going nuts - options are mega cheap, page-2

china eyes wa uranium Redport could be doing a few more sprints now!

I think times like this you just need to have a two day break from your computer....

Many great opportunities are being lost with a quick sell trigger...

China eyes WA uranium

JOHN PHACEAS


China's National Nuclear Corporation has begun sounding out WA explorers about potential investment in the State's extensive uranium resources, even though a deal allowing Australian yellowcake exports to China will not be signed until next week.

And despite the WA Government's ban on uranium mining, China's biggest international trading group, CITIC, has already secured exclusive rights to the Cogla Downs uranium deposit, 100km east of Cue, estimated to contain at least 780 tonnes of uranium oxide. CITIC was granted a five-year lease over the deposit in April last year.

News of China's efforts to secure access to WA uranium comes four days before Chinese Prime Minister Wen Jiabao arrives in Perth on a whirlwind national tour expected to culminate in a bilateral agreement allowing China to buy Australian uranium and invest directly in Australian uranium mines.

The agreement is expected to clear the way for China, which is seeking to reduce its energy reliance on coal, to start talks with BHP Billiton about the potential to invest in its proposed $5 billion expansion of the massive Olympic Dam copper-uranium mine in South Australia.

Investor fever for uranium stocks spilled over again yesterday, with Encounter shares surging 85 per cent to 88¢, Energy Metals gaining 15 per cent to $2.53 and Deep Yellow jumping 44 per cent to 16.5¢.

Paladin eased 1.4 per cent to $4.88, but has more than doubled since December, while Nova shed 10¢ to $1.40 after trebling over the past three months.

WA hosts two of the world's biggest untapped uranium resources at Rio Tinto's Kintyre project in the Pilbara and BHP Billiton's Yeelirrie project near Sandstone.

Both companies yesterday said they were unaware of any approaches from Chinese groups in relation to the projects, which would remain in mothballs as long as uranium mining was banned in WA.

However, WestBusiness yesterday confirmed several other WA uranium players had received informal approaches from China, amid insatiable investor appetite for uranium shares.

Nova Energy chief executive Tim Sugden said the company had held "informal chats" with a Chinese Government organisation over potential involvement in its Lake Way and Centipede projects at Wiluna, which are estimated to host at least 9000 tonnes of uranium oxide.

"We have discussed whether they would want to put funding into our Wiluna project. We've had discussions about joint venture and exploration arrangements throughout Australia and even globally," he said.

However, Nova "felt the timing wasn't right" to strike a deal as it already had sufficient funding to pursue its exploration plans.

Mr Sugden did not name the Chinese group but it is understood to have represented CNNC, the organisation responsible for all of China's nuclear activities, both civilian and military.

Mr Sugden said neither the imminent deal to allow uranium sales nor the WA Government's opposition to uranium mining were likely to influence Chinese interest in WA uranium reserves.

"Their view takes in a 20-30 year time frame, and they are not seemingly that concerned about short-term government policy because they are looking for supplies over long periods of time," he said.

Will Robinson, managing director of new market darling Encounter Resources, said his company had not received any formal approaches but that Chinese groups had been actively canvassing local explorers at a recent industry conference in Fremantle.

Paladin Resources, which will soon start mining in Namibia but also owns the big Manyingee and Oobagooma deposits in WA, is another company to have attracted recent Chinese interest.

Chairman Rick Crabb yesterday declined to comment on any such approaches, but said it was "general knowledge" that China had "knocked on virtually everyone's door".

Mr Crabb said Paladin did not expect to start mining in WA until at least 2010, but that Chinese interest highlighted the need for WA to drop its anti-uranium stance.

He said WA could be producing over 10,000 tonnes of uranium in five years if there was a change of official policy, equal to half of current world output.

State Premier Alan Carpenter yesterday repeated that government policy would not change.

Although exploration licences allowed companies to explore for any type of mineral, he said all companies were clearly informed that uranium mining would not be allowed. Mr Wen would be reminded of that fact should the uranium issue be raised during his coming visit.

"However, I doubt very much that's he's unaware of our situation," Mr Carpenter said.