.14 take over offer by mega uranium

7 July 2006
ASX/Media Announcement
Redport directors recommend offer
to create significant global uranium group
Redport Limited (ASX code: RPT) announced today that Canadian-based Mega
Uranium Ltd (TSXV code: MGA) intends making an offer for all Redport shares and
options.
The Mega offer values Redport shares at 14c, listed options (RPTO) at 9c and unlisted
options (exercise price 12c) at 5.4c.
Redport directors recommend the offer, in the absence of any higher bid. Chairman,
Richard Homsany, says the share offer represents a 33% premium over the recent
market price of the shares, and a 62% premium over the recent market price of the
listed options (based on 10 day volume weighted averages). The offer also gives
liquidity to the investors who hold the unlisted 12c options and a return of over 92% for
those investors who took part in the November 2005 placement.
The offer values Redport at A$98 million on a fully diluted basis ($74m undiluted). Just
over a year ago, Redport was restructured and acquired key uranium assets and had a
market capitalisation of around $4 million.
Mega Uranium, which has significant Australian uranium resources in its own right, will
offer:
10 Mega shares for every 574 Redport shares held,
10 Mega shares for 894 Redport listed options (exercise price 5c),
10 Mega shares for 1,479 Redport unlisted options (exercise price 12c).
The closing price of Mega on the Toronto Stock Exchange Ventures (TSXV) was
C$6.90 (A$8.30) on 5 July. Mega has acquired 15.6 per cent of the shares and options
in Redport (11.1% of the shares).
Mega shares are listed on the Toronto Venture Exchange and accepting shareholders
will be advised of trading arrangements to be made for them.
For shareholders in Redport from the time of its conversion to a uranium explorer in
April last year when the share price was 2.5c, the bid represents a six-fold increase in
the combined value of their shares and options.
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The merged group would be one of the most significant junior uranium groups in the
world, ranking well within the top 20 in terms of uranium resources and in the top 10 in
terms of market capitalisation (approximately A$540 million).
From the outset we have aimed to build an international uranium company. This
merger would create a significant global group with interests in uranium projects in six
countries and four Australian states. (Australia, Canada, Argentina, Mongolia, Bolivia,
and Namibia).
Shareholders in the merged entity will benefit from this diversity which will lower
operational and political risk. The size of the resource base will provide significant
strength in negotiating sales agreements. Shareholders also will have an interest in a
company with advanced projects in several jurisdictions.
All directors of Redport intend accepting the offer for their own holdings and
recommend acceptance of the offer. This provides the opportunity to join an enlarged
global uranium group, Mr Homsany said.
Mega s and Redport s directors believe the combined group s Australian uranium
resources alone offer the capacity for future annual production of around three million
pounds of U3O8, a globally significant production rate.
Mega s off-market offer documents are expected to be mailed to shareholders within the
month. The offer will be subject to a number of conditions, including a minimum
acceptance level of 50 per cent of each class of securities, and approval of the TSX
Venture Exchange.
Mega Uranium Ltd (TSXV code: MGA) is a considerably larger group (market cap
approximately A$440 million), intent on growth through acquisitions and farm-in
agreements. While based in Canada, it focuses on countries outside North America
where there is less competition and better potential to acquire interests in quality
projects. It seeks to fast-track expansion through use of local expertise and will acquire
the services of Redport s management and consultants.
Mega holds uranium assets in Queensland, South Australia and the Northern Territory.
In Queensland it has the advanced Ben Lomond uranium project containing an
indicated and inferred resource of 10.7mlb U3O8 as set out in Table 1. It has other
significant uranium deposits in the Georgetown area of Queensland, comprising
Maureen and others within 30 km of Maureen. It also has two promising uranium
projects surrounding major uranium resources in Argentina held by the National Atomic
Energy Commission of Argentina.
Table 1: Ben Lomond uranium project
Category Tonnes % U3O8 Tonnes U3O8 Million lbs
U3O8
Indicated 1,328,466 0.27 3587 7.9
Inferred 602,585 0.21 1265 2.8
Total 1,931,051 0.25 4852 10.7
The resources in Table 1 are reported in accordance with the JORC Code
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Former head of Pancontinental Mining, which discovered the Jabiluka uranium deposit
in the Northern Territory, Tony Grey, is a director of Mega Uranium.
Mega successfully acquired 100% of ASX listed Hindmarsh Resources in an off-market
takeover early this year and has uranium exploration permits in Canada, Australia,
Argentina, Mongolia and Bolivia.
Redport Limited is a uranium explorer which holds one of Australia s larger deposits at
Lake Maitland, WA. It has royalty arrangements from mining that is about to commence
in Namibia at Paladin s Langer Heinrich project, and other exploration permits in WA
and South Australia.
It has a highly experienced uranium management team led by ex-ERA project manager,
Peter McNally, and ex Langer Heinrich project manager, Malcolm Mason.
CONTACT For further information please phone:
Media: Brian Mahoney (02) 8264 1002
Redport Shareholder Information Line:
Calls from within Australia: 1800 554 525;
Calls from overseas +612 9207 3630.
For further information on Mega, go to
www.megauranium.com
www.tsx.com
Competent Person Statement: Stewart Taylor, Bsc (Hons Geol) FAusIMM, has sufficient
experience which is relevant to the style of mineralisation and type of deposit under
consideration and to the activity which he is undertaking to qualify as a competent
person, as defined in the 2004 edition of the Australian Code for Reporting of
Exploration Results Mineral Resources and Ore Reserves. Mr Taylor consents to the
inclusion in the report of the matters related to the Ben Lomond project, based on his
information in the form and context in which it appears.