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URU hold 27.68 million shares(16.6%) in Kalahari Minerals(KAH) which hold a large stake in the Aussie company Extract(EXT) the holder of the licence to work the Rossing
South, which have turned out to be one of the largest uranium deposits in the world.
RIO who have the site are investing heavely in both companys and it seems will
make a take over bid in th not to distant future? A couple of posts which give an idea whats what,

Excerpts from the Hanson research note on Jan 29th 2009 relating to company valuation:


For the purpose of our valuation we have used the long term $80/lb price and the current $/� exchange rate of $1.40/�1.00. Other assumptions include:
� Cash � URU currently has �1.4m in cash (1.3p per share) and no debt. We believe that this is enough to fund the company�s activities until July/ Aug 2009

� Kalahari Minerals � The total market capitalisation of Kalahari Minerals is �77.83m. At the current share price of 43.5p, this makes Niger Uranium�s 27.68m shares worth �12.04m or 10.64p per share.

� Henkries project - Niger Uranium has an NPV15% for the project of US$150m before tax. Our own valuation based on the original 3.72Mlbs estimate is US$17.43m after tax. As no resource has been defined we apply a x0.6 discount to NPV, which equates to 4.89p per share for their 74% stake.

o If Niger Uranium can define an 11 Mlbs resource we calculate an NPV of $102.87m after tax or 28.83p per share again at a x0.6 discount for risk. Neither valuation includes any upside for the unsampled Henkries South.

� Niger project - We don�t believe that this is economic as a standalone project at this grade and tonnage. The grades are low but are typical for the region being similar to those at Imouraren and Arlit. However, with Niger Uranium continuing its exploration drilling with two rigs currently on site, the company could increase the tonnage significantly.

o With existing operations in the area including those of Areva and China Nuclear International Uranium Corp., we believe that the most likely scenario is that URU�s Niger project assets will be acquired by an existing producer. The Paladin (ASX:PDN) and Fusion Resources (ASX:FSN) deal in late December 2008 provided an indicated value to resources of US$1.97/resource lb. On this basis and factoring in assumed recoveries and a x0.5 discount due to the perceived risks in Niger, we arrive at a value of �2.35m or 2.1p per share for the Niger project.

� Argentina UrAmerica � This is more difficult to value as it is a private company. However, Niger paid $2.5m and 4,664,306 new shares for its interest which would value the stake at �2.3m or 2.06p per share.
Conclusion

Our total sum of parts value is 20.90p, which does not include any share holder dilution caused by any subsequent fund raisings. It also does not include any upside for Henkries North and South, the Niger exploration or expected upside in the value of the company�s Kalahari minerals stake when the full resource is announced by Extract Resources.

Given KAH's sp increase, the 27.68mln shares is currently worth 17.7p per share (at KAH = 72.5p), which would increase the valuation to 28.02p per share.

And - If they can get the 11 Mlbs resource from Hankries, then this would increase the sp to 51.96p per share.

So currently they are trading at a discount of 12p (or 75%) to the current mid price.


if RIO pay �5/lb of U based on the forsys/forrest deal then KAH holding in EXT would be worth around �300M. URU holding is worth around �45M at this price. by all accounts the grade at Rossing South is high grade and superior to the forsys/forrest U grade so a price equivalent to this deal is not pie in the sky in the slightest. In fact you could argue EXT should be asking more for its Rossing South asset


Right, here's what I reckon is going on.

EML is Dattels & Mellon's vehicle, aligned with URU (which they also have interests in).

There is a big battle on at EXT right now, to determine the Board composition. Whoever gains contol of EXT's Board will do the final negotiating with RIO (or a.n.other, e.g. Areva, Chinese, Russians - all may be interested, I understand) concerning either a sale or a JV to exploit Rossing South.

With over 40% of EXT's votes, KAH's votes are crucial in determining the outcome of that battle... so, whoever controls KAH effectively controls EXT. At present, IMV Dattels, Mellon & co control KAH via URU and EML. ISTM, from his statements and past actions, that Hohnen has aligned himself with them. When he said on Tuesday "Clearly certain Kalahari shareholders voiced the same concerns when they refused to endorse the potential merger between Extract and Kalahari over concerns that Rio Tinto could emerge with a controlling interest.", that's who the "certain shareholders" are. RIO are trying to dilute that control by buying KAH shares themselves. EML's move is a fightback to retain/strengthen Dattels, Mellon & co's position.

From RIO & Dattels' POV (and mine :0)) these shares are still cheap, so they don't mind paying up now to reinforce their positions for the endgame.

The last posts were c&p, from very capable investors.

