itochu buying 10% of ext for us$170m?, page-4

Friday, March 26, 2010
ITOCHU Corp to buy 15% stake in Kalahari Minerals
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Kalahari Minerals (AIM: KAH) announced that a major Japanese conglomerate, the ITOCHU Corporation (TYO: 8001), has agreed to acquire a 15% stake in the company. ITOCHU is one of the largest uranium traders in the world, and according to Kalahari, the transaction significantly solidifies and strengthens its shareholder base.

ITOCHU is a 150 year old major Japanese trading house with a long history in the uranium market as well as operating in Namibia, Kalahari Chairman Mark Hohnen commented. Indeed, it has been actively involved in the trading of uranium since 1998 and has delivered over 4,000 tonnes of uranium to the market in 2009, as one of the biggest uranium traders in the world. It has invested in various uranium projects worldwide and has also arranged finance and off-take agreements.

ITOCHU, through its wholly-owned subsidiary Nippon Uranium Resources, will buy the equity stake and subsequently nominate a director to Kalaharis board in order to maximise the benefits of the strategic relationship, Kalahari said.

In addition, ITOCHU has a strong relationship with the Japanese government, and we look forward to receiving support from the Japanese government through ITOCHU. We look forward to further developing our business plan and enhancing our assets with ITOCHU as a welcome new stake holder in Kalahari", Hohnen added.

Kalahari Minerals key investment is its stake in Extract Resources (ASX, TSX: EXT) which is developing the world-class Husab uranium project in Namibia. Kalahari holds just over 40% in the Perth-based company. Extract owns and operates the Rossing South uranium deposit at Husab, where the resource currently stands at 292 Mlb (million pounds) graded 439 parts per million triuranium octoxide (U3O8) of which 267 Mlb at a grade of 487 ppm are in Zones 1 and 2.

Rossing South is situated directly south of the Rio Tinto (LSE: RIO) Rossing Mine, one of the longest running uranium mines in the world. Rio Tinto has been watching Extract Resources' progress with great interest. To date, Rio has built up a sizeable position in Extract both directly with a 14.72% stake and indirectly through a 13.48% stake in Kalahari.

Extract Resources is conducting a Definitive Feasibility Study (DFS) at Rossing South. Earlier this month the company said that the DFS, which is expected to confirm the project's potential as one of the world's largest uranium mines, is progressing well. Extract aims to announce an updated Rossing South resource in Q3 2010 and it said that capital costs for the processing plant and annual operating costs are currently expected to remain in line with the preliminary cost estimates.

Kalahari's other key investment is its circa 44.9% holding in North River Resources PLC (AIM: NRRP), an emerging southern Africa focused multi commodity resource development company.