Jean Nortier, Uranium One CEO
Send this article to a friend
Print this page

» Uranium One creates $5bn company

» JSE:AFLEASE GOLD LIMITED:
114c 0%

Uranium One may quit Aflease Gold
David McKay
Posted: Mon, 12 Feb 2007

[miningmx.com] -- SXR Uranium One, which has unveiled a $5bn proposal to merge with UrAsia Energy, said it may sell shares in Aflease Gold, a 71%-owned gold exploration firm listed in Johannesburg.

“We do intend diluting our stake in Aflease Gold, but not at any loss of value,” said Jean Nortier, chief financial officer of sxr Uranium One. “We have had a number of offers in the past for the business.”

Aflease Gold is developing several projects in South Africa’s Witwatersrand Basin including the assets of Sub Nigel, a company Aflease Gold bought in a reverse takeover in January 2006, and the $108m Modder East project.

However, Nortier said Aflease Gold would press ahead with its own exploration strategy. “We’re not using sxr Uranium One people to run Aflease Gold. It has its own people,” he said.

Aflease Gold traded 1.3% lower on the Johannesburg Stock Exchange to close at R3,12/share. According to the Aflease Gold website, the company had total reported indicated resources of 2.6 million ounces for its Modder East and Sub Nigel Gold projects.

Aflease Gold was unbundled from Aflease Gold & Uranium Resources (Aflease) in 2005 after Aflease’s merged its uranium assets with Southern Cross, a Canadian firm.

Expressions of interest in the company have been received from South Africa and from potential international buyers.

“Our 71% stake is a non-resident holding, and they are shares that we can swap with other non-resident shares,” said Nortier. This raises the prospect of a paper-based scheme with a Canadian firm. Current South African interest in the asset would probably require a cash payment, Nortier said, without providing details of the firm’s suitors.

However, discussions were not mature enough to require a cautionary announcement to shareholders. “We do have a few suitors but this is still a strategy,” Nortier said.

Click Here to subscribe to our daily newsletter
Commenting on the proposal to merge sxr Uranium One with urAsia, Nortier said the company had the right to match a competing bid. Asked whether such a bid was possible, he said: “I can see a lot of reason why there would be interest in this company.” Sxr Uranium One negotiated a $90m break-fee in the event of its losing to a rival bid, Nortier said. He also raised the possibility of a bid to take over the combined company.

The strategy is for the new uranium company – to be named Uranium One – to consolidate assets in the US and grow its production base yet further. “We see pieces of a puzzle and we want to put them together,” he said of the fragmented US primary uranium producing market.

If the transaction is supported by UrAsia Energy shareholders, the combined unit will have production of 11 million pounds/year of uranium by 2012. This could grow to 19 million pounds/year assuming internal expansion projects were successfully completed making the company the world’s second largest producer assuming other producers stood still.

The proposal does not require a vote by sxr Uranium One shareholders.

Nortier also said it was possible Uranium One would seek a UK listing, probably on the main board as the $5bn market capitalisation was too large for a listing on London’s Alternative Investment Market. There were no plans are present to delist from Johannesburg, he said.