A quick way to value URU's holdings in KAH is multiply its SP by 24.4%

http://www.freesharedata.com/eml


cyril

hsbc invest direct is 6.95 irrecpective of size of trade provided there is a minimum of i think 3 or 4 trades in a quater if fullfiled then each trade is 6.95 .find it good so far .
at one time they did not buy at the limit price they caught up with the mistake and gave me aprox 400 .
never thad that happen with anyone else .genuinely good recommend them .till now i buy and sell minimum 3-4 trades a day .

Thanks Cyril, BB and Chakli for advice on brokers.
I managed at last to place my URU buy (39p) so just hope that it proves successful (win some, lose some but don't lose sleep is my motto). Best wishes.

Clive no loss of sleep needed,at present Rossing 1 & 2 +Ida have 292mlbs
of high grade U. This works out less than US$7/lb,it's not unreasonable to expect almost a doubling of this figure(CEO has stated 500mlbs),so cheap
as chips imho as the take out $/lb expected at $10 which "could" mean upto 150p value(via EXT)to URU.Come year end we should have a far better picture of the resouce,which is less than 3 months away.
cyril

Some may see my last post as a ramp,for me it's more projected figures which are possible? Lets compare some conservative projects to add balence.

1 At present their 235m EXT shares after the recent placings.
2 The SP is A$9.65 which gives us a M/Cap of A$2267.75m
3 Convert to US$ for ease of calcs times 0.9044 = US$2050.95m
4 $2050.95/292 =$7.02/lb
5 7.02*500m=US$3511m
6 3511*0.4088 (KAH's share) =$1435.67m
7 1435.67*0.6345 =910.93m M/Cap of KAH
8 910.93/209 =4/36p
9 4.37*27,68m =120.m
0 120.4/117.5 = 1.025p
So i make 1.025 the projected figure at the present rate.
A little long winded i know,but it's how i work.
cyril
ps. They also have URA and Niger projects for extra value.

Hi Cyril, still holding, lurking in the background, keep your very informative posts coming please, Thanks.

Clive, I've been with the Share Center since 2005 with no real problems. can't comment on T20's and T25's etc. but can say this is a very undervalued stock and your purchase at 39p looks very safe to me, good luck.

An interesting article,

12 October 2009
The West Australian
TWAU
First
33
English
(c) 2009, West Australian Newspapers Limited

Good staff are hard to find at the best of times.

Spare a thought for Extract Resources, which has been on the hunt for a Namibian-based chief executive and a Perth-based managing director since June, when a long-running squabble with its biggest shareholder, Kalahari Minerals, cost Peter McIntyre the top job. Extract is understood to have tapped someone for the Namibian role an appointment is expected as early as this week.

The question of who will take on the Perth-based role remains unanswered, a month after Mr McIntyre officially stepped down and nearly four months since he flagged his intention to do so.

The task facing incoming management is not an easy one.

Extract has become something of a market darling over the past year, since Rio Tinto swooped to pick up a cornerstone stake. The subsequent corporate wrangling may have overshadowed the groups success in Namibia but its flagship Rossing South deposit is widely regarded as one of the best uranium deposits in the world.

Those credentials were reinforced on Friday when the company said it had discovered a zone of mineralisation on the projects western limb (previous mineralisation discovered at zones one and two is predominantly on the eastern limb of Rossing South). Extract is talking about a 500 million pounds resource, which would support a 15 million pounds of uranium a year operation.

But getting a new mine up and running is one thing, dealing with corporate politics quite another.

Not only will the groups new boss have to juggle the interests of Rio, Kalahari and Stephen Dattels Polo Resources, which between them control 65 per cent of the company, but they will almost certainly be faced with a takeover bid within the next 12 to 18 months

Rio is widely expected to make a bid, given its Rossing mine borders Extracts Rossing South deposit, but there has also been speculation it could face an approach from a third party.

Interested bidders are likely to want to move sooner rather than later. Extract shares are up 606 per cent this year alone, valuing the group at $2.2 billion.

A S Dattels choice no doubt?
cyril

Should hopefully see some movement today,EXT uo at A$10.01 on good volume highest this week.
cyril

Good morning Cyril, I have been trying to fully understand the whole ext-kah-uru-eml financial situation and politics and although I feel that I basically understand what is going on I still have a few things that I am not clear on and wonder if with your greater knowledge you can enlighten me:
1. In you posting of 20 feb you mention that "URU hold 27.68 million shares (16.6%) in Kalahari Minerals(KAH)" but I note that on the freesharedata site link that you give that UHL now shows as holding 13.2% of KAH..??
2. I note that Dattels is co exc chmn of EML and also on the EXT board but how does effect his control of the URU stake in KAH (thus EXT) as you mention - he is not shown as a URU board member..??
3. Why does URU only have an acting ceo and no chairman..??
4. On the freesharedata link EML shows a larger discount (42.5%) to "effective EXT hldg" than both URU (35.8%) and KAH (18.3%) - is there any reason for this difference especially that to KAH which is well under half..??
Regards, Clive

