ext informative article

SYDNEY (Dow Jones)--A struggle for control of one of the world's biggest
undeveloped uranium reserves has emerged as one of the fiercest corporate skirmishes in
recent times, and analysts expect more fireworks.
Extract Resources Ltd. (EXT.AU) has jumped eight-fold in value since December, as Rio
Tinto Ltd. (RIO.AU) built a 15.6% stake, and rival investors began to campaign for a
greater say in the future of its Rossing South venture in the southern African nation of
Namibia.
Interest in uranium has been ignited by Asian countries outlining plans to install vast
amounts of nuclear power capacity in the coming decades, and European countries such as
Sweden and the U.K. ending lengthy bans on new reactors.
China alone will likely build as many as 90 reactors over the next 20 years, its top
energy official said recently.
Namibia, with around 5% of the world's known recoverable reserves of uranium, is
being courted by several heavyweight players in the nuclear industry.
Russian President Dmitry Medvedev will begin a state-visit to Namibia Wednesday, and
diplomats say discussions will include energy ties.
Rossing South is six kilometers away from the massive Rossing uranium mine that's
jointly owned by Rio Tinto Ltd. (RIO.AU) and the Namibian government, and which produced
8% of the world's uranium oxide in 2008.
Testing at Rossing South has turned up good results, indicating a potential resource
that analysts say could exceed 250 million pounds of uranium oxide.
This has helped catapult Perth-based Extract's market capitalization to A$1.65
billion on the Australian Securities Exchange from A$200 million in December.
However, corporate activity has also driven the rally.
In the past year there has been an aborted takeover attempt for Extract; Rio Tinto and
a company headed by London-based mining entrepreneur Stephen Dattels has turned up on
Extract's share register; and two chairmen and now managing director Peter McIntyre,
have left the Extract board.
Australia-based McIntyre's resignation last week came weeks after Extract's
biggest shareholder, UK-based Kalahari Minerals PLC (KAH.LN), called a shareholder
meeting to vote on his removal.
McIntyre said he left for personal reasons after five years in the job, but added:
"There's been a lot going on with the company and, obviously, at the corporate
level."
"I think the company is on a very good path, certainly with the development of our
project over in Namibia."
Kalahari ousted Extract's former chairman Bob Buchan in February, also by calling
a special shareholder meeting.
AIM-listed Kalahari tried to buy Extract outright last year, but its shareholders
became concerned when Rio Tinto built stakes in Extract and Kalahari.
They called off the merger for fear Rio Tinto would take control of the fused group
without having to pay a premium.

Predators Watching

Rio Tinto's investments, coming at a time when it was still seeking to bring down
its debt burden, underscores its ambition to double its uranium output by 2013. It has a
similar interest in Kalahari to its 15.6% stake in Extract.
"Rossing will work with Rio Tinto and Extract Resources to determine the benefits
that might arise from a joint venture for development of Rossing South," Rio Tinto
said in a report released on Rossing's Web site this month.
Rio Tinto is an obvious suitor for Extract due to its proximity to the Rossing mine,
but other companies would likely be taking a look as well, said Brock Salier, a
London-based analyst at Ambrian Capital.
"We think state interest will come from the Chinese, South Koreans and Indians,
while private companies that must be looking closely include Cameco Corp. (CCJ)," he
said.
Much will also depend on Dattels's vision for the company. He's been moving
up Extract and Kalahari's share registers and holds 10.2% and 9.9% stakes in them,
respectively, through companies like Polo Resources Ltd. (PRL.LN), which he chairs.
Dattels has an established track record in unlocking value from undeveloped uranium
deposits. He founded UraMin Inc., which was sold to France's state-owned Areva SA
for US$2.5 billion in 2007.
Another significant holder in Kalahari is AIM-listed Niger Uranium Ltd. (URU.LN) with a
15.6% stake. Its acting chief executive, Ian Stalker, was the former CEO of UraMin.
Extract said Thursday it has invited Dattels, Rio Tinto representative Chris McFadden
and another Kalahari representative, most likely chairman Mark Hohnen, to join its board.

"Kalahari welcomes the invitation of Dattels and McFadden to the board and
supports the involvement of Rio Tinto and Polo Resources in the development of
Extract," Hohnen said in a statement Thursday.
Spokespeople for Polo Resources and Niger Uranium were unavailable for comment.
Paul Adams, a Melbourne-based analyst at DJ Carmichael, said Dattels and Kalahari are
likely part of a team that wants either to develop Extract in their own right, or enjoy
the spoils of a big takeover bid.
"When the Kalahari guys were unable to mount a successful takeover, the next best
thing was to get somebody else in there to somehow get control of the company,"
Adams said.
Several companies, including Rio Tinto, Areva, Cameco or Chinese state interests will
be eyeing Extract, he said.
Key updates for Rossing South are due in the coming weeks, with a possible "huge
third-quarter positive newsflow looming", says Resource Capital Research analyst
Tony Parry.
"The market is now starting to understand that Rossing South is shaping up to be
one of the world's largest uranium deposits," says Parry, who has a Buy
recommendation on Extract shares and A$7.50-A$8.00 price target versus their latest trade
of A$6.81.
Extract has hired Rothschild Australia to do a strategic review of its business, which
it said last week is "well advanced".