fin review today, page-17

Australian Financial Review 17/03/2010

Page 20 Street Talk

Extract keeps suitors in suspense

Uranium hopeful Extract Resources is nudging closer to the completion of its strategic review, with the outcome of the process, run by Rothschild, expected
within the next month.

Extract owns the Rossing South deposit considered one of the worlds most promising uranium projects adjacent to Rio Tintos Rossing mine in Namibia (Rio owns 16% of Extract)

As part of the review process, Extract has been talking to miners and uranium buyers about deals ranging from a stake in the project and a offtake agreement to a full takeover.

It had launched the project after receiving unsolicited expressions from several parties and the expectation is that the best proposals - of varying sorts will be put forward soon to allow it to make a decision.

Interestingly, the parties involved are believed to have signed standstill agreements, which presumably would expire, once Extract chose its path, paving the way for a takeover later if another deal is done at this stage.

At the moment, some think the most likely outcome is that a utility will take about a 15% stake to help develop the project. As Uranium One noted this week, with a $1.8 billion market value and no operating mine yet, Extract isnt a cheap proposition.

Extract has delayed the issue of an updated resource statement until the third quarter but there are suggestions it could a figure of up to 400 million tonnes of ore at a time.