-holder of Jaganda is a group called Vulisango, which wants Miller fired. Miller and other members of management hold the remaining shares in Jaganda.

They are trying to have Jaganda liquidated, saying relations within the company have "been destroyed irretriev-ably". Vulisango sent a letter to Simmers yesterday, saying the company must convene a general shareholders' meeting to vote on Miller's removal and a new empowerment structure within 35-days. Vulisango said it wanted Miller and Simmers' non- executive director JP Schumaker removed.

Davison and Vulisango CEO Valence Watson would then be made new nonexecutive directors, while Simmers director Graham Wanblad could take the CEO position as an interim step while a new CEO was found.

Miller has accused Vulisango of "downright greediness" and "unreasonable behaviour".

One of Vulisango's chief complaints is that Simmers misrepresented its empowerment status when it applied for mining rights over the number four shaft. It said this showed "poor corporate governance".

When Simmers applied for the mining rights it was 51% black owned but the black ownership dropped to 44% after new shares were issued.

Vulisango said that the change was not communicated to the minerals and energy department. A group of Simmers nonexecutive directors met the department's officials with regard to the dispute yesterday.

Kevin Wakeford, one of the nonexecutive directors, said the meeting was "productive and held in good faith".

[holdontightuk] 14/3/2006 11:00

No, I mean the whole BEE thing is nonsense.

[red ninja] 14/3/2006 09:21

I wouldn't say its nonsense as it is surely effecting the share price and is injecting a whole load of uncertainty into the control of Simmers.

Its true BEE partner Jaconda now hold around 44% of Simmers paper and thus do not have a controlling interest, but this battle may be impacting on regulatory approvals if some of the Jaconda shareholders have influence with the controlling political party.

[holdontightuk] 13/3/2006 19:49

Might just top-up my AAB actually.....all this political nonsense is creating bargains imo.

[red ninja] 13/3/2006 19:40

Presumably they mean 9th March and I've just had a cup of tea a well known Caffeine/Tanine stimulant.

[holdontightuk] 13/3/2006 19:36

The SA's really are stuffing themeselves in this current gold and commods bull run, arent they!

[mr ashley james] 13/3/2006 19:35

HOT,

Yes you are correct:-

Simmer And Jack Mines Limited (Incorporated in the Republic of South Africa) (Registration number 1924/007778/06) Share code: SIM ISIN: ZAE000006722 ("Simmers" or "the company") Statement by Independent Non-Executive Chairman of Simmers An article was published in Business Report on 9 April 2006 headed "Simmers faces suspension call".

[holdontightuk] 13/3/2006 19:32

Post 8 refers to a Business Article dated 9 April 2006 - can I have someone of what you are on please, if it helps you see into the future!

[red ninja] 13/3/2006 19:23

Market may also be reacting negatively to a slightly cryptic progress report on RANDFONTEIN 4 SHAFT mining rights application which deals with a delay to second quarter 2006 :-

SIMMER AND JACK MINES LIMITED (Incorporated in the Republic of South Africa) (Registration number: 1924/007778/06) Share code: SIM & ISIN: ZAE000006722 ("Simmers" or "the company") PROGRESS REPORT ON THE RANDFONTEIN 4 SHAFT ("4 SHAFT") MINING RIGHTS APPLICATION Shareholders are referred to the press release dated 7 February 2006 and published on SENS regarding, inter alia, the application for the mining rights to 4 Shaft submitted to the Department of Minerals and Energy ("DME") in May 2005, and are herewith updated as follows: * As already stated, the DME accepted the application in May 2005. As defined in the Mineral and Petroleum Resources Development Act 28/2002 ("MPRDA"), "acceptance" is a specific initial step in the overall process of the DME in dealing with any application and serves to indicate the prominent position of the applicant in relation to being granted the particular mining right. * Simmers has since concentrated on meeting the DME's further requirements, particularly those relating to environment, labour and social plans, as well as the disposal of underground water arising in the workings. * A further part of the normal application process relates to the DME being able to make requests for further information - this the DME has done and, in each case, Simmers has provided the required additional or updated information. * One such update involved providing the DME with Simmers' adjusted BEE shareholding position. At the time of the initial submission, Simmers' BEE shareholding was 51%. The rights issue and share placements since have reduced the BEE shareholding to approximately 44%. * The minimum BEE requirement for Simmers' 4 Shaft mining rights application is 26% in terms of the MPRDA. Having a BEE shareholding that has fallen below the level of 51% therefore in no way affects the "acceptability" of the application. * The DME has provided no indication of any other factor that may influence the status of the application negatively. * Although the DME process prescribes time lines, any request for information effectively suspends the countdown. Hence, the company's anticipated date for a final ruling from the DME has had to be delayed from February 2006 to a current expectation of the second quarter of 2006. * The company has received no information or indication to warrant a change to its stated public expectation that the mining rights to 4 Shaft will be granted to Simmers. Johannesburg 10 March 2006 SPONSOR SASFIN CAPITAL (A division of Sasfin Bank Ltd) Date: 10/03/2006 01:25:08 PM Produced by the JSE SENS Department

