• First Uranium (FIU) funding crisis – It’s no secret that the funding crisis experienced at FIU has sucked R464m out of Simmers and diluted the Simmers shareholding in FIU from 37% to 34.35%. Hopefully the funding crisis at FIU is now something of the past although the debt created in the process can expect to place further strain on the cash flows of both FIU and Simmers going forward. Simmers had a negative cash flow of R120m in the previous financial year despite a resilient gold price.  

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• Delayed benefits of Tau Lekoa Gold Mine acquisition – Simmers has not really benefitted from the acquisition of the Tau Lekoa Gold Mine in the 2010 financial year. In other words, more money flowed out than came in. However, the situation should be different this time around, given the fact that Simmers wants to conclude the Tau Lekoa acquisition as quickly as possible and expects to see positive cash flows to the tune of R150m resulting from it within the current financial year. This is achievable if one considers that Tau Lekoa has the capacity to almost double the annual gold production of Simmers.  

• R267m write off at Transvaal Gold Mining Estate Limited (TGME) – No less than R267m had to be written off at TGME a wholly-owned subsidiary of Simmers. This came as a nasty surprise to many shareholders of Simmers considering the fact that Simmers punted TGME extensively not so long ago. It seems that there’s after all not an awful lot of gold that’s going to come from TGME.  

In other words, given the above, it must be clear that an investment in Simmers is not for the faint-hearted. 

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