As copper becomes ever hotter property and the tantalising price of $3/lb heaves into view, at least for the optimistic among us, companies with their focus on the metal naturally become more interesting. A recent newcomer to the London market, Kalahari Minerals [AIM:KAH] can offer investors no less than three copper projects, with a uranium joint venture thrown in to add piquancy to the proposition.

Altogether, Kalahari can already boast an estimated 250,000 tonnes of copper in the ground across its Namibian ground, which makes it clear that the company has moved beyond exploration and into the pre-feasibility phase with its two key projects. The area in which the company is operating was explored preliminarily by other players back in the 1970s, and a sizable portion of the presently known resources originate from this spell, but failure by those then exploring to come across any very large targets plus a deteriorating political situation in Namibia brought proceedings to a halt.



Now that the copper market looks very different and the politics of Namibia have improved, Kalaharis ground is a lot more desirable. Indeed, the companys Chairman Mark Hohnen admits that it has been lucky to have been able to stake the areas it has, which essentially amount to a large slice of the Namibian section of the Kalahari copper belt, which has some geological similarities with the much storied Zambian copper belt.

Kalaharis first order of priority is the Dordabis project, within which it has homed in on a deposit known as Koperberg. Drilling here has identified oxide and sulphide zones of mineralisation and recorded some good intersections, the highlight of which has been 5 metres graded at 3.43% copper. A small scale pilot processing plant is already recovering copper cathode on site.

The Koperberg resource is still open, and an alluring possibility raised by Hohnen is that it could conform to the Olympic Dam geological model. That is, a massive body of IOCG (iron oxide copper gold) mineralisation with significant smatterings of uranium. It is too early to tell whether this is the case or not, but such a scenario is certainly something pleasant to dream of for Kalahari shareholders, and the company has allocated funds specifically towards testing this hypothesis.

Kalaharis second key project goes by the name of Witvlei, and hosts five known copper deposits along with a number of prospects. The next step for the company will be to try and expand the existing deposits and define resources at the prospects in order to come up with a total resource of a potentially economic size.

If this resource development programme comes up with the goods, Hohnen suggests that an attractive option for Kalahari at Witvlei may be the tried and tested development model of establishing initial cash flow from oxide material before moving on to trickier-to-process sulphides. The same development path could also be worth considering at Koperberg if the Olympic Dam model is not found to hold true there.

Kalaharis only grassroots stage project is Ubib, which has been is known to host copper gold mineralisation with a hint of uranium but needs appraising more thoroughly before much more than this can be said. The project is located some 15 kilometres from Anglo Gold Ashantis Navachab gold mine, which obviously auspicates well. Current work is centred on stream sampling to help identify prospective target zones for the application of more advanced exploration techniques.

The Husab uranium project, which is a joint venture with Extract Resources [ASX:EXT] structured to give Extract 51% and Kalahari the remainder, has surprised both companies. Hohnen says that little was thought of Husab until last year, when some great radiometric anomalies were turned up. The presence of uranium along with other metals has now been confirmed, and diamond drilling to test the deposit at depth begins in the next couple of weeks.

Husab is located right between the Rossing uranium mine, owned by Rio Tinto [LSE:RIO; NYSE:RTP], and the Langer Heinrich deposit, which is being developed by the uranium darling of the Australian market, Paladin Resources [ASX:PDN]. Extract has already gained significant recognition from its constituency of investors for Husab, and if drilling confirms the joint venture partners optimism, then the project could well help win Kalahari some fans in the London market, where uranium plays are not as numerous as they could be, and hence much in demand.

Investment Outlook

Kalahari has raised 6 million by way of its AIM listing, and intends to devote the largest portion of this sum to work at Dordabis. Therefore, this is the project that investors should be keeping their weather eye on. Significant progress down the road to feasibility is sure to add value to the company, other things, such as the copper market, being equal.

