extract to present at indaba mining conferece, page-5

Wednesday, February 03, 2010

Ambrian Capital says Kalahari affilate Extract Resources has FTSE100 potential, maintains 'buy' stance


In a note on Kalahari Minerals (AIM: KAH), London-based stockbroker Ambrian Capital said the companys primary asset, the 40% owned Extract Resources (ASX, TSX: EXT), could potentially grow to become a FTSE100 constituent. According to the broker, the uranium explorer could follow a similar path to Centamin Egypt, who recently joined the main board from the AIM market.

The broker said that Kalahari remains one of its strongest conviction 'buy' recommendations. According to Ambrian, the on-going corporate developments and a resource upgrade for the Rossing South uranium deposit being developed in Namibia, due in the second quarter of 2010, should drive the share price well in excess of 200p.

The analyst report gave a target price of 232p per share. Furthermore, Ambrian said that the appointment of the companys new CEO, from an exceptional shortlist of candidates, will wake up investors to the quality and size of what it believes is a world beating asset.

Ambrians Metals and Mining analyst, Brock Salier attended presentation by Kalahari Minerals and Extract Resources at the 2010 Indaba Conference in Cape Town, South Africa. Speaking at the event, Kalahari chief executive Mark Hohnen made it clear that his goal for the next 12 months is to drive towards a combination of Kalahari and Extract, Salier said.

The analyst also noted the attendance of key Namibian ministers at the event. According to the analyst the Namibian Minister of Mines and Energy indicated that the government is eager to participate in the project, but through broad-based empowerment rather than a system like that used in South Africa. What this means is that the government would invest in the project as an equity partner, and it was made clear that the intention is not to do this on a free-carry basis, but to contribute financially.