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.

Another quality set of drilling results from EXT,it just better and betterer.http://asx.com.au
cyril

Been around for a few of days,but a good resd and shows the long term potential.

From the Sunday Times.

The great uranium stampede; Everybody wants supplies as nuclear power comes roaring back, writes Danny Fortson
Danny Fortson
990 words
31 January 2010
The Sunday Times
ST
1
10
English
(c) 2010 Times Newspapers Limited. All rights reserved
It's an odd place for a group of Frenchmen to pitch a tent city. Bakouma is one of the deepest, darkest corners of African jungle. From Bangui, the capital of the land-locked Central African Republic, it takes days to navigate the 800km of dirt track to this patch of virgin forest in the middle of the continent. Usually they go by light aircraft to a nearby landing strip.

Most of the 160 or so jungle dwellers are scientists but they are not there to count butterflies.

They are drawing up plans for a uranium mine. Areva, France's state-owned nuclear giant, is behind the project. It hopes to begin clearing forest next year after the government approves its plan.

Bakouma is not an isolated case. It's just one example of a silent landgrab unfolding around the globe. After decades as a forgotten commodity, uranium, the radioactive element used as the primary fuel for nuclear power, is hot property again. Agents for companies, many of them government-controlled, are fanning out across the globe to gain access to the powdery, radioactive ore.

The scramble has been set off by the comeback of nuclear power. In the past couple of years countries that for decades had shunned it as an expensive, pariah technology have embraced it anew. Britain is leading the charge. The government envisages a new generation of reactors to replace the rickety old stations that will be retired in the coming years. The renaissance has taken hold elsewhere, from America to the Middle East and China.

For some, the resulting uranium rush is worrying. Rianne Teule, a nuclear campaigner at Greenpeace, said: "A lot of new countries in Africa are opening up to uranium mining but it is non-African companies that are exploiting the resource Chinese, Canadian and French firms. It's a whole new phase of colonialism."

It's also a serious business. As with oil, companies and governments are seeking to ensure supplies of a fuel that will play an increasing role as economies move away from traditional fossil-fuelled power.

Last year Kazakhstan leapfrogged Australia and Canada to become the largest supplier of uranium, producing about 14,000 tonnes, a fifth of global consumption.

Niger has also begun drawing the attention, and money, of big multinationals. Areva is investing more than 1 billion (870m) in a giant new mine in the impoverished desert nation. CNNC, China's stateowned nuclear firm, bought a stake in a project there last week. And Obtala Resources, a London-listed group run by Frank Scolaro, former chairman of Regal Petroleum, is in the final stages of negotiating licences for two new prospects.

"These are the kinds of projects we like," said Scolaro. "The world is going nuclear and they will need the fuel."

Today there are 439 reactors operating in the world. According to Steve Kidd at the World Nuclear Association, another 142 are in the pipeline, and 53 of these are already under construction.

Of the latter, 20 are in China. "We forget that in France in the 1970s they were building five new reactors a year," he said. "The Chinese are just doing what the French did, but on a Chinese scale."

The mining boom has been boosted by a surge in the uranium price. "For three decades uranium cost $10 a pound because nuclear power wasn't seen as very desirable. Now that we have all these concerns about the environment and going low-carbon, it's different. It hit $137 [a pound] two years ago," said Joe Kelly, head of nuclear fuel markets at Icap Energy. Today the spot price for unenriched uranium is $42 a pound, enough for most projects to go ahead.

The Cigar Lake mine in Saskatchewan, Canada, the world's largest undeveloped highgrade deposit, jointly owned by Areva and Cameco of Canada, will open next year. It is one of eight that will begin producing in the next 12 months.

A couple of the biggest sources, meanwhile, could soon run out. America and Russia supply up to a fifth of the world's needs from decommissioned bombs or stockpiles built up during their nuclear arms race. They are gradually releasing these into the market. "There is a worry that when the cold-war stocks run out we won't be able to meet demand," said Kelly.

The US Department of Energy has pledged not to flood the market. If it did, the price would crash and bring many new projects to an abrupt halt.

That would be no bad thing, said Greenpeace's Teule, who argued that many of the new mining areas are virtually unregulated.

