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.

EXT up 10.93% in Australia!

KAH has been a rather dozy performer, but sp is now nicely challenging 200 dma ..... Q is, "will it make a break for glory at last?"

cynic: I think you could be right!

looking a healthy spike up at the mo.,.

There are suddenly a lot more buyers coming in, which I haven't seen in a long while.

Put this to bed for a year....and now hey presto....wakey...wakey..it's coming to life...by the way..anybody "au fait" as to the price of uranium ?...not been following....

Uranium price seems to be slowly creeping up at the moment RF, around the $49 per pound mark. A long way below it's 2007 peak of $136 because there has been plenty of it around: that won't last though, demand is set to increase.

Thanks....plenty of nuclear power stations throughout the world set to be built, and all the uranium from old missiles has been used up from what I understand.

Quite right!

EXT.AX 7.50 +0.30 +4.17% , Kalahari up 3.1% and still climbing!

EXT.AX 7.85 +0.35 +4.67% today: Time for KAH to catch up!

Just had a look at KAH's major shareholders and the profile of their latest substantial holder APAC Partners of Hong Kong.

Key Shareholders
Nippon Uranium Resources Australia Pty Ltd 33,781,505 14.94%
Rio Tinto International Holdings Australia Pty Ltd 28,267,310 12.50%
APAC Resources Capital Limited 27,454,377 12.14%
M&G Investment Management 20,900,000 9.24%
Henderson New Star 12,491,234 5.54%
Blakeney Management Limited 11,060,900 4.89%
...
APAC Resources Limited ("APAC") listed on The Stock Exchange of Hong Kong Limited (stock code: 1104). APAC and its subsidiaries are principally engaged in (i) trading in base metals and commodities; and (ii) trading and investment in listed securities with a portfolio primarily focused on natural resources and related sectors and industries.

APAC's investment strategy is to generate above average returns via identifying and investing in resource companies that have potential to generate long-term sustainable cashflows and, hence, significant capital appreciation. Core investments include Mount Gibson Iron Limited (ASX: MGX) which mines iron ore in Western Australia, and Australia's largest tin producer, Metals X Limited (ASX:MLX). Other investments include Kalahari Minerals Plc (AIM:KAH) which has an interest in one of the world's largest undeveloped uranium deposit. APAC also runs a commodity trading division.

"Our mission is to be the pre-eminent resource investment house in Hong Kong and to provide long-term growth to our shareholders by pursuing high quality investments globally."

Nice looking chart and put me in good money so far, still no news but loving it.,.

BUY EXT PT $10.80 (Price: $6.94; Market Cap: $1.68b)

-The recent rally in uranium stocks in the past few days is attributed, in our view, primarily to the sustained creeping of the uranium spot price since August 2010. The U308; price has increased 15% from US$42/lb in August 2010 to the current level of US$48.25/lb.

Spot Uranium Price
Source: Bloomberg

-China's latest official objective of achieving 5% of total electricity from nuclear power by 2020 has given rise to a significant ramp up of nuclear reactors. An estimated ~78 gigawatts of nuclear energy needs to built in the next ten years. The magnitude of the expansion in
nuclear power in China is enormous. Currently there are:

- 11 reactors in operation (8,602 MWe);
- 16 reactors under construction (15 GWe in new capacity);
- 250+ planned new reactors.

-No doubt there is a scramble to secure long term contracts for uranium oxide to fuel the reactors. However, with the spot uranium price below its long term average this provides, in our view, an attractive buying opportunity for the Chinese. According to Trade Statistics, Chinese uranium imports for the year up to August 2010 have been 2.5x higher than the same time the previous year (9,890tU vs 2,853tU).

China Reactor Forecast
Source: UxC

-The stocks we favour in the current environment are the uranium exploration companies,most notably Extract Resources (EXT), Peninsula Minerals (PEN) and UraniumSA (USA).

-Energy Resources of Australia (ERA) we continue to view as the laggard and Paladin Ltd (PDN)we have downgraded our recommendation from HOLD to SELL.

-Extract Resources (EXT) - Price $6.94; M Cap $1.68b; Buy (PT $10.80)

EXT, with its vast uranium reserve in Namibia, is poised to become one of the top producers of uranium oxide globally. The recent resource upgrade has allowed for more accurate mine planning and a more definitive and bankable feasibility study.