But in addition to Dordabis, there is scope for either or both of Witvlei and Ubib to shape up and grab investors attention. Husab already stands out, and with a high level of market interest in new uranium projects still apparent, it is a nice asset for Kalahari to have.

Looks like RIO have increased their holdings to to 15.6% from 13.8% giving them a total of 34.6m in EXT our Aussie partner, which almost hit au$4 last night.
cyril

News from EXT,

2
Resource Definition Update

Six drill rigs are now operating on site, four RC and two core rigs. One rig is completing 50m x 50m infill drilling over 200 metres of strike at the northern end of Zone 1 (Figure 1). Once this drilling has been completed this rig will resume drilling at the southern end of Zone 1 where mineralisation is still open. This drilling is expected to add to the known dimensions of the Zone 1 uranium mineralisation.

Three RC rigs are now operating on Zone 2 closing the drill hole spacing down to a 100m x 100m grid for the initial resource estimate (Figure 1). With increased drilling rates now underway at Zone 2, a steady flow of chemical assay results is expected. Hand held spectrometer results indicate broad zones of strong uranium mineralisation.

The core samples from the two core rigs will enable site geologists to collect crucial structural, geotechnical, lithological and assay data. Whole NQ and half NQ core is being transported to Australia for comminution and metallurgical test work, as part of the Rossing South Feasibility Study.
All project work is on track for a revised Rossing South resource update in August 2009.

Exploration Update

Nine kilometres of the prospective Rossing South stratigraphic trend remain to be explored. Figure 2 clearly shows the same stratigraphy that hosts the Rossing and Rossing South deposits continuing under the Namib Desert cover south of the known extents of Zone 2 uranium mineralisation. A number of dilational sites (structural openings) are evident in this image; these have a high probability of hosting additional occurrences of uraniferous alaskite. The alaskites are passive intrusives and as such are generally located in zones of dilation.

It should also be noted that the Husab Uranium Project is located in the centre of Alaskite Alley (Figure 2), a zone in which all known occurrences of uraniferous leucogranite (alaskite) have been defined in Namibia. This location is coincident with high grade metamorphism, partial melting of basement rocks and the transport and enrichment of uranium. This central location is believed to be related to the elevated uranium grades at Rossing South and highlights the exceptional exploration potential still to be tested south of Zone 2.
cyril

RNS just out !.

And this is blasting off as well......now holding in one form or another KAH, URU and EML......I do not hold EXT...shall have to look into the matter !.

Looks like a takeover bid from RIO is starting to form......!.

Perhaps along with the latest results a reason for the spike?

Any worries about URU's funding may be about to disappear. RIO have announced in the their annual report that they have transferred their Extract & Kalahari shares to Rossing Uranium and that Rossing Uranium will seek a JV with Extract.

That will flush other bidders out. There are rumours in Aus that an initial offer will be made @ A$5/EXT share next week. If there is an offer, I expect it will go for A$6-7. Looks like this will happen sooner rather than later.

When doing any calculations on this basis, bear in mind that URU may have tax to pay on a capital gain (not sure, though, with Virgin Islands registration).
Mark


URU are valued at 22m with KAH at 103p thats 27,680,000=28.5m + 1.5m of their own cash = 30m trading at roughly 32% discount. Well worth a look?
cyril

Someone is buying in blocks of 10,000 at a time.

no tax in BVI, whgich is the whole purpose of registering there!

Just how high will they go!

Friday 27 Mar 2009 17:41:49

Namibia focussed miner Kalahari Minerals continued its stunning rally after Extract Resources, in which it has a 38.85% interest, announced the continued intersection of strong chemical assay results from the Rossing South uranium deposit.

Another excellent post by marben,

With apologies to Extractors, you're not going to like this bit much but Kalahari-ites will probably love it:

Of course, we're reaching the point where a "control premium" comes into it's own. Areva (or A.N.Other) could probably get Kalahari for 200p/share now. That would then give them 40% of Extract... I should think a bid of A$7/share to other Extract s/hs may well be enough to get them the rest. Total cost to Areva:

~360m for Kalahari = A$745m; A$987 for the other 60%. Bargain.