A recent investigation in Niger uncovered radioactive shovels on sale in the local market in Arlit, a company town next to Areva's mine there. The country is the world's sixth-largest producer and has ambitions to move up the rankings. It employs only three nuclear inspectors to keep watch on the industry.

Areva acknowledged the problem but said the company has instituted a plan to stop radioactive "waste rock" and scrap metal from finding its way into the local community.

Teule said: "We are using this as a specific example to other countries about the problems they can get themselves into and to ensure there is proper regulation and reports on the environmental impact."

Indeed, even as investors flood into Niger, companies are starting new projects in other poor countries such as Namibia and Malawi.

"Getting a mine going in Texas takes two bookshelves full of authorisations," said one commentator.

"In Niger you give a shovel to a guy on $2 a day and you're mining uranium."

A nuclear power station building boom has increased demand for uranium Australia's Olympic Dam deposit (inset) is one of the world's largest
cyril

miningmx.com] -- EXTRACT Resources uranium strike south of Rossing Uranium in Namibia had all the redeeming features of a great uranium mine said Extract chairman Steve Galloway.

Addressing the Mining Indaba Conference being held in Cape Town on Wednesday, Galloway added Extracts geologists had followed a traditional geological proverb in their approach.

Its a well-known saying that if you want to hunt for elephants then you need to look in elephant country.

For uranium, elephant country is around Rossing Uranium and you could say we have found a herd of elephants there, he quipped.

Galloway described Extracts Rossing South project as the most important uranium discovery of the past 40 years.

He said it was positioned to become the second largest uranium mine in the world assuming it reached its projected annual production rate of 15 million pounds of U308.

Extract is headquartered in Perth and listed on the Australian and Toronto stock exchanges.

The controlling shareholder is AIM-listed Kalahari Minerals which holds 40% of the equity but Rio Tinto which owns Rossing Uranium has a 15% stake in Extract and a 15.8% stake in Kalahari Minerals.

That has triggered speculation that Rio Tinto is intent on a creeping takeover of the Rossing South project to extend the economic life of its existing Rossing Uranium mine.

In February last year Rio Tinto spokesman Nick Cobban told Miningmx that, Rossing South is an early stage exploration project situated close to Rossing Uranium which shows some promise.

We are interested in discussing with the board of Extract how we might maximise value for shareholders in both Extract and our Rossing Mine.

Galloway said that Extract had kept a low profile until now but that was about to change.

In November, Extract announced it had invited interested parties to submit proposals for their potential partnership in the development of Rossing South.

The company added, due to the size and quality of the Rossing South deposit, Extract has received extensive interest from a number of parties seeking to participate in the projects developmen. Extract will keep shareholders informed of any material developments.
cyril

Confirmed reports of several interested parties can be founed on EXT's
site via ASX.com (5thFeb)
cyril

KAH is tanking at the minute breaking both the 50/200day average,ae 151p this is lookimg very tasty? Too good to drop much more with its fundimetals but worth waiting to see where it bottoms out?
cyril

there is something quite odd about this stock ...... you read about it, and it sounds as though it should be roaring ahead - but it patently is not! .... for all that, while volume is pretty pathetic (about 150k this morning) bids far outnumber sells

Not looking good....perhaps people including myself expected Rio Tinto to step in and snap this up.....

Kah's value is closely tied in with EXT (down now to A$7.09), but on very low volume also. As EXT is held extremely tightly by the institutiuns,it would appear only the pi's selling at the moment,so the only thing that imo has brought on(outside market conditions)this drop is NWT's action against URU who own over 13% of KAH.
With urainum being much sort after,maybe market looking for cheap stock?
cyril

2 shares bought at 153.75p,now is that a buy signal????
cyril

From a most respected and knowledgable poster.


http://www.stockopedia.co.uk/forum/view/30317?comment=285#285

cyril

http://www.asx.com.au

Enter EXT and check out company annoucements.
cyril

bought back 2/3 weeks ago and banked a useful little profit this morning ..... no doubt i shall but back in again in due course

The only peoblem with being out is the possibility of a take over,so imo
a safe hold with just rewards comong eventually.
cyril

Kalahari Minerals has revealed outstanding chemical assay results from Rsing South - part of Extract Resources' Husab uranium project in Namibia.
Kalahari's subsidiary, Kalahari Uranium, holds a 40.44% interest in the project.
Kalahari executive chairman Mark Hohnen described the results as truly stunning results, with highlights including 146m @ 639ppm and 21m @ 2,003ppm for Zone 1; 129m @ 1,415ppm and 99m @1,078ppm for Zone 2.