[red ninja] 13/3/2006 19:18

The market has been spooked by the dispute between Jaganda parties and ist impingement on Simmers :-

Simmer And Jack Mines Limited (Incorporated in the Republic of South Africa) (Registration number 1924/007778/06) Share code: SIM ISIN: ZAE000006722 ("Simmers" or "the company") Statement by Independent Non-Executive Chairman of Simmers An article was published in Business Report on 9 April 2006 headed "Simmers faces suspension call". It referred to a request for suspension of trade in Simmers shares made to the JSE Limited (JSE) by certain parties who have an indirect interest in Simmers through Simmers' controlling shareholder, Jaganda (Pty) Ltd. The purpose of this statement is to provide Simmers' shareholders with some background to the request in order to clarify the current position: As per the Cautionary Announcement published on SENS on 2 March 2006, there is a dispute between the shareholders of Jaganda, which has led to an application for the winding up of Jaganda. It is clear that the present request arises out of the dispute between the Jaganda shareholders. It is deeply regretted that certain of these shareholders have sought to involve Simmers in this dispute in a manner which is clearly destructive of value for all shareholders in the company. The request to the JSE was dated Friday 3 March 2006, the day following the cautionary announcement previously referred to. It requested an immediate suspension of trade in Simmers shares, making a number of allegations. Notice of the request was not given to the company which received a copy of the request from the JSE on Monday 6 March 2006. The company responded on Tuesday 7 March, giving reasons why an immediate suspension was not in order, and requesting a period of seven days within which to respond to the allegations. This request was acceded to by the JSE and the company is in the process of preparing this response. It is regrettable that the substance of the application to suspend the shares has entered the public domain before it could be properly addressed by either the company or the JSE. However, since this has now happened the public should be made aware that the application was made by a single shareholder grouping without notice to the board of directors, and despite the fact that most if not all the issues that form the basis for the application for suspension were extensively discussed at a board meeting two days before the application was lodged. In the meantime, proper responses to those issues will be communicated by the company to the JSE within the stipulated seven-day period. Shareholders should therefore continue to exercise caution in their dealings until these matters have been resolved and the relevant information has been properly disseminated to them. Nigel Brunette Chairman 09 March 2006 Sponsor Sasfin Capital (a division of Sasfin Bank Limited) Date: 09/03/2006 05:36:07 PM Produced by the JSE SENS Department

[hampster] 13/3/2006 04:40

Thanks AJ.

(again!!)

[mr ashley james] 13/3/2006 04:31

Hampster,

Easy set up thread on stock, watch and expect short selling to get into discounted shareprice wait for short interest ie guaranteed buying interest on share, buy, wait for shorts to buy to cover.

Not very complicated bluntly.

Night

Cheers

Ash:)

[hampster] 13/3/2006 04:10

"Time will tell I guess"

As always.

Indeed.

[mr ashley james] 13/3/2006 04:03

Hampster,

Yes well I think next move is possibly going to be to R3.847 this year, it went from R0.294 to R2.49 in 2005.

Buying relative strength seems an intelligent move.

Time will tell I guess.

All IMHO, NAG, DYOR etc

Cheers

Ash:)

[hampster] 13/3/2006 03:57

Nice chart Ash!

[mr ashley james] 05/3/2006 23:37

Just one reason more to be bullish on the Rand Gold Price in 2006 and beyond (Rand Gold Chart Break out of R3,500)!







SA gold production lowest since 1923
By: Gareth Tredway
Posted: '03-MAR-06 16:00' GMT © Mineweb 1997-2004



JOHANNESBURG (Mineweb.com) -- South Africa's gold production in 2005, was its lowest since 1923, at 296.3 tons, according to a statement from South Africa's Chamber of Mines released on Friday.

In 2004, 342 tons were produced.

The experts, after a strong rand forced restructuring and closure of a number of gold mines expected a figure near the 300-ton mark. In the fourth quarter of the year 74.1 tons were produced.

"The good news was that on a quarter-on-quarter basis the December quarter's gold production increased by 2.4% as the better economic environment and less work place disruptions enabled mining companies to increase output," said the Chamber in the statement.

The Chamber says that the higher average production cost of R89,130/kg compared to R85,200/kg in 2004, was reflective of the large restructuring costs that the industry had to make to right size various operations.

Harmony Gold, the third largest producer of South African gold, fired as many as 13,000 workers in its restructuring exercise that began in April 2004.

In the fourth quarter average total production costs came in at R88,544/kg according to the chamber.

The Chamber says that such a large drop off in production will not be repeated in 2006. "The large decline is expected to be a once-off aberration when compared to the average 5% rate of decline per year over the prior decade."

Higher gold prices and the re-opening of some new shafts will brighten the prospects for the industry, but the chamber says it still expects a decline in production, but at a "more moderate pace."

For the first two months of 2006, the gold price has averaged above R108,000/kg, compared to R85,262/kg and R96,545/kg in the first and second half of last year respectively.

[mr ashley james] 02/2/2006 21:41

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