Four-month-old Rand Uranium had prepared itself to take advantage of acquisition opportunities arising from current uranium-price softness, CEO John Munro said on Friday.

Munro told Mining Weekly Online that uranium price decline had prompted some uranium players to seek exits.

“We have got to be ready to act,” he said, even though the new company’s obvious immediate deliverable was to secure the maximum value out of the existing assets.

The company would “very rapidly” use its platform as a vehicle for consolidation of South African uranium production.

“We have the characteristics of a low-risk, high-margin asset in the making,” Munro said.

The bulk of Rand Uranium’s material would come from a dump on surface.

The unlisted company, owned 40% by Harmony Gold and 60% by Pamodzi Resources Fund, had the added advantage of an immediate cash flow stream from current workings at the Cooke shafts of the old Randfontein Estates, west of Johannesburg.

Munro said that the surface dump presented “very-low mining recovery risk” and had been well drilled which had facilitated extensive metallurgical test work.

There were opportunities to expand from existing underground gold operations to underground and surface uranium and gold operations, and then to even more substantial gold operations.

Besides having a strong shareholder base, it was able to access capital as an independent.

This positioned the company well to be able to consolidate South African of the uranium assets, even before looking beyond South Africa’s borders.

“We have been going for four months. In this time, 80% of the work has been on the build up of the company to be able to take on the operations from Harmony and at the same time getting the project completely correctly scoped and getting through the prefeasibility work,” Munro said.

But the other 20% had been around strategy and the study of uranium opportunities.

“You can’t choose the time when deals come to you, so you have to be prepared,” he said.

“We do see that, in this period of relative softness in the uranium price, that opportunities that will emerge and there are players around with uranium assets that will be looking for exits,” he added.

Rand Uranium was focusing on a large 6mt/y project that would be viable at $50/lb “or in that region”.

On the company’s eventual listing, Munro said that the plan was to get it into production before listing, which was unlikely to be before 2011.

The location of the listing would depend on whether Rand Uranium’s in the next two years was in South Africa, Africa, Australia or Central Asia.

“We are doing quite a bit of work to start positioning our company to meet the needs of certain investors in the future,” he said.

It was estimated at the time of Rand Uranium’s launch that the company would produce some 185 000 pounds of uranium a month at a cash cost of $30-$35/lb, costs which would be offset by gold income.

It was further estimated that R1,7-billion would be spent to build a uranium plant capable of processing 500 000 t of material a month and to prepare a new dump site.

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