Kalahari Minerals shareholders confirm 11.2% stake sale to ITOCHU at 185p
Since ITOCHU Corp (TYO: 8001) announced this morning it is buying a 15% stake in Kalahari Minerals (AIM: KAH), two of Kalahari� significant shareholders, Emerging Metals (AIM: EML) and Regent Pacific (HKG: 0575), have confirmed that they agreed to sell their entire shareholdings to the major Japanese conglomerate.
Kalahari Minerals� key investment is its stake in Extract Resources (ASX, TSX: EXT) which is developing the world-class Husab uranium project in Namibia. Kalahari holds just over 40% in the Perth-based company. Extract owns and operates the Rossing South uranium deposit at Husab, where the resource currently stands at 292 Mlb (million pounds) graded 439 parts per million triuranium octoxide (U3O8) of which 267 Mlb at a grade of 487 ppm are in Zones 1 and 2.
Emerging Metals (AIM: EML) and Regent Pacific (HKG: 0575) agreed to sell their respective holdings of approximately 8.4% and 2.81% of Kalahari at 185p per share. The two companies share a common management team, with Emerging Metals co-chairmen Stephen Dattels and James Mellon also serving as Regent Pacific�s co-chairmen. Dattels is also the chairman of Polo Resources (AIM: PRL) which is associated with the Rossing South development through its 9% shareholding in Extract.
In total Emerging Metals owned approximately 17.8 million shares, and it will realise approximately �32.9m in gross proceeds once the transaction is complete. Regent Pacific sold 6.3m shares realising total proceeds of �11.7m.
Under the terms of Emerging Metal�s disposal, the shares are being sold in two tranches. The company has already sold half its holdings and it has agreed to sell the balance, subject to shareholder approval. The first tranche will settle on 1 April 2010 and the second tranche is expected to be completed no later than 4 May 2010.
Emerging Metals intend to distribute approximately 50% of the net proceeds to shareholders by way of a special dividend, at approximately 4.4 - 4.8pence per share. Following the disposal, Emerging Metals will be considered to be an investment company, and a new investment strategy to utilize the remainder of the proceeds, will be put to shareholders for approval at a general meeting.
Earlier today, Kalahari said that the ITOCHU significantly solidifies and strengthens its shareholder base.
�ITOCHU is a 150 year old major Japanese trading house with a long history in the uranium market as well as operating in Namibia�, Kalahari chairman Mark Hohnen commented. �Indeed, it has been actively involved in the trading of uranium since 1998 and has delivered over 4,000 tonnes of uranium to the market in 2009, as one of the biggest uranium traders in the world. It has invested in various uranium projects worldwide and has also arranged finance and off-take agreements�.
ITOCHU, through its wholly-owned subsidiary Nippon Uranium Resources, is buying the equity stake and it will subsequently nominate a director to Kalahari�s board in order to maximise the benefits of the strategic relationship, Kalahari said.
Rossing South is situated directly south of the Rio Tinto (LSE: RIO) Rossing Mine, one of the longest running uranium mines in the world. Rio Tinto has been watching Extract Resources' progress with great interest. To date, Rio has built up a sizeable position in Extract both directly with a 14.72% stake and indirectly through a 13.48% stake in Kalahari.
Extract Resources is conducting a Definitive Feasibility Study (DFS) at Rossing South. Earlier this month the company said that the DFS, which is expected to confirm the project's potential as one of the world's largest uranium mines, is progressing well. Extract aims to announce an updated Rossing South resource in Q3 2010 and it said that capital costs for the processing plant and annual operating costs are currently expected to remain in line with the preliminary cost estimates.
Kalahari's other key investment is its circa 44.9% holding in North River Resources PLC (AIM: NRRP), an emerging southern Africa focused multi commodity resource development company.
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