UPDATE: Kalahari Making Move To Producer From Explorer
09 February 2009 - 10:12PM
Dow Jones News
Kalahari Minerals PLC (KAH.LN) is preparing itself to become a
minerals producer rather than an exploration firm, holding talks
with potential funding partners, the company's chief executive said
Monday.
"We'd look to begin production first with copper," Mark Hohnen,
executive chairman, told Dow Jones Newswires on the sidelines of
the African Mining Indaba in Cape Town.
"We're talking with possible joint venture partners," he said
without providing names. "We'd like to bring in partners on the
funding side."
Hohnen said the London-based company, which is listed on the
Alternative Investment Market, is also talking with unspecified
Indian investors regarding developing a mine for Kalahari's lead
and zinc assets.
Kalahari currently is an exploration company with a portfolio of
copper, base metals and uranium interests in Namibia. Its main
investment is an almost 41% interest in Extract Resources Ltd.
(EXT.AU), which owns the Husab uranium project northeast of
Namibia's Walvis Bay.
Hohnen said Kalahari finds itself in a fortunate position
against the backdrop of the turmoil in world economies and credit
markets in that it has done a lot of drilling work on its assets
and can now look to reduce capital expenditure while it makes its
resource calculations.
"We don't see ourselves as an exploration company any more," he
said, adding the exploration work had been done on its assets other
than gold.
The company at the end of January said it had GBP5.5 million in
cash to accelerate its base metals projects.
Hohnen said the company would have no funding shortfall to build
a copper mine if Extract Resources is taken over, which is a
possibility.
He said Rio Tinto PLC (RTP), which operates the Rossing uranium
mine in Namibia, is a potential suitor for Extract, particularly if
media and industry talk regarding a deal for it to sell stakes in
assets for funding is accurate. According to recent reports,
Aluminum Corp. of China Ltd., or Chinalco, is interested in a deal
with Rio Tinto.
Chinese, Indian, Korean and other investors are looking to
secure multi-year supplies of uranium as they develop nuclear power
plants, Hohnen said.
Rio Tinto owns an almost 14% stake in Kalahari and a 15% (please
double check) in Extract, whose Rossing South target is five
kilometers south of the Rossing mine.
Hohnen said Extract is proceeding with a bankable feasibility
study and could begin production by 2011, although output would
begin sooner if the assets became part of Rio Tinto.
Extract's resource stands at 133.1 million pounds of U3O8, he
said.
Company Web site: www.kalahari-minerals.com
-By Robb M. Stewart, Dow Jones Newswires; +27 11 783 7848;
robb.stewart@dowjones.com
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