Andrew Bell talked about Cameco having previously had an interest in CUE (it's listed on the Toronto Stock Exchange) but they had to walk away. Canada was the worlds largest uranium producer with Cameco's Cigar Lake producing the greatest tonnage, when it got overtaken by Kazakhstan in 2009. Current figures are: Kazakhstan (27% of world supply from mines), followed by Canada (20%) and Australia (16%).
So we're not talking about a minnow company previously showing an interest in CUE. Anyway they are out of the picture and it seems their loss is currently Red Rock's, and potentially RSL's gain. RRR has warrants for Cue but it cannot easily exercise them until their shareholding is reduced, otherwise they go into takeover territory. How to reduce that?
Well one possibility is to merge their existing shareholding into RSL and that would indeed be exciting. That would also allow RRR to exercise the warrants as they would no longer be the owner of the CUE shares - except through their interest in RSL, and as Metalguru mentioned, they would do this in exchange for RSL shares under shareholder approval. I cannot see why they wouldn't obtain that approval when it would increase RSL's exposure to a world class asset. RRR are going to get a seat on the board of CUE and together with their own expertise of a couple of Rare Earth PHD'ers on staff at RRR they are quickly moving ahead in leaps and bounds over other companies who are pegging claims and yelling "We found Rare Earth's" without having any expertise or experience.
The RRR staffed (and paid for) Rare Earth expertise allows RSL to tap into that expertise at nil cost! Thanks also to Richard Evans from RSL for discovering CUE as a possible asset for RSL when he went on the hunt and looked at over 200 (yep 200) different assets.
Andrew Bell is not interested, as he mentioned, in acquiring a stack of REE or Uranium leases that are not quality assets. He said whilst the market may be fooled in the short term, in the long term, the realisation would dawn that those assets were not suitable for development. Such is the case with many REE companies today. In the old days the brokers used to shuffle through their bottom drawer and dust off an old Uranium lease or two, put together a Company, list and then spruik a story if Uranium was the 'new next best thing'. Bit difficult to do this with REE's as their exploration and study is relatively new in the history of mining. Nobody had a REE lease languishing in their bottom drawer!
Seems to me that RSL can run on the 'smell of an oil rag' at present with RRR paying for staff that can advise on REE's for RRR - protecting RRR's interest in RSL at the same time.
Our burn rate is $60k per month - a far cry from GBE's burn rate which includes Mark Sumich's salary of $1m per annum. The Globe shareholders will have to 'stump up' for those costs associated with Machinga.
Our partnership with Globe has allowed RSL to be free from cash constraints on developing Machinga, and thereby allows RSL to pursue further exciting developments in its own portfolio as well as other opportunities either locally or abroad.
If, for example, you were to be offered a seat on a 'Round the World' lifetime adventure in a plane that can take five passengers (including the pilot), and you would only have to pay $500 to join, all other expenses including meals, accommodation, entry fees to various events and sightseeing tours are paid for by the other passengers and pilot, would you think that was a good idea, or would you rather share the cost and be one of the other four? Machinga is like that. As shareholders of RSL (having paid our minimum $500 to purchase shares) we don't have to pay another cent to participate in the development of it, but rather sit back and let the Globe shareholders pay for it's development, whilst we reap 20% (1/5th). If Globe doesn't perform, they don't get Machinga.
Sorry, I digressed. Now getting back to CUE Resources Ltd and Yuti, for further info on what the Yuti Uranium Project is all about see: http://www.cue-resources.com/s/Presentations.asp.
I can give you links to other very detailed and lengthy research publications on the Yuti resource if anyone is interested.
Anyway, exciting times ahead as you say Metalguru. I know you have been one of the long term supporters of RSL, so hopefully we can all be rewarded for our patience. Thanks again for your links and info and time and trouble to post from the 'motherland'.
Cheers, Tangrams
SRT Price at posting:
13.5¢ Sentiment: Hold Disclosure: Held
(20min delay)