asian buyers approach dyl

Reported in MergerMarket:

Deep Yellow, an ASX-listed uranium company, has seen approaches from interested Japanese and Korean investors, according to Executive Director Martin Kavanagh.

The company, which has a market cap of AUD 140.15m (USD 91.89m), will need to raise funds to conduct its full feasibility studies as it moves towards development of its Joint Ore Reserves Committee (JORC)-approved resources, Kavanagh said. At this point, Deep Yellow has no solid plan for raising capital and could go to the market or undertake a share placement, Kavanagh said. He was unable to give an approximate amount of capital needed.

Deep Yellow has uranium operations in Namibia and Australia. It is currently focused on resources development and moving towards a JORC resource on its Australian projects. Deep Yellow has AUD 50m (USD 32.7m) in the bank and operational costs of about AUD 12m (USD 7.85m) a year. It will have “about AUD 38m (USD 24.84m) at the end of this year (2009), which won’t be enough for full-blown exploration and development,” Kavanagh said.

The company, Kavanagh said, has been approached by potential investors from Japan and Korea, but clarified that there has been no serious discussion. Asked whether the Japanese investors were companies such as the JSX-listed conglomerates Marubeni or Sumitomo, both of which have been reported as interested in Australian uranium, Kavanagh declined comment.

Sumitomo is currently focusing on existing projects, a company spokesperson said. Marubeni is holding talks with several companies, according to its spokesperson, but the spokesperson declined to reveal the companies Marubeni has held talks with.

A source at Korea Electric Power Corporation (KEPCO), a listed electric utility company with a market cap of USD 12.1bn, said investment in uranium mines under exploration is not its priority as it already involved in two exploration projects in Canada. However, the source noted that a uranium mine with reserves of more than 5,000 tons was worth reviewing.

The source said KEPCO would need more information on Deep Yellow’s exploration project before it could decide to invest.