ext - west australian article

Hot stock Extract juggles challenges Extract eyes new chiefs
492 words
12 October 2009
The West Australian
TWAU
First
33
English
(c) 2009, West Australian Newspapers Limited

Good staff are hard to find at the best of times.

Spare a thought for Extract Resources, which has been on the hunt for a Namibian-based chief executive and a Perth-based managing director since June, when a long-running squabble with its biggest shareholder, Kalahari Minerals, cost Peter McIntyre the top job. Extract is understood to have tapped someone for the Namibian role — an appointment is expected as early as this week.

The question of who will take on the Perth-based role remains unanswered, a month after Mr McIntyre officially stepped down and nearly four months since he flagged his intention to do so.

The task facing incoming management is not an easy one.

Extract has become something of a market darling over the past year, since Rio Tinto swooped to pick up a cornerstone stake. The subsequent corporate wrangling may have overshadowed the group’s success in Namibia but its flagship Rossing South deposit is widely regarded as one of the best uranium deposits in the world.

Those credentials were reinforced on Friday when the company said it had discovered a zone of mineralisation on the project’s western limb (previous mineralisation discovered at zones one and two is predominantly on the eastern limb of Rossing South). Extract is talking about a 500 million pounds resource, which would support a 15 million pounds of uranium a year operation.

But getting a new mine up and running is one thing, dealing with corporate politics quite another.

Not only will the group’s new boss have to juggle the interests of Rio, Kalahari and Stephen Dattels’ Polo Resources, which between them control 65 per cent of the company, but they will almost certainly be faced with a takeover bid within the next 12 to 18 months

Rio is widely expected to make a bid, given its Rossing mine borders Extract’s Rossing South deposit, but there has also been speculation it could face an approach from a third party.

Interested bidders are likely to want to move sooner rather than later. Extract shares are up 606 per cent this year alone, valuing the group at $2.2 billion.