Kalahari warns on Rio stake
Article Date: Feb 17 2009Beleaguered mining giant Rio Tinto has upped its holding in uranium play Kalahari Minerals to 15.8 percent.
The prize at Kalahari is its interest in the Rossing South deposit in Namibia’s Husab uranium project, with an initial resource estimate of 108 million lbs of U3O8 at 430 parts per million, while another Husab deposit at Ida Dome holds more than 25 million lbs of U3O8. The AIM-quoted company holds its interest through its 40.6 per cent stake in Australia-listed Extract Resources, owner of Husab.
Now Rio, whose own long-standing Rossing uranium mine is next door to Rossing South, also has more than 14 per cent of Extract. A mooted merger between Extract and Kalahari foundered when investors suggested Rio might end up with de facto control of the merged concern but with no obligation to make a bid under Australian rules – thus potentially denying shareholders the full value of their Husab interests.
Commenting on Rio’s stake building, Mark Hohnen, Kalahari’s chairman, says he and his board colleagues will seek ‘to ensure that Kalahari maintains its independence at this critical juncture’, to ensure ‘our shareholders receive maximum value from our interest in Extract’. Recommended by Growth Company Investor at 26.5p early last year, Kalahari shares now trade at 57.25p, valuing the company at £102.4 million.
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