kalahari fears rio takeover

Kalahari fears Rio takeover
Brendan Ryan
Posted: Tue, 17 Feb 2009
[miningmx.com] -- AIM-listed junior Kalahari Minerals (Kalahari) is concerned that resource giant Rio Tinto has embarked on a creeping takeover of the company.


According to Kalahari chairman Mark Hohnen, this is because of Kalahari’s strategic 40% stake in ASX-listed junior Extract Resources (Extract). Extract owns the Rõssing South uranium project in Namibia, which adjoins Rio Tinto’s Rõssing Uranium mine.

Kalahari announced on Tuesday it had been notified by Rio Tinto on February 16 that it had bought another 1.93% of the company, taking its total stake in Kalahari to 15.8%.

Rio Tinto also holds a 14.4% direct stake in Extract, which it has built up since September 2008.

Hohnen said: “The board of Kalahari believes it is important for shareholders to be apprised of Rio Tinto’s further stake building in the company.

“While Rio Tinto’s increased interest represents an endorsement of Extract’s prospects and of the Rõssing South deposit in particular, the board of Kalahari considers it imperative for Kalahari and Extract to remain independent from Rio in order to fully secure the inherent value of Extract’s projects.

“Clearly, certain Kalahari shareholders voiced the same concerns when they refused to endorse the potential merger between Extract and Kalahari over concerns that Rio Tinto could emerge with a controlling interest.

“We will therefore seek to ensure that Kalahari maintains its independence at this critical juncture.”

Rio Tinto spokesman Nick Cobban said: “Rõssing South is an early stage exploration project situated close to Rõssing Uranium which shows some promise.

“We are interested in discussing with the board of Extract how we might maximise value for shareholders in both Extract and our Rõssing mine.

“We have built up our stakes transparently and are keen to see that the boards of Extract and Kalahari have a majority of independent directors able to act in the best interests of their shareholders.”

Kalahari is the largest shareholder in Extract and made an offer of 1.6 Kalahari shares for every Extract share in 2008.

The offer was called off late in November because a number of Kalahari’s largest shareholders refused to support it.

Hohnen said the initial resource estimate for Rõssing South Zone One of 108 million pounds of U3O8 was published on January 27. The resource statement for Zone Two, due by the end of July, is likely to be at the “higher end” of the earlier estimate of about 105m lb.



http://www.miningmx.com/juniors/Kalahari-fears-Rio-takeover.htm