Anyone that buys Kalahari outright guarantees that no-one else can buy Extract... maybe THAT'S the deal that Dattels has done with RIO. :0) Even in its current tight financial state, RIO could probably afford 360m in cash (or their paper, which would probably also be acceptable as it's liquid) for something this strategic. RIO, obviously, don't need to buy the other 60% to conclude a JV deal and block any other bidders. Also bear in mind that if Rossing Uranium is now doing the buying, RIO only have to pay a 68% share of the purchase cost... Oh, and they already own nearly 16%, so only have to buy the other 84%.... so that would make the cost to RIO 360m*.84*.68 = 206m - easy!

Fun & games to come, I expect.

Along with this,
Using exchange rate of Au$1 = 0.48121 and EXT's last trade of au$4.45
it spewed out the following

one URU share = 25.29p of EXT shares
one EML share = 4.94p of EXT shares
one KAH share = 103.38p of EXT shares

Some food for thought?
cyril

RNS Number : 8019P
Kalahari Minerals PLC
31 March 2009

Notice of Polo Resources Substantial Holding in Extract
Extract today announced that Polo Resources Limited ('Polo Resources') became a
substantial shareholder in the Company following an acquisition of 12,608,239
ordinary shares, representing approximately 5.7% of Extract's total issued share
capital. Included in this interest of 12,608,239 ordinary shares, Stephen
Dattels, Executive Chairman of Polo Resources, has a voting interest over
2,107,800 ordinary shares in the Company.


Kalahari Chairman Mark Hohnen said, "The introduction of Polo Resources to the
Extract share register is an important development for the Company, and brings
further diversity to and strengthens the strategic investor base that Extract
has developed. We welcome both Polo Resources' and Stephen Dattels' involvement
in Extract moving forward as we work to achieve the maximum potential from the
Husab Project. Importantly, we see that this recent investment underpins the
inherent value of the Company's outstanding uranium assets and remain highly
confident of achieving real value for Kalahari shareholders."

Ambrian update:
Extract Resources, in which Kalahari Minerals has a 38.85% stake, has announced that Polo Resources increased its holdings in Extract to 5.7%. The shares were acquired in February and March at prices from A$1.65 to A$4.28 (Extract is currently trading at A$4.52).

These purchases are testament to the value that Polo Chairman Stephen Dattels sees in Rossing South. Dattels previously worked at Uramin and was associated with the sale of Uramin to Areva for over US$2.5bn. The position builds on the Emerging Metals (co-chaired by Dattels) 8.84% stake in Kalahari. Also, Niger Uranium, a company that was spun out of Uramin, holds a 15.5% stake in Kalahari Minerals. Meanwhile, Rios holdings stand at 15.6% and 15.8% in Extract and Kalahari, respectively.
Looking ahead for potential value, premiums paid for other uranium deposits range from US$6.25/lb for the sale of Rios Kintyre to Cameco/Mitsubishi up to US$7.64/lb for George Forrests (look through to Belgium utility?) bid for Forsys Metals' Valencia deposit in Namibia (although this has not gone through). Extract has already defined 108Mlbs U3O8 at Rossing South, and expects at least another 100Mlbs from Zone 2 in August.
Using an initial resource of 208Mlbs, the above metrics value Kalahari at 2.02-2.33/share (US$1.3-1.5bn for underlying assets). However, we expect the final resource at Rossing South will reach 300Mlbs, while Ida Dome (currently 25Mlbs) should reach at least 35Mlbs, which equates to a value of 3.33-4.06/Kalahari share (US$2.2-2.5bn for underlying assets). While the Kalahari share price may never reach these levels, we see excellent value in Kalahari at 98p/share (US$622m underlying assets), equivalent to only US$2.67/lb on the 233Mlbs we expect to be defined by August this year.

nice "after hours" announcement will assuredly do sp no harm tomorrow - wish AFR was that certain!

