CGNPC's discount offer for Kalahari is 270p/share or $1.2 billion for KAH.
They may have to pay some extra for majority control (or ownership) of Extract via a downstream offer. The downstream offer for Extract was previously estimated to be around $9.50/share (subject to currency variations).
Will CGNPC make their discount offer for Kalahari again? I believe so. CGNPC needs a secure uranium supply. Husab is the 4th biggest uranium deposit. It has high grade ore that is easy to mine and it will cost them peanuts. Read on...
CGNPC has about half a dozen nuclear power stations in operation and under construction. Typically, CGNPC's Yangjiang Nuclear Power Station has six 1,000 mWe reactors.
Hong Kong's China Light and Power Holdings just purchased a 17% share in the Yangjiang Power Station for $11 billion (ie $11 billion for one operating reactor).
In other words - one operating reactor in one power station is worth enough to buy five Husab projects!
CGNPC currently manufactures 20 x 1,000 mWe reactors per year and plans to double production. They also plan to produce and sell fuel rods and fuel rod assemblies.
Yes, they want Husab very much - but so does RIO.
RIO has nothing to lose from counter biding for KAH. If they win they simply incorporate Husab into the Rossing operation at low cost, if they lose they can sell their KAH & EXT shares for a premium and use the funds for further developing Rossing.
EXT Price at posting:
$7.77 Sentiment: Hold Disclosure: Held
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