japs to take 15% of kah, page-31

Hi Skip

Quote

"March 26 (Reuters) - Japanese trading firm Itochu Corp will buy a 15 percent stake for 8.5 billion yen ($92.28 million) in London-based mining company Kalahari Minerals Plc , the Nikkei (news) business daily said.

The move will give Itochu (Munich: 855471 - news) an effective stake of 6 percent in Rossing South, a 60 billion yen uranium mining project Kalahari is undertaking in Namibia, one of the world's richest sources of the radioactive metal, the paper said."


So effectively Itochu is paying US$92.28 for an indirect 6% stake in EXT. Which would equate to paying an EXT SP of ~A$7.06.

Now it is important to remember that this is not the same as buying a direct stake in EXT. There is a far greater risk buying a stake in KAH as apposed to a direct stake in EXT. Also Itochu's power to influence decisions of EXT is far less, as they do not have a seat on EXT's board, only one vote on KAH's board.

Historically KAH has trade at 20% discount to the NAV of its 40% stake in EXT.

Therefore if apply the historical discount of 20% to the A$7.08 paid we get a figure of ~A8.85. Which fairly close to the A$9.04 current valuation that WHIreland gave in their March 24 Brokers Note on EXT.

However even at A$8.85, it still seem very cheap, and a great deal for Itochu!

Regards

Steve