Namibia conditionally approves possible acquisition of uranium developer Extract Resources by Chinese-owned entity

27th January 2012 By: Joanne Taylor

The Namibian Competition Commission has approved the possible acquisition of a controlling stake in Australia-based Extract Resources by Chinese-owned Taurus Minerals should London-based Kalahari Minerals, which owns 42.7% of Extract, accept its £632-million bid by February 2.

Extract states that Taurus, owned by State-owned China Guangdong Nuclear Corporation Uranium Resources Corporation (CGNPC-URC) and the China-Africa Development Fund has been granted relief by the Australian Securities and Investments Commission to acquire an interest of more than 20% of Extract’s shares provided that, among other conditions, Taurus makes an offer for Extract once Kalahari has accepted the bid.

Taurus must send offer documentation to Extract shareholders within four weeks of receiving acceptances of the Kalahari offer for more than 50% of the voting rights in Kalahari.

Extract’s company spokesperson says that, if CGNPC-URC receives more than 50% of the voting power in Kalahari Minerals, a takeover offer for Extract will be triggered.

“At this stage, Extract’s independent directors have not made a recommendation as there is currently no offer for Extract. The independent directors are continuing to review all available opportunities to maximise shareholder value and intend to make a recommendation in relation to the proposed Taurus offer for Extract if and when such an offer is made to Extract shareholders.”

She adds that Extract’s principal asset is its Husab uranium project, in Namibia, which contains the fourth-largest uranium-only deposit in the world. Extensive exploration potential also exists for new uranium discoveries in the region.

Construction of the Husab project has not yet begun.

“Based on the definitive feasibility study, completed in April 2011, the mine will take 33 months to develop once funding has been received and the board has given the project the go-ahead.”

Further, Australian reports state that China wants new sources of uranium to help ensure resource security for the country, the world’s largest energy consumer and a keen user of nuclear power.

Kalahari chairperson Mark Hohnen stated in March 2011 that CGNPC-URC’s core business activities are centred on the management and supply of nuclear fuels for its parent, CGNPC, establishing interests in and supporting the development of commercial resources and reserves of natural uranium.