Extract Resources Chairman's address to shareholders Tuesday , 22 Jun 2010
Kalahari Minerals plc, the AIM listed resource company, announces that Extract Resources Limited ('Extract' or 'the Company'), in which Kalahari's subsidiary, Kalahari Uranium Limited, holds a 40.9% interest, held its General Meeting earlier today and all resolutions were duly passed. Stephen Galloway, Chairman of Extract, made the following address at the General Meeting:
"It is with pleasure that I have the opportunity today to update you on the considerable progress that Extract has made since I last addressed shareholders at the Annual General Meeting, in November 2009.
Having discovered the Rssing South and related uranium deposits within the Husab Project in Namibia, Extract is rapidly moving from an exploration company to becoming a world-class uranium producer.
With expected production levels of 15Mlbs of uranium oxide per year, Extract is in a unique and privileged position, with the development of Rssing South on track to become one of the largest, stand alone uranium mines in the world.
Achieving our objective of becoming a major uranium producer of global significance is no simple task and as such Extract has been a hive of activity over the first six months of calendar 2010. I would like to take this opportunity to highlight just some of the key developments:
1. We have recently appointed a new management team for Extract, including CEO and Managing Director, Jonathan Leslie, whom I have already introduced, Chief Financial Officer Peter Sydney-Smith, who sends his apologies, and Company Secretary, Siobhan Lancaster, who is here today. The three of them, each holding critically important positions within the Company, bring outstanding experience and credentials to your company. These appointments are in addition to the Swakop Uranium executive team which we are building under the leadership of Norman Green, whom I introduced at the AGM.
2. To reflect the evolution of the Company, there have also been some board changes in recent months. Rio Tinto's representative director, Chris McFadden, and Polo's representative director, Stephen Dattels, resigned from the board in April. Kalahari Minerals, Extract's largest shareholder, appointed an additional representative director, Alastair Clayton. Ron Chamberlain was appointed as a Non-executive Director and Jonathan Leslie joined the board as Managing Director on 9 April 2010. Like the management team, the collective credentials of the Extract Board is a major strength of the Company, and we believe we have the right blend of experience to deliver on our objective of becoming a major uranium producer.
3. Extract has continued to report exceptional chemical assay drill results. Since November 2009 we have increased the number of drill rigs on site from 13 to 19. Our aim is to update the market with a new resource estimate in Q3 2010, and as announced last week, this remains on schedule.
The main objective of the next resource update is to upgrade the current Zone 1 and Zone 2 inferred resources, to predominantly Indicated status, so that reserves can be defined for the Definitive Feasibility Study ('DFS').
4. The technical team, led by Norman Green, is working diligently towards the completion of the Rssing South Definitive Feasibility Study, which we aim to announce to the market in Q4, 2010. Again, this timetable remains on track, and would be one of the quickest ever globally, for a project of this scale and complexity.
As part of this Definitive Feasibility Study, Extract continues to liaise with key stakeholders, including the Namibian government, in relation to the development of a mine at Rssing south. I should add that in spite of recent media speculation I can confirm that dialogue between the Namibian government, Namibian stakeholders and Extract Resources, remain open and positive.
5. Whilst the board is committed to the Rssing South project being developed solely by Extract, we continue to work with Rothschild to assess potential partnership opportunities that could deliver additional value to the development process. As part of this process, Extract remains in confidential discussions with potential partners. These discussions are ongoing.
6. The Company also announced last week that work on the environmental impact assessment and management plan is proceeding on schedule, in parallel with preparation for the mining licence application. Together with the DFS, the outcomes from this work will be used to support a mining licence application over Rssing South before the end of 2010. This is an extremely positive position for the Company and underpins the hard work by the management team to achieve our objectives.
7. Results from the recently completed pilot plant testwork program are still being returned and interpreted. Available results have been encouraging and provide further support for the base case flow sheet.
Work has just commenced on site this week to excavate a bulk sample from the northern end of Zone 1 to be used in comminution testwork. This will be the first explosive rock breaking at Rssing South.
8. And finally, Extract still has a healthy cash position to deliver on its plans. Extract had $86.7 million in cash as at 30 March 2010.
In conclusion, I would like to reiterate that Namibia has a world class mining industry with an established mining code and government support. The international interest in Namibia and its uranium assets in particular, is well documented, with two new uranium mines in the last 5 years and a third mining licence being awarded.
Extract is proud to have a strong relationship with the Namibian government and its relevant organisations, each of which continue to be supportive of our development plans and initiatives at all levels.
There is open and regular dialogue between Extract and the Namibian government, including at the highest level, ensuring that the Namibian authorities remain abreast of all of Extract's developments. This includes regular updates regarding the Definitive Feasibility Study.
Extract will remain extremely busy for the remainder of 2010, as we strive to deliver some key milestones for the development of this company; in Q3 2010, the resource upgrade of Zone 1 and Zone 2, followed by the Definitive Feasibility Study and mining license application in Q4.
I would like to take this opportunity to thank the board and management for their commitment to realising the full potential of the world class Rssing South project. I would also like to thank the Namibian government, stakeholders and our shareholders for their ongoing support.
Thank you again for your time and attention. We will now move to the formal business of the meeting."
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(20min delay)