Extract's Husab financing talks advanceReported by AAP Friday,...

Extract's Husab financing talks advance

Reported by AAP Friday, September 2, 2011

Uranium explorer Extract Resources says it is advancing financing talks for its $US1.66 billion ($A1.55 billion) Husab uranium project in Namibia, which is set to be the world's third-largest uranium-only mine.

Projects manager Andrew Penkethman said the company was also considering bringing in a strategic partner for the project."Finance discussions are going well. There is a real appetite to be involved in this project," Mr Penkethman told the Africa Down Under conference in Perth on Friday.

He indicated that talks continued with Extract's second largest shareholder, Rio Tinto with a 14.2 per cent stake, about jointly developing their neighbouring uranium assets in Namibia.

Rio's Rossing mine, some six kilometres from Husab, has been producing uranium for 30 years.

Discussions between the parties were announced earlier this year.

"It's incomplete (talks with Rio) and ... there are confidentiality agreements, so there's not much more that I can say," Mr Penkethman told reporters on the sidelines of the conference.

"In the background, we've got Rothschild leading our partnership process ... assisting us with both the finance and wider partnership process.

"It could be a combination of debt and equity, bringing on board a strategic partner, but everything is still a work in progress."

The split would potentially be 60 per cent debt, 40 per cent equity.

"We're engaging with various financial institutions around the world, but that's being largely led by our corporate office in the UK," he said.

Extract is waiting for the mining licence to be granted and for financing to be completed before it releases a detailed project timeline.

It would take about 33 months to go from board approval to proceed with the project to commissioning the processing plant.

Mr Penkethman said Husab was set to become bigger with exploration success.

"Husab is a giant ... it is a globally strategic asset," he told delegates.

"With further work, the commercial significance of Husab can only increase."

The project contained the most significant uranium resource in Namibia and the fourth-largest in the world, he said, and ore reserve upgrades last month had extended the planned mine life from 16 years to more than 20 years.

The company plans to release a further resource upgrade in the first half of 2012.

The mine is expected to produce 15 million pounds of uranium per year, from a total resource inventory of 513 million pounds.

Extract shares were down 15 cents at $7.88.

http://finance.ninemsn.com.au/newsbusiness/aap/8293523/extract-advances-mine-financing-talks