THE owner of the biggest uranium deposit in Australia not controlled by BHP Billiton or Rio Tinto is preparing to float on the Australian Securities Exchange.
The Herald has learned that the unlisted Energy and Minerals Australia, which owns the Mulga Rock uranium project in Western Australia, will seek $10 million in coming weeks to help bring its historical resource up to modern standards.
"We are producing our prospectus as we speak," said the managing director of EMA, Chris Davis. "We are intending to list within the next few months."
The company expects to have a much higher market value than $10 million, given at least 80 per cent of EMA shares will remain in the hands of its founding shareholders, including prospector Michael Fewster.
Mulga Rock, which has a historical resource of 46,000 tonnes in three deposits, ranks as the fourth-largest uranium deposit in Australia behind Olympic Dam, Ranger-Jabiluka and Yeelirrie, all controlled by BHP or Rio.
The project, located 230 kilometres east of Kalgoorlie, has never been open to investment from the public since its discovery by a Japanese government company in 1979.
Mr Fewster, an expert on the region's geology, pegged the leases when the Power and Nuclear Corp of Japan let them expire in 2000 when the uranium price dropped to $US7 a pound.
Mulga Rock, a relatively shallow lignite deposit, also contains nickel and cobalt, which Mr Davis said was "intimately associated" with the uranium.
"It is a remarkable deposit," he said, noting preliminary metallurgical test work showed it should be possible to recover 90 per cent of the uranium and 55 per cent of the nickel and cobalt by washing the soft ore in acid for less than 12 hours.
Mulga Rock has been the subject of a legal dispute between Mr Fewster and Uranium Equities after the prospector pulled out of an informal 2005 agreement to sell half of the project. The Supreme Court of Western Australia sided with Mr Fewster, but Uranium Equities lodged an appeal which was heard last week. The Court of Appeal has yet to make a ruling. Mr Davis said regardless of the outcome of the court case, EMA would own at least 50 per cent of Mulga Rock.
He said the project had the potential to be one of the more robust uranium developments in Australia, given the large size of the historical resource, but cautioned that it might be years before it entered production.
"We've done no drilling out there in the last couple of years," he said. "Rather than dilute [Mr Fewster's holding] massively it is better for us to do a small IPO and to use that money to bring the Ambassador and possibly Emperor and Shogun [deposits] up to a JORC code level."
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