Australian uranium bid

27 February 2007

Paladin Resources, an Australian company which has just opened its first uranium mine, albeit in Namibia, has made a takeover bid for rival Summit Resources, which controls two of the most prospective undeveloped uranium orebodies in Australia.

Managing director of Summit, Alan Eggers said: "This offer is not unexpected, and, in my opinion, is designed to capture value that would otherwise flow to Summit's shareholders."

Paladin owns the Manyingee and Oobagooma deposits in Western Australia with 17,000 tonnes U3O8 resources, as well as the Langer Heinrich mine in Namibia, with resources of 48,000 tonnes of U3O8. It has just decided to proceed with developing the Kayelekera uranium deposit in Malawi, to produce 1500 tonnes of U3O8 per year from 2009, based on resources of 15,600 tonnes.

Summit Resources controls the Valhalla uranium deposite in NW Queensland, with 26,000 tonnes U3O8 as indicated and inferred resources, but which is open and likely to increase. Another 11,500 tonnes of resources nearby are also part of the Isa Uranium Joint Venture. Last year Paladin bought a 50% interest in the joint venture, so the takeover bid will bring several prospective properties under Paladin’s full ownership.

A Summit statement said the company would conduct "business as usual" while consulting shareholders and continue with the spin-out of Pacific Mines as described in Summit's last quarterly report.

The hostile bid would see Paladin offer to take all shares in Summit, exchanging one Paladin share for every 2.04 Summit shares and implying a price of A$5.12 ($4.05) per Summit share. The offer values Summit at just over A$1 billion ($792 million) and provides a 34% premium on recent sharemarket transactions.

Further information

Paladin Resources
Summit Resources

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