Our DCF based valuation for EXT is $10.22/share and our one year-forward valuation is $10.83/share. Our EXT valuation is derived using a DCF for Zones 1 & 2 of Rossing South where a 267mlb Resource exists and valuing the target resources by applying a multiple of US$5/lb of uranium in the ground (using the midpoint of the exploration target of 235mlb).

The catalysts remain the DFS due 4QCY10 and further resource upgrades expected 1QCY11.

http://www.fostock.com.au/talkingpoint/Uranium101019.pdf

Extract Says Itochu 'Interested' in Husab Uranium

November 04, 2010, 2:33 AM EDT By Jason Scott

(Updates with share price in seventh paragraph.)

Nov. 4 (Bloomberg) -- Extract Resources Ltd., the uranium explorer partly owned by Rio Tinto Group, said Japanese trading house Itochu Corp. wants to purchase production from its Husab mine in Namibia.

"Itochu is very interested in taking offtake," Chief Executive Officer Jonathan Leslie said in an interview in Perth today.

Extract, about 15 percent owned by Rio Tinto, aims to develop the world's second-biggest uranium venture after Cameco Corp.'s McArthur River mine in Canada. The company intends to gain from a nuclear-power revival as countries turn to the technology to meet energy demand and cut emissions.

Itochu agreed in July to buy a 10.3 percent stake in London-based Extract to benefit from global growth in demand for the fuel. It now holds 13 percent, according to data compiled by Bloomberg. The stake purchase "doesn't restrict us in any way, it just gives us more options," Leslie said.

The two companies are in talks about Itochu helping to develop the Namibian project's desalination plant, Leslie said.

Extract gained 3.2 percent to A$8.15 at the close in Sydney trading, while the benchmark S&P/ASX 200 Index rose 0.5 percent.

Extract Resources in talks with Japanese trading house Itochu Corp.to purchase production from its Husab mine in Namibia. Itochu is very interested in taking offtake, Chief Executive Officer Jonathan Leslie of Extract Resources Ltd

With regards spot price development of uranium and the position of Kazakhstan:

"We can see a gap opening up in the market in two to three years, Leslie said. The belief is Kazakhstan is getting toward the end of the period where theyve got the easy stuff, the low-hanging fruit, so their costs are going up.

More at: http://www.businessweek.com/news/201...b-uranium.html

Not just Itochu it seems. Culled from the EXT board:

UPDATE: Japanese Companies Eye Namibian Uranium Deposit
Extract Resources (ASX:EXT)
Intraday Stock Chart
Today : Friday 5 November 2010
Extract Resources Ltd. (EXT.AU) said Thursday that a recent investment in the company by Itochu Corp. (ITOCY) has spurred significant interest from other Japanese entities in its Husab uranium prospect in Namibia.

One of the world's largest undeveloped uranium deposits, Husab is just six kilometers away from the massive Rio Tinto Ltd.-operated (RTP) Rossing uranium mine. It was originally called Rossing South but Extract has changed its name to Husab to avoid confusion.

Japan generates about a third of its electricity from nuclear power and other countries including the U.S. are turning to the energy source to reduce fossil fuel consumption.

China is undertaking a massive expansion in nuclear power, expanding its current nine gigawatts of nuclear capacity from 11 reactors to 70-80 GW by 2020 and 200 GW by 2030.

Extract, which counts Rio Tinto as a 15% shareholder, last year hired Rothschild to conduct a strategic review of its business. Options include building a stand-alone mine, forming a joint venture with the Rossing mine or bringing in more strategic investors.

The Perth-based company said Thursday that its base-case remains to develop Rossing South as a stand-alone project.

Still, it said it continues to hold discussions with external parties, with a number of groups continuing to show interest in the project.

A 10.3% investment in Extract by Itochu has led to "significant interest from other Japanese institutions" and some have visited the project, Extract Chief Executive Jonathan Leslie said in speech notes prepared for the company's annual shareholder meeting.

Japan's Foreign Affairs Secretary Osamu Fujimora has also visited the southern African nation and met Namibia's prime minister, Leslie said. "Good relationships are in place and we continue to enjoy the government's support for this project," he added.

Concerns the Namibian government could wrest control of the project from Extract have weighed on its share price but the company has consistently played down those fears.

It said a project feasibility study for a stand-alone development is now due in the first quarter of 2011, back from its previous guidance of the end of 2010. "Our target for plant commissioning is the first quarter of 2014," Leslie said.

-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692; Ross.Kelly@dowjones.com

Up she goes!

Chugging along very nicely..

Going well again!