[miningmx.com] — CHINA is a step closer to pounce on Extract Resources after Namibia’s competition authorities has consented to a proposed takeover.
Extract, which owns the Husab Uranium Project in Namibia, said on Wednesday the Namibian Competition Commission (NCC) has approved, without conditions, the possible acquisition of Extract by Taurus Minerals, an entity owned by China’s state-owned CGNPC Uranium Resources and the China-Africa Development Fund.
Taurus would not, however, make a formal bid for Extract prior to receiving acceptances from the majority of Kalahari Minerals’ shareholders for its offer of £632m for the company. The offer would expire on February 2. Kalahari owns 42.74% of Extract, and Taurus said in December it would make a A$8.65/share offer for Extract should it be successful in its bid for Kalahari.
The approval from the NCC came after CGNPC held talks with Epangelo, Namibia’s state miner, in November on the Namibian government acquiring a 10% stake in Husab. Not only has the NCC approved Extract’s proposed takeover subsequent to these discussions; Extract was also granted a mining right for Husab.
Husab is the world’s fourth largest known uranium deposit. Extract estimated it would cost $1.65bn to develop the mine, which would produce 15 million pounds uranium per year for an initial 16 years. Rio Tinto, which owns the neighbouring Rossing mine, also owns stakes of 11% and 14% in Kalahari and Extract respectively.
EXTRACT IN LIMBO
Extract Resources had been waiting on the approval of the mining right to start raising funds for the development of the mine, but would now have to wait on how the potential bid by Taurus played out.
Spokesperson Tom Ferreira told Miningmx in December Extract wouldn’t expect to have clarity on its future before end-March. In the meantime, it would start doing small but significant developments, such as the construction of a road towards the main route to Walvis Bay. The team would also carry on with continued exploration.
“There is enough cash for the project team to do meaningful work,’ Ferreira said, adding the company would consider alternatives before it approves the proposed A$8.65 offer from Taurus.
The view was affirmed by Extract on Wednesday: “Extract’s independent directors are continuing to review all available opportunities to maximise shareholder value, and intend to make a recommendation in relation to the proposed.offer if and when such an offer is made.’