He said: "These results reiterate the quality and global significance of the Husab uranium project in Namibia and we are confident that, with the highly active on-going drilling programme on the two zones reported on, which are open down dip and along strike, a resource target in excess of 550Mlbs will easily be achieved."

==========

and the market yawns - ridiculous!

There are one or two other stocks like that....good results and the market's not interested....

Come mid year when another resource upgrade is planned and expected to exceed 400mlbs of uranium,the market will have to re-value this project(if not before)and i can see 250p. But its whetger we can reach maturity to see the real potential,something i douht will be allowed?
cyril
PS; A littke like RXP who are making staedy progress but ignored by the market,making both excellent long term holds.
aimho

only one way for this commodity to go - up

There's only one way for this commodity to go - up Feb 26, 2010
Print this article

The most compelling thing about uranium is probably best expressed in the chart below...



The uranium market has been in deficit for several years, living off the stockpiles of the Cold War. Put simply, we use more than we make.

Looking out to 2018, we're about 400m lbs short. To get some perspective on that number, look below at the table of the top ten producers of uranium in 2009 and the percentage of the total market each makes up.

The top producers, which make up nearly 90% of the market, produced about 110m lbs of uranium last year. So essentially, the industry needs to produce almost four times that to meet the estimated new demand through to 2018. On an annual basis, the industry will need to about double in size.

A sidelight to this is the fact that 63% of all uranium comes from just ten mines. This means that the global supply of uranium is susceptible to supply shocks. If one big mine floods or goes down for whatever reason, it'll make a big wave in the uranium market.


Top ten uranium producers
Company Uranium production
(million lbs) Primary
supply (%)
Kazatomprom 21.4 17.0
Cameco 20.2 16.0
Areva 18.5 14.7
Rio Tinto 14.1 11.2
Atomredmetzoloto 11.7 9.9
BHP Billiton 7.7 6.1
Navoi 6.6 5.0
ERA 3.6 2.9
Uranium One 3.6 2.9
Paladin 3.5 2.9

Total 110.6 87.6


It gets even more interesting...

Most of the best mines are already in production. As with everything else in the resource world these days, the low-hanging fruit is all gone. Future grades will be lower, meaning we'll have to mine a lot more ore to get a given amount of uranium. New mines are in more geologically challenging places. New supply is also coming from riskier places, such as Africa and Kazakhstan. All of this means that costs will go up.

These facts are reflected in the industry's cost curve, as you can see in the chart below.



This tells you that at current production about 130m lbs those last million lbs are a lot more expensive to produce than the first million. It also means that as the industry ramps up beyond 130m lbs to meet demand, costs will rise sharply.

This is not a perfect predictor, of course. There are new mines that will come online and produce uranium at low costs. But it bodes well for a higher uranium price in the future. The current spot price is around $45/lb. Only around 10%30% of the uranium traded in any year is sold on the spot market. Most uranium is sold to utilities via long-term contracts. The longer-term price of uranium over $60.

For some perspective on uranium pricing, consider that when uranium got hot in the summer of 2007, the spot price hit $136/lb. It's done nothing but go down since then. If you are a contrarian thinker, which is to say a good investor, that fact will attract you. I can tell you with great certainty that the uranium price won't go to zero. That downward trend will reverse, and based on all the data I presented above, it looks like a higher uranium price over the next few years is a sure thing or about as close to a sure thing as you can get in markets.

That's why the uranium price has to go up. If it doesn't, there is no incentive for producers to make more, and hence a lot of reactors are going to go without fuel. More importantly, it can go up. Simply put, the uranium price could double and it wouldn't affect the economics of a nuclear reactor much. This is not true with a lot of commodities. If the price of oil doubled, the global economy would double over in great pain and probably grind to a halt. Not so with uranium.

