End in sight for Extract buyout
01 March 2012
The directors of Extract Resources, would-be developer of the Husab uranium deposit in Namibia, have urged shareholders to accept a buyout offer from China Guangdong Nuclear Power Company subsidiary Taurus Mineral.
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| Drilling in the Namibian sunset (Image: Extract Resources) |
Extract makes the recommendation in its formal "target's statement", published in response to the A$8.65 ($9.24) unconditional cash offer lodged by Taurus on 14 February. The offer was made following Taurus's acquisition of Extract's 42.74% shareholder Kalahari, and was a condition imposed by the Australian Securities and Investments Commission on the Kalahari deal.
Perth-based Extract says it has been actively investigating the possibility of alternatives to the Taurus offer but has now concluded that no "superior proposal" is likely to be made. "Extract's independent directors have undertaken a thorough review of all available options, including various scenarios for development of the project, and have actively sought alternative proposals from third parties," CEO and managing director Jonathan Leslie noted. "In the absence of a superior proposal, Extract's independent directors believe that the offer from Taurus represents the most attractive outcome for shareholders," he said.
After Kalahari, Extract's other major shareholders are Rio Tinto Ltd, owner of the nearby Rössing uranium mine, with a 14.22% interest in the company, and Japanese trading house Itochu, with 10.30%. According to Extract, neither has yet indicated their intentions regarding the Taurus offer, although both accepted the offer from Taurus for their respective interests in Kalahari.
Husab is the highest grade granite-hosted uranium deposit in Namibia, and is described by Extract as the third largest known primary uranium deposit in the world, with estimated ore in proven and probable reserves of 280 million tonnes containing 319.9 million pounds U3O8 (123,000 tU). Extract subsidiary Swakop Uranium plans to start production from the deposit in 2014, and received mine licence approval from Namibia's Ministry of Mines and Energy in November 2011.
Taurus currently plans to develop and commission Husab in accordance with the definitive feasibility study completed by Extract in April 2011. Extract had been in discussions with Namibian state owned mining company Epangelo on the possible acquisition by Epangelo of a 10% interest in the Husab project. Taurus parent CGNPC-URC and Epangelo signed an in-principle agreement in November 2011 that would ultimately see Epangelo take a 10% interest in Swakop Uranium.
Taurus's offer is currently scheduled to close on 2 April.
Researched and written
by World Nuclear News