Rio takes Kalahari Minerals stake Created: 11 September 2008 Written by: Martin Li
It seems that managers of Kalahari are not the only ones to recognise the value of a strong position in Namibia's considerable uranium resource base. Just days after the announcement of the merger between Kalahari Minerals and Extract Resources, mining giant Rio Tinto has taken a 14.9 per cent stake in Kalahari and 10.9 per cent stake in Extract
That gives the Anglo-Australian major, which already runs the massive Rossing project in the country, a 16.55 per cent interest in the proposed merged group. Broker Ambrian comments that "although some of the shares were bought on the market, the majority were bought at a 15 per cent premium to Kalahari's market price and a 22 per cent premium to Extract's".
The sums of money involved here are, of course, small beer to a behemoth like Rio Tinto (which is itself the subject of a takeover bid from rival BHPBilliton), but it shows the high hopes the industry has for Extract's Husab deposit, which lies just to the south of Rossing.
IC VIEW: BuySHARE TIP UPDATE:
Kalahari's shares edged up to 36p, above our buy recommendation (29p, 6 July 2007), and with Rio's interest confirming the world class nature of the Namibian uranium project, and the major very likely to return for more, they remain a buy.
EXT Price at posting:
$1.17 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)