The biggest potential negative I see is the risk of some nuclear accident that derails this whole thesis as people abandon nuclear. But the industry has a clean safety record going back more than two decades now.

There are 436 reactors in the world that provide about 15% of the world's electricity. The new reactors have fewer moving parts and are much better than the old ones. And most of the world seems to be coming around to the green benefits of nuclear power; even President Obama's administration promises loan guarantees and other goodies for the builders of nuclear reactors. In our carbon-worried world, nuclear is a relatively clean source of energy.

For all these reasons, we see a massive buildup in reactors under construction, planned or proposed. The World Nuclear Association (WNA) says there are 52 reactors under construction, 135 reactors planned and 295 reactors proposed. This is what underpins that demand we talked about up top. Where are all those reactors going to be? Mostly, from China, India, Japan, and the US.

Once again, we have a resource story driven by China and India. Neither country produces much uranium. China produces less than 2% of the world's uranium. If you believe "buy what China needs," as I do, then uranium fits well with that worldview. In conclusion, I want to own uranium.

This article was written by Chris Mayer for the free daily investment letter DailyWealth
cyril

Australian Financial Review 17/03/2010

page 20 Street Talk

Extract keeps suitors in suspense

Uranium hopeful Extract Resources is nudging closer to the completion of its strategic review, with the outcome of the process, run by Rothschild, expected within the next month.

Extract owns the Rossing South deposit considered one of the worlds most promising uranium projects adjacent to Rio Tinto's Rossing mine in Namibia (Rio owns 16% of Extract).

As part of the review process, Extract has been talking to miners and uranium buyers about deals ranging from a stake in the project and a offtake agreement to a full takeover.

It had launched the project after receiving unsolicited expressions from several parties and the expectation is that the best proposals - of varying sorts will be put forward soon to allow it to make a decision.

Interestingly, the parties involved are believed to have signed standstill agreements, which presumably would expire, once Extract chose its path, paving the way for a takeover later if another deal is done at this stage.

At the moment, some think the most likely outcome is that a utility will take about a 15% stake to help develop the project. As Uranium One noted this week, with a $1.8 billion market value and no operating mine yet, Extract isn't a cheap proposition.

Extract has delayed the issue of an updated resource statement until the third quarter but there are suggestions it could a figure of up to 400 million tonnes of ore at a time.
cyril

Korea Electric May Bid for Stake in Extract Resources (Update3)
March 19, 2010, 3:52 AM EDT
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By Shinhye Kang

March 19 (Bloomberg) -- Korea Electric Power Corp. and state-run Korea Resources Corp. may make a joint bid for a stake in Extract Resources Ltd., an Australian explorer that owns a uranium mine in Namibia, to obtain supplies of the nuclear fuel.

Were interested in the Rossing South mine in Namibia owned by Extract, Chang Joo Ok, vice president of Korea Electric Power and head of its overseas energy development team, said in an interview in Seoul yesterday. But pricing is the most important factor.

Extract Resources rose 14 percent in Sydney today after surging more than six-fold last year as investors bet more countries will embrace nuclear power. South Korea plans to add eight atomic plants by 2016 and export 80 reactors by 2030. Korea Electric emerged as a rival to General Electric Co. and Areva SA after beating them in December to a $20 billion order to build reactors in the United Arab Emirates.

Namibia is politically stable and would be a good target, said Park Young Ho, head of Africa and Middle East research at Korea Institute for International Economic Policy, a government think tank. Most attractive mines in Africa are already owned by major global companies, and it would be risky for a South Korean company to enter the market by itself. The stake purchase would be one of the safe options.

Extract Resources, 15 percent-owned by Rio Tinto Group, continues to evaluate potential partners to join its Namibian project, Chairman Steve Galloway said in an e-mail today, when asked to comment on the possible joint bid.

The South Korean group hasnt decided whether to bid for a stake in the Rossing South mine or Extract Resources itself, a Korea Resources official familiar with the plan said, declining to be named because internal discussions are still ongoing. Cho Hye Won, a spokeswoman at Korea Resources, declined to comment.