Kalahari Confident Of Delivering Strong Results
Kalahari Minerals is projecting significant exposure to one of the world's largest uranium discoveries whilst at the same time being in a strong financial position to develop its Namibian copper and lead mining projects.

The Group reports a loss of 11.1m for the year to 31 December 2008 which was in line with management expectations but says its levels of expenditure should reduce significantly as it has now moved into the collating phase of its copper and base metal projects.

Where is the top for this sp ?, it can't keep on rising forever !......boy ! does this remind me of a real life VOG of old !, (the rising version I mean). This company will have to raise funds at some stage....good prospects but money needed to develop all the assets.....so when the sp pullback ?.

required field: It reminds me of Pancontinental in the 1970s. Like RIO, Getty bought a 25% stake when the shares were trading at much lower levels, about 6/8p in old money. Pan' had found a huge deposit of uranium in the Northern Territory, on an Aboriginal reserve. Their shares went through the roof, hitting 20 at one time.

so long as it is not like Poseidon then or even ARM or VOG of more recent vintage

What was wrong with Poseidon? Made a killing out of them as well.

i thought Poseidon collapsed down a big black hole at the end of the day.

have a peek at Wikipedia on the Poseidon bubble ..... an entertaining but salutary read

Canadian miner defies Rio Tinto over Namibia

Peter Koven, Financial Post
Wednesday, April 01, 2009

A group of investors are engaged in a battle of wills with mining giant Rio Tinto Ltd., which they feel is trying to get control of a prized uranium deposit without paying a full price for it.

The group includes Canadian mining entrepreneur Stephen Dattels, who has invested heavily in the project in recent days and wants to see it properly auctioned off. Also lingering in the background is the government of Iran, which is involved with Rio Tinto and has a controversial nuclear program.

The project in question is the Rossing South deposit in Namibia. It is controlled by a Toronto-listed company, Extract Resources Ltd., which is based in Perth and is 40%-owned by London-based Kalahari Minerals PLC.

Recent drilling has confirmed that Rossing South is a world-class resource. That drew the interest of Rio Tinto, which already owns the nearby Rossing uranium mine (together with the Iranian government and other investors).

Rio acquired stakes in Extract and Kalahari last year. It then supported a merger between the two miners, which would have allowed it to buy shares in the combined company without being subject to a 20% cap under Australian takeover provisions. The merger was called off over concerns that Rio could get control of the company without paying a premium for it.

Now Rio is talking to other Extract and Kalahari shareholders to try to gain support for a joint venture that would allow it to run Rossing South. But it is having little success.

"Why should Rio Tinto be able to muscle the shareholders of Extract and Kalahari around to suit its own benefit? In my point of view there is a much better alternative, which is to have both companies sold to the highest bidder," Mr. Dattels, one of the key executives at Toronto-based Barrick Gold Corp. in its formative days, said in an interview.

Mr. Dattels sold uranium company UraMin Inc. for US$2.5-billion in 2007, and he is convinced that Rossing South is the next big thing. He bought major interests in Extract and Kalahari through two mining companies that he runs, and believes there are many potential buyers for the deposit.

"This could easily wind up being the most valuable uranium deposit in the world," he said.

One of the shareholders Rio Tinto was talking to is Toronto-based NWT Uranium Corp., which has an indirect stake in Kalahari. But those talks broke off abruptly, and NWT issued an extraordinary statement on Monday night saying it had "concern with certain questionable acts by Rio management which were not in keeping with the spirit of the discussions."

John Zorbas, managing director at NWT, said that he would also like to see Rossing South sold through a "serious bid" or an auction. He declined to comment on Rio Tinto's conduct.

The unusual situation is further complicated by the government of Iran, which is Rio's joint venture partner on the Rossing mine. In Rio's last annual report, the company stated that is transferring its interest in Extract into the Rossing mine joint venture, effectively putting it in the hands of the Iranian government and other investors.