Excellent report from the latest HIGHGRADE online magazine.
"Extract upbeat on new resource
Michael Quinn,
AFTER pleasantly surprising all and sundry first time round, Extract Resources is hopeful of again over-delivering on expectations, this time from the Zone 2 uranium prospect at Rossing South in Namibia.
Business development manager Richard Henning told the AMEC national mining congress in Perth that the company was “quietly confident” the resource to be calculated for Zone 2 would come in at the upper end of the targeted range of between 68.7 million and 105.8 million pounds of U3O8 grading 260-300ppm.
Zone 1, which was targeted to contain 57.3-92.5Mlbs at 260-300ppm, actually yielded 108Mlbs at 430ppm when its resource was reported in January. The resource estimate for Zone 2 is expected in August. Comparing the two prospects, Henning indicated Zone 1 had the more spectacular grades while Zone 2 has the better widths of mineralisation.
Extract also holds the 25Mlb Ida Dome deposits (grading 213ppm) to the south of Rossing South, with Hollands Dome, just to the south of Ida, expected to contain a similar quantum of U3O8.
On a fully diluted basis, Extract was capitalised at the end of last week at about $A1.15 billion.
According to a UBS note this week, uranium producers are trading at an average EV/lb multiple of $US35/lb of reserves and of $US11/lb of resources, while explorers and developers are trading at an average of US$4/lb of resources. At a little under $US7/lb, Extract’s resources were trading on the highest multiple of the dozen or so explorers/developers looked at by the investment bank. However, this comparison of course is made before the Zone 2 resource is calculated.
Extract’s ground lies borders Rio Tinto’s Rossing uranium operation, with Henning saying the opportunity for toll treatment would be examined. Rio has an equity interest of about 21% in Extract via a direct 15% stake in the junior and a 15% stake in AIM-listed Kalahari Minerals – which holds 37% of Extract.
Extract has about $A30 million cash.
Henning played a predictable straight bat to a question regarding possible corporate machinations, saying Rio was a supportive shareholder. He was less guarded when it came to Extract’s share price, saying “there is every reason to think we’ve still got a long way to go”.
Extract shares closed last week at around the $A5 mark, up from about $1 per share some 12 months ago. Rossing South was only discovered in February 2008.
Henning highlighted both the very high grade nature of the Rossing South mineralisation, and the potential for further additions from exploration drilling – with 9km of the total 15km Rossing South target remaining to be tested.
The company will be further promoting the project next month when it’s pencilled in an analyst and media site visit.
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Excellent report from the latest HIGHGRADE online...
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Last
1.0¢ |
Change
0.001(11.1%) |
Mkt cap ! $20.72M |
Open | High | Low | Value | Volume |
0.9¢ | 1.0¢ | 0.9¢ | $2.706K | 298.9K |
Buyers (Bids)
No. | Vol. | Price($) |
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1 | 20594 | 0.9¢ |
Sellers (Offers)
Price($) | Vol. | No. |
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1.0¢ | 10524124 | 16 |
View Market Depth
No. | Vol. | Price($) |
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1 | 20594 | 0.009 |
15 | 5011972 | 0.008 |
4 | 1118696 | 0.007 |
4 | 1775000 | 0.006 |
2 | 1280000 | 0.005 |
Price($) | Vol. | No. |
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0.010 | 10524124 | 16 |
0.011 | 2107219 | 6 |
0.012 | 560000 | 2 |
0.013 | 169800 | 3 |
0.014 | 1000000 | 1 |
Last trade - 11.20am 08/08/2025 (20 minute delay) ? |
EXT (ASX) Chart |