No one wants to pay too much (read "fair price") for Husabl BUT...

No one wants to pay too much (read "fair price") for Husabl BUT both the Chinese and Rio both want it IMO.

While I hate to admit it, there is one scenario which makes sense for a CGNPC/RIO JV.

For RIO, it keeps them in the Uranium market, even if they only take a 50% stake. For their 50%, they'll still get top dollar for their product, while for the Chinese, they get 50% of Husab for a steal, and get that Uranium effectively for the price per lb in the ground plus mining costs - that's about $10 + $32 = $42/lb compared with the LT forecast $65/lb. On top of that, CGNPC get the benefits of RIO'S mining expertese and could probably stand back and let RIO manage and operate the mine.

I really hope this does not happen, and I really hope the EXT board recommend against anything other than fair value (ie refer to that last paragraph on the bottom of page 10 of the WHI report which Wipper posted the other day (here it is again):

QUOTE
"Given the number of nationally-based, vertical integrated power companies examining this project as a bolt-on acquisition, we believe that investor risk has substantially lowered, and as a result, we have dropped our discount rate from 12 to 10% pa. It is in this context that the 3-year target price must be viewed as the absolute minimum that Extract management must consider to a renewed takeover Offer." (that 3 year target is $16.14)

Unfortunatley there will be little us SH's can do if RIO and CGNPC go it together as they would hold a combined 57% of EXT. I can't see the remaining 17 SH's in the top 20 collaborating to reject offers for the remaining portion until we see $16.

The more I think about it, the more I think we will struggle to see fair value out of this, and I feel dissappointed already for those who've been in for far longer than me and been waiting very patiently.

Hmm. . . . some nervous waiting for all holders to see how this plays out.