I was just looking back at Rio Tinto's press release in regards to the takeover of Riversdale Mining. One of the key reason was the fact that it was in line with Rio Tinto?s strategy of developing large, long-life, low operating cost assets to grow shareholder value.
Husab is large Husab is long life Husab has low operating cost
The fact that Rossing and Ranger mines are becoming outdated and depleting as it nears its mine life, further reinforces the logical sense in pursuing a new uranium mine.
Recent articles indicated that CGNPC is not worried about the price but is only ascertaining the aftermath of the nuclear 'disaster' . Given the fact that most if not all of China's nuclear reactor are a lot safer and more updated than the one owned by Tepco, it is very hard to see the deal not going through. However, whether the major shareholders (Itochu, RIO) will accept the deal is another matter. Given the anxiety the nuclear drama is causing I believe Itochu will likely accept CGNPC offer, unless RIO enters into a pre-bid agreement (similar to Riversdale) with them before conducting its own counter-offer.
14 trading days to go, let see what drama is in store for us all.
EXT Price at posting:
$8.24 Sentiment: Buy Disclosure: Held
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