First Uranium's (TSE:FIU) plan to sell some of its South African assets was thrown into further disarray after Kumvest (Pty) Ltd. offered to buy 26% of First Uranium's shares in order to block the sale.
First Uranium is selling its Ezulwini Mine, an underground gold and uranium mining operation, and Mine Waste Solutions, a tailings recovery facility, to AngloGold Ashanti Limited and Gold One International Ltd. Both operations are situated in South Africa. If the entire asset sales goes ahead, First Uranium will receive $405 million in cash.
Kumvest wants both asset sales scuppered and is willing to buy 26% of First Uranium's shares at 37 cents to stop the company's plans. Kumvest also wants the board and management team at First Uranium to be replaced.
Kumvest says it has the support of 20% of the shareholders. Kuvest's signators include Eric Sprott representing Sprott Asset Management, Olma Investment Group, Stratton Enterprises Incorporated and Pratto Corporate Services.
Earlier in the week, Waterpan Mining Consortium Pty also attempted to buy First Uranium shares to to block the asset sale.
First Uranium is without a poison pill or shareholders rights plan. First Uranium ended the trading week at 19 cents, up from 8.5 cents at the start of the week.
First Uranium said it had experienced operating losses at the Ezulwini operations and cash flow at the Mine Waste Solutions operations has been negatively impacted by underperformance due to clay handling issues.
"Shareholders should use caution when considering this expression of interest which is highly conditional and does not include evidence of financing," said First Uranium in a statement.
Correction: Kumvest does not support both asset sales, Ezulwini Mine and Mine Waste Solutions. The article has been changed. MINING.com regrets the error.