kalahari up, page-2

Now that the DFS metrics are publicly available, I am sure that each interested parties will be busily plugging these defined numbers into their working models to generate internal insights while preparing to be a real informed bidders.

I reckon that was the biggest 'tick' to start the bidding process as many have expected/anticipated with other minor milestones such as mining licence & Govt allocated holdings a matter of formality.

The guessing on RIO's strategy can only be based on what their individual holdings of assets have performed. We know TA has publicly stated that he is interested in this sector and their Ranger/Rossing mines are suffering reduced head grades to meet contractual supply agreements and even more enviromental problems with Ranger in the media. Ranger if I am correct is locked into very low U price supply long term agreements so reduced production wtih further complications of the weather is a double whammy on their profits because they have to keep buying from the spot to plug the deficit supply amount. I am assuming Rossing have some of Ranger's problems but without the wet weather. I think any extension of their growth prospects with the bolt on strategy as evidebce of RIV take over fits in perfectly on the aspirations regarding EXT. They need this resource to continue any hope of growth in this sector and now with the MORE as defined by EXT just makes even more sense that z3,z4,z5 and the other less advanced deposits will fulfill their long term aspirations of being major player in this sector.

CGNP if we agree is more of a strategic player with the primary objective of security of supply is the opposing force with its own agenda. The evidence suggest that by 2020 around 90GWte of electric power is the target of nuclear generation supported by the number of nuclear reactor builds and I have to assume that delayed approval of the planned is the central Govt reaction to being prudent possibly to the general public. Iron ore sector is probably a good study of how not to have prices controlled by so few entities hence the rapid expansion in West Africa to the point of helping poorer nations to build their infrasctrcture in order for resource mineral repayment. They don't want a repeat of U supply come 2020. Husab with its 15M lb production is a ready made resource which they can just developed immediately because the hard work was already achieved. The yellow cake would immediately feed into the reactors that are being built.

The question is whether both parties are willing to meet half way and do an offtake agreement for a win win long term future relationship. We know that for both parties, funding is not an issue at all. This is where I seriously doubt that the JV, which I suspect is the less expensive route by RIO to avoid an all out bidding war, does saves any development cost to EXT because of my earlier post. I can see some major bottlenecks in using Rossing downline production facility which only EXT management has better insights to with their active discussions. Like all holders, I am constantly trying to understand the buying/selling pattern in reflection to the sentiment of investors and the latest DFS is no exception. A complex mix because of Fukushima and at current SP the market is telling me that it is speculating on CGNP lowering its bid offer and the options available for EXT management to the more risky go it alone or JV scenario. Don't forget the short selling taking full advantage of the interim.

To me this is a win win for LT holders because either way we will reap the benefit. Bidding war for a better valuation and quick pay day or a much slower one through stand alone mine development or JV that can open up an even bigger resource in the future if you believe the China nuclear story.