extract says namibian uranium mine well-timed

Extract Says Namibian Uranium Mine Well-Timed to Meet Demand

June 25, 2010, 3:03 AM EDT

By James Paton

June 25 (Bloomberg) -- Extract Resources Ltd., an explorer seeking to develop the worlds second-largest uranium mine, said its Namibian venture is expected to begin production in 2014 and is well timed to meet a projected increase in demand.

Supply is expected to fall short of demand by 2015, driving up prices, Chief Executive Officer Jonathan Leslie said. Nations may rely increasingly on nuclear power after the BP Plc disaster in the Gulf of Mexico prompts stricter regulation and calls for alternatives to oil, he said in an interview in Sydney today. Nothing makes an impact to the extent that nuclear would.
Extract, about 15 percent owned by Rio Tinto Group, seeks to gain from a nuclear power revival as countries turn to the technology to meet energy demand and curb carbon emissions. The company expects its Rossing South mine to produce more than 15 million pounds of uranium oxide a year and become the second biggest after Cameco Corp.s McArthur River mine in Canada.

Leslie, who served as a Rio Tinto board member for nine years through 2003, said talks with potential partners to develop the Namibia project continue. Extract is working with adviser Rothschild to assess opportunities, the company said this month. Its not inviting further companies into those discussions, Leslie said. Were not bringing new people in.
Korea Electric Power Corp., South Koreas biggest electricity provider, said in March that it and Korea Resources Corp. may make a joint bid for a stake in Extract.

Big Deficit
The Australian explorer has estimated the uranium resource, located about 5 kilometers (3.1 miles) from Rio Tintos Rossing mine, may reach 500 million pounds. Extract will consider cooperating with the neighboring Rio mine, Leslie said in Toronto on June 10. London-based Kalahari Minerals Plc owns about 40 percent of Extract.

A big deficit is forecast around the time were coming into production, said Leslie, who was named Extract Resources chief in March. This project is well timed.

Extract moved its headquarters to London from Perth, Australia, after appointing Leslie and Chief Financial Officer Peter Sydney-Smith. The London base puts Extract in the middle of one of the biggest capital markets in the world and makes travel to its African mine easier, said Leslie.
The company, whose shares are listed in Australia and Toronto, is keeping its office in the Western Australia capital.

Extract has declined 18 percent this year to A$6.83 in Sydney trading through yesterday, compared with a drop of about 8 percent for the benchmark S&P/ASX 200 Index. The shares fell 2.2 percent to A$6.68 today, valuing the company at about A$1.6 billion.