Miners set for clash over uranium Robin Bromby, Resources July 10, 2006 A BATTLE is likely to erupt over two of Australia's more promising undeveloped uranium deposits. Paladin Resources is expected to announce today or tomorrow a takeover of Valhalla Uranium, which holds a 50 per cent interest in the Valhalla and Skal deposits near Mt Isa.
Both companies went into a trading halt on Friday, but not before Valhalla's share price had moved sharply upward in the preceding few days, rising from $1.01 on Monday to $1.22 when the shares were suspended.
But Paladin's move is unlikely to have a smooth run: it will almost certainly trigger a legal battle with the other partner at Mt Isa, Summit Resources, which has a pre-emptive right to buy out its partner's interests.
It is understood that Paladin decided to buy the company -- Valhalla -- rather than the share in the deposits in order to bypass the pre-emptive right.
Summit is unlikely to take this lying down.
Meanwhile, it has emerged that Canada's Mega Uranium is continuing to scout Australia for uranium projects to add to the ones it has already locked into its portfolio.
The company, which bought Hindmarsh Resources earlier this year, is now in the process of taking over Redport with the support of that company's directors.
Paladin is now clearly joining the race to acquire Australian uranium assets, a signal that consolidation in the sector is well and truly under way.
It is also significant in that it shows Paladin is turning its eyes back to Australia after making its name in Africa.
Its Langer Heinrich mine in Namibia is 70 per cent complete with commissioning on target for September.
And Paladin continues to explore its advanced Kayelekera project in Malawi, with the most recent resource statement indicating it is sitting on 15,670 tonnes of uranium.
Paladin also has two substantial deposits within Western Australia -- at Manyingee, with 12,000 tonnes, and Oobagooma with 9950 tonnes of uranium.
Owning half of Valhalla and Skal -- where high-grade uranium and vanadium drilling has been reported -- would put Paladin in a strong position if and when the West Australian and Queensland Labor government bans on uranium mining are lifted.
Valhalla has a resource of 16,560 tonnes of uranium with drilling continuing, while Skal, 10km away, has similar mineralisation.
The Paladin move on Valhalla, which was a spin-off from Resolute Mining, will now trigger speculation about Summit Resources itself as a potential takeover target.
"It's amazing it hasn't happened already," one industry insider said yesterday. But he added that Summit, now capitalised at $280 million, would be an expensive acquisition.
Summit shares were up 19c on Friday at $1.49.
SMM Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)