Stakes in Mines

Perth-based Extract Resources advanced the most since Dec. 23, 2008, to close at A$8.35. Korea Electric fell 0.3 percent to 38,550 won in Seoul, compared with the 0.7 percent gain in the benchmark Kospi index.

Korea Electric was chosen by Extract Resources as one of its preferred bidders last month after the utility made a non- binding offer for a stake in the uranium explorer, Chang said.

The South Korean companies will make a binding offer after conducting due diligence on the Rossing South deposit and getting approval at the end of this month from an internal investment review committee, according to Chang.

Drilling at Rossing South suggests it could become one of the worlds largest uranium mines, Galloway said in October. The nearby Rossing deposit mined by a Rio Tinto unit is the third- biggest, according to the World Nuclear Association.

Overseas Acquisitions

Korea Electric is also keen to buy stakes in uranium mines in Africa, Mongolia, Australia and Europe, Chang said. The utility wants the investments to supply 3,800 metric tons of the fuel annually by 2020, equivalent to 50 percent of South Koreas requirements, Chang said.

South Korea currently operates 20 nuclear power plants and had imported its uranium mainly from Canada, Australia and Kazakhstan until Korea Electric invested in overseas mines last year. The nations annual uranium consumption may rise to 7,600 tons from about 4,000 tons currently, Chang said.

Korea Electric and its unit Korea Hydro & Nuclear Power Co. jointly acquired a 10 percent stake in a uranium mine in Niger for 170 million euros ($232 million) from Areva in December. Denison Mines Corp., a Canadian uranium producer, agreed in April last year to sell a 19.9 percent share in the company to Korea Electric for C$75.4 million ($74.3 million) and supply the utility with uranium until 2015.

Korea Electric will also provide uranium for the four planned reactors in the U.A.E for a period of almost five years, Chang said.

The company also plans to purchase a stake in a coal mine in the U.S. by as early as June and wants to invest in coal producers in Australia and Indonesia, he said. Chang declined to give details of the U.S. asset.

--With additional reporting by James Paton in Brisbane and Ben Sharples in Melbourne. Editors: Ryan Woo, Clyde Russell.

cyril

Australian Financial Review - March 23 - Page 27

Uranium Play Extracting Some Gains

By David Ciampa

Investors in small uranium play Extract Resources may not be too deterred by the Indian central banks decision late last week to raise interest rates, which accordingly caught the commodities markets off-guard. While the move may have clouded the global growth picture, Extract investors will be concentrating on the long-term demand for energy increasing especially from countries like India and the viability of the energy sources technology.

The stock was the standout performer in the S&P/ASX200 Resources index last week rising as much as 15 per cent, boosted by a 14 per cent jump on Friday amid reports that two Korean groups may make a joint bid for the Australian explorer. Extract owns the Rossing South deposit considered on of the world�s most promising uranium projects adjacent to Rio Tintos Rossing mine in Namibia, which both Korea Electric Power Corp and state-run Korea Resources Corp may make a joint bid for, or even extract itself.

As part of a soon-to-be completed strategic review, Extract has been talking to miners and uranium buyers about deals ranging from a stake in the project and an offtake agreement to a full takeover.

Extract, which is 16 per cent owned by Rio, was one of the best performers on the S&P/ASX200 index last financial year, surging more than six-fold.

But it has run out of puff in recent months and last weeks gain had the stock at its best level in about two months. Among other fast-growing economies, South Korea is one of a group of Asian countries with soaring energy needs and plans to add eight atomic plants by 2016 and export 80 reactors by 2030.

Korea Electric Power vice president Chang Joe Ok said the company was interested in the Rossing South mine in Namibia owned by Extract, but added that �pricing is the most important factor. The South Korean group is reported to be undecided whether to bid for a stake in the Rossing South mine or Extract Resources itself.

Canadian broker Haywood Securities has placed a $10.10 price target on the company.

Rio Tinto-controlled uranium producer Energy Resources of Australia also rose last week after noting that the global financial crisis had created a slump in new mine development that may lead to improved prices for the nuclear fuel.


I assume the Haywood Price Targget is in C$?

If so would be ~A$10.80.

cyril