the west australian newspaper 03/02/09

Kalahari moves to stop Extract
‘The West Australian’ newspaper
Tuesday 3rd February 2009

By Louise Burke

A week after WA-based explorer Extract Resources announced a 108 million pound uranium resource near Rio Tinto’s Rossing mine in Namibia, its chairman has been sacked while its major shareholder Kalahari is seeking a Supreme Court injunction to stop the appointment of a director it claims has ties to Rio Tinto.

Extract chairman Robert Buchan was voted out by shareholders yesterday at a meeting requisitioned by 39% shareholder Kalahari, which has two representatives on the board. But Extract immediately announced John Main as a non-executive director.

Mr Main, a senior exploration executive, previously worked for Rio forerunner CRA on its Century zinc-lead project and on Rio’s resolution copper project in Arizona. WestBusiness was told that after the meeting Mr. Main had been recommended by Rio executive Andy Lloyd.

Kalahari executive chairman Mark Hohnen has vowed to fight the move, which he said would jeopardise shareholder value in the Rossing South project by handing undue influence to Rio.

“This is a world-class resource and shouldn’t be locked up in one set of negotiations,” he said. “There is absolutely no interest from Kalahari in seeing this resource end up in a bear hug with Rio.”

Kalahari walked away from a planned meeting with Extract in November after Rip Tinto picked up 15.2 per cent of Extract and 14.9 per cent of Kalahari from hedge fund RAB Capital.

Mr. Lloyd stepped into the fray at yesterday’s Extract general meeting in Perth, speaking out in support of Mr. Buchan and indicating Rio’s interest in a tie-up of the two Namibian projects.

“We have some interest and see great potential in Rossing and Rossing South working together for the benefit of all shareholders,” Mr. Lloyd told the meeting.

Outside the meeting, Mr. Lloyd declined to comment further on Rio’s future investment intentions regarding Extract or Rossing South.

Extract managing director Peter McIntyre later defended the independence of Mr. Main but admitted the new director had been referred by Mr. Lloyd.

Mr. Hohnen said Kalahari would take legal action based on Extract appointing Mr. Main after the general meeting, removing shareholders’ right to vote for directors.

“We understand most of his work in life has been with Rio and that he is currently a consultant with Rio –I can’t see how that is independent,” Mr Hohnen said.

Mr. McIntyre said he could not understand the action by Kalahari, given its argument against Mr. Buchan had been base don the failure of the company’s Toronto listing.

“They’ve obviously got and agenda I’m not privy to,” he said.

Extract shares eased 2c to $1.60 yesterday.


Looks like we are in for more fun and games from Kalahari!

For those who were at the meeting yesterday, I was the guy in the short sleeve blue shirt sitting across the isle from the guy from RIO.

Regards

Steve