  | |
| |
 |
|
| ||
Bar raised on uranium deals Posted: Mon, 08 Jan 2007 [miningmx.com] -- CONCLUDING acquisitions in the uranium industry would become more difficult owing to improved prices for the metal, said sxr Uranium One (Uranium One). “Assets have become very expensive and it’s difficult to find value,” Jean Nortier, Uranium One chief financial officer said in an interview. “It is a sign of the times that sellers of uranium assets are starting to reassess.” Nortier’s comments follow an announcement that Rio Tinto Energy America, a business unit of London-listed Rio Tinto, had withdrawn from the sale of its Sweetwater uranium assets for which Uranium One was the preferred bidder. Uranium One said Rio Tinto’s decision was “prompted by significant and unexpected changes in the world-wide market for uranium since July 7, 2006”. Resource Capital Research, an Australian research house, said in December that the uranium price would continue to climb in 2007. “The uranium price is forecast to reach $90/lb by mid-2007, an increase of 37% over the current spot price and $115/lb by late 2008, an increase of 75% over the current spot price,” it said. Driving uranium demand is the growth in nuclear power station construction. Some 251 reactors are planned or are under construction compared to 442 in operation. “We are naturally very disappointed with Rio Tinto’s decision to withdraw the Sweetwater assets from sale, particularly at this stage in our negotiations,” said Neal Froneman, Uranium One CEO. Rio Tinto would invite Uranium One to re-submit a bid if it decided to sell the Sweetwater assets in the next two years. In the meantime, it would buy copies of the third party technical reports on Sweetwater that Uranium One compiled as part of its bid. However, separate negotiations between Uranium One and US Energy Group to buy the Shootaring Canyon assets were “progressing well”. Uranium One, which has a primary listing on the Toronto Stock Exchange, said it had extended by three months an exclusivity period to buy the Shootaring Canyon mill. “We look forward to finalising definitive acquisition documentation for these assets during the first quarter of 2007,” said Froneman. Uranium One said in July that it would pay Rio Tinto $110m to buy the Sweetwater Uranium Mill and Green Mountain properties. A day later, it unveiled plans to spend $50m buying the Shootaring Canyon Mill, located in southern Utah. The two acquisitions were intended to propel Uranium One into the top five largest uranium producers over the next five years. Nortier said Uranium One’s ability to compete for additional assets, particularly in the US, would be given extra support when the company became a producer of uranium. “There’s an additional rating that comes with being a producer. Different premiums are applied,” Nortier said.Free news alerts: click here to subscribe
| ||||||||
