mining news article/jrl

Interesting read....I hold JRL for its undervalued stake in EME

Energy Metals gains a big brother
Ben Sharples
Monday, March 27, 2006

CANADIAN interest in the Australian market continues, with uranium producer Denison Mines inking a $A4.5 million strategic alliance with junior explorer Energy Metals.

"We want to be more aggressive in the Australian sector, and having a big brother like Denison behind us allows us to consider opportunities that would be too big a buy by a company with our market capitalisation," Energy Metals executive director Lindsay Dudfield told MiningNews.net.

"We'd rather be on the front foot than on the back foot."

Dudfield said Denison used to hold the Koongarra uranium deposit in the Northern Territory and was ready to mine it before politics got in the way, eventually selling out to COGEMA and retreating from Australia.

"Their strategic alliance with us marks their re-entry into Australia," Dudfield said. "They've been looking at Australia for a while and we gave them a presentation a year ago, and followed it up again after PDAC and that's when negotiations commenced."

"They like our assets and they believe there is a lot of growth left in the company, but at this stage we've limited the relationship to a strategic alliance."

Dudfield said Denison's major expertise is in the marketing of uranium, with the same management team founding and managing Uranium Participation Corporation, which is listed on the TSX.

"They bring mining experience, marketing experience, and one of their divisions also specialise in rehabilitating uranium mines, so they have rehabilitation expertise as well," Dudfield said.

"We're hopeful that we'll be one of the first new wave uranium miners in Australia.

"We have to increase our resource base at Ngalia Basin and Bigrlyi … and if we're able to do that, then certainly we'll be able to lean heavily on their expertise to make sure everything runs smoothly.

"The lead project is the Bigrlyi joint venture and there is already a resource base to build from which we hope will be JORC-compliant by mid-year. There are also some highly anomalous vanadium grades at the deposit so we're going to have a much closer look at them."

Denison, which is listed on the TSX and has a market capitalisation of around $487 million, will subscribe for 3 million Energy Metal shares at $1.50 each, making it the second-largest shareholder with a 12% stake.

Energy Metals was spun-off Jindalee Resources in a fully subscribed $3 million initial public offering issuing 12 million shares at 25c each. Jindalee holds a 45% stake in the new company.