By Kate Emery The West Australian - Page72 - Saturday April 3, 2008
Corporate speculation about Extract Resources has reignited after one of the world's biggest trading houses, Japan's Itochu Corp, secured a foothold in the uranium hopeful.
The move raises the possibility of a new player in the battle for control of Extract as it approaches a self-imposed deadline for would-be partners to show their hands.
Through three separate deals, Itochu has become the single biggest shareholder in Kalahari Minerals, whose biggest asset is its 40 per cent of Extract. Itochu's stake in Kalahari equates to about 6 per cent of Extract.
Extract has long been regarded as a takeover target because it owns one of the world's biggest undeveloped uranium deposits, Rossing South, in Namibia.
Last month, Korea Electric Power was reported to be considering a joint bid for the group with state-run Korea Resources Corp.
Rio Tinto, which owns the Rossing mine just 6km from Extract's deposit, is considered another possible suitor.
Since the group picked up stakes in both Extract and Kalahari in September 2008, Extract shares have risen 580 per cent.
However, Extract's decision to appoint former Rio director Jonathan Leslie as chief executive last month has some analysts suggesting a joint venture with the mining giant is more likely.
Extract has tapped corporate advisers Rothschild to assess various options for Rossing South.
As part of that process it has called for potential development partners to submit their proposals by early this month.
A feasibility study will follow in mid-2010 and the group hopes to take another step towards its resource target of 500 million pounds of uranium with an upgrade in the third quarter.
It has already found just under 300mlbs.
Itochu, which also has a stake in WA's Lake Maitland uranium project, picked up its 15 per cent Kalahari stake through separate deals with Kalahari and two of its shareholders, Emergent Metals and Regent Pacific.
Emergent and Regent are chaired by Canadian uranium entrepreneur Stephen Dattels, who also chairs Polo Resources and has a seat on the Extract board. Polo Resources has a 9 per cent stake in Extract.
The deals were done through Itochu's Australian subsidiary, Nippon Uranium Resources.
Itochu said it regarded Rossing South as one of the biggest uranium prospects in the world, and that it would receive full support from the Japanese Government.
Extract last traded up 16c at $7.90, well below its $11.45 peak in September last year.
EXT Price at posting:
$7.90 Sentiment: LT Buy Disclosure: Held
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