by: Sarah-Jane Tasker From: The Australian December 10, 2011 12:00AM
Chief executive Jonathan Leslie says it is a good time for the company to take stock and talk to would-be strategic investors in the Husab project
CHINA has put a $2.2 billion price tag on Extract Resources, putting the uranium-focused company in play as it seeks alternative options to develop its significant project that could include major Rio Tinto.
Extract chief executive Jonathan Leslie said yesterday that despite there being a potential downstream offer for Extract, the emerging miner was not precluded from talking to other parties, which it would continue to do in relation to its Husab project in Namibia.
"We have had discussions with all the would-be strategic investors in the Husab project, so we are free to talk to all of those," he said.
"It (the potential offer) is also on the back of us receiving our mining licence, so it is a good time for us to take stock and talk to those people."
China Guangdong Nuclear Power Corp, together with the China-Africa Development Fund, yesterday launched its pound stg. 632 million ($979m) cash bid for Kalahari Minerals which, if successful, would trigger an offer for Extract, in which it is the largest shareholder with a 43 per cent stake.
CGNPC has offered 243.55p-a-share for British-listed Kalahari and if the Chinese secure a majority interest in its target, a downstream offer of $8.65-a-share for Extract would be triggered. Shares in Extract yesterday finished the day 4.7 per cent higher at $8.47.Any deal will be watched by Rio, which owns 11 per cent of Kalahari and 14 per cent of Extract. Rio's Rossing uranium mine in Namibia neighbours Extract's Husab project, which contains the fourth-largest uranium-only deposit in the world.
Extract flagged in February that it was in talks with Rio about jointly developing their neighbouring uranium projects, and Rio has signalled its firm interest in uranium after last week securing control of Canadian uranium junior Hathor Exploration. Japan's Itochu will also be closely watching the outcome because the group has a 10.3 per cent stake in Extract and a 14.9 per cent interest in Kalahari Minerals.
"It (share register) is complicated and in some senses it could restrain some people and in other ways it could be an advantage because there are few people to talk to. It can cut both ways," Mr Leslie said.
Australian-listed Extract had asked the Australian Securities & Investments Commission to intervene when the Chinese first bid for Kalahari in March, requesting that the same offer be made to all of its shareholders.
The original talks broke down after the Chinese attempted to lower its offer after the Japanese nuclear disaster. After talks resumed, ASIC ruled the Chinese must bid for Extract if they secure more than 50 per cent of the voting rights in Kalahari.
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