Hi Clive,
Q1 KAH has rasied funds via placings,so their 190k to 209k,hence the 27.68 is a smaller percentage.
Q2 SD is a major Canadian miner investor part of a group of who have cleaverly worked around the rules. Each a part of a larger picture,the RNS stated SD interest was via PRL.
Q3 I think if my memory serves me correct,he bridged a gap?
Q4 NoT so easy to explain, KAH is rhe main player by it's 40.88% holding,
URU is a secobdary holding(nursery)and will always trail KAH in value while the present sitution exists,buT at the end game the discounts should disappear? Sentiment is one reason for the difference in calues and can
giVe a buying opportunity on times.
cyril
PS for more info on SD and thr other CEO;s try goggle and another
site i use to check on news(old and new) is investegate.co.uk (note the "e")
cyril

Hi Cyril,
Thanks for info/explanations and I have checked out the 'investegate.co.uk' site that you mention (very useful) and see the RNS for the PRL holding in EXT (that you mention in Q2 above) which it gives it at 9.06%
This PRL holding when added to the KAH holding of 40.88% amounts to 49.94% and as such then the EML holding of EXT at 0.17% is crucial as it takes the total over 50% (50.11%) - I must admit that I found the small EML holding hard to comprehend but if my calculations are correct then it could be pivotal..??
What do you think..??
Regards, Clive.

Clive sorry i'm late in getting back to you,my mother just passed away. Don't forget the RIO stake,which effectively takes control from EXT. Notice they were down on the ASX not that i'm surprised,they've made great gains this year and probably will tread water until we get a resource update etc? So patience is now the name of the game,the ground work has been done and unless URU's management is able to (in their words)reduce the discount and icrease shareholder value,we also can expect a little pause or even a slight pull back??
aimho
cyril
ps. CHL is looking cheap???

sorry to hear news cyril..

Also sorry to hear your news Cyril - my mum passed away many years ago whilst I was overseas and I still have regrets (even after so so long a period) that I wasn't there her at the time.
Keep you chin up - best wishes Clive.

From the Brisbane Times,

EYES ON EXTRACT

In light of the high quality of Extract Resources's Rossing South uranium project in Namibia - adjoining Rio Tinto's Rossing mine - there is obviously plenty of corporate interest in the $2.4 billion company.

However, Extract has made clear that while it is interested in strategic partnerships to help develop the $US704 million ($768 million) mine, which could produce 6800 tonnes of uranium a year, it is not looking to be taken over.

Extract has a very concentrated register. Kalahari Minerals of London, now in effect a holding company, owns a 40.9 per cent stake, Rio Tinto owns 15.1 per cent and Polo Resources of London owns 10 per cent.

There are suggestions that as part of the search for a strategic partner, led by Rothschild, the parties that have signed confidentiality agreements have also agreed to standstill arrangements preventing them from buying Extract shares.

Rio is believed to be among those interested in a partnership, because there are obvious cost savings available due to the proximity of Rossing South to the Rossing operation. The Rossing South ore has a higher grade than the material Rio is processing.

Extract will have plenty of uranium to sell once Rossing South enters production in 2013, so its primary concern in a joint venture is being able to place the material with customers rather than raising the funding for construction.

In recent months the uranium miners Uranium One and Denison Mines have partnered with a Japanese consortium and Korea Electric Power respectively for funding and offtake partnerships.

Extract's potential product is already said to have attracted interest from uranium buyers in China, India, South Korea and Japan, so miners may not be the only ones taking part in the search for a partner. Extract is targeting a resource of at least 227,000 tonnes, which would make it the second-largest uranium deposit in the world behind BHP Billiton's Olympic Dam.


Everything has a price? New CEO appointed for Nambibia Norman Green


Interview with Bloomberg,

Oct. 16 (Bloomberg) -- Extract Resources Ltd., a uranium explorer whose shares have surged almost eightfold in Australia this year, said it has been inundated with requests from companies proposing to join or take over its Namibian project.

Were looking at options to see whether one of the big players would want to come in on a strategic partnership level, Chairman Steve Galloway said in an Oct. 13 telephone interview from Namibia. Extract is being advised by Rothschild, the largest family owned bank, and may ask shareholders in November to consider proposals to bring its Rossing South mine to production, he said. He didnt name any potential partners.

Extract, 15 percent owned by Rio Tinto Group, has gained more this year than any other stock in Australias S&P/ASX 200 Energy Index as investors bet countries will turn increasingly to nuclear power, using fuel derived from uranium, in response to climate change. Drilling at Rossing South suggests it could become one of the worlds largest uranium mines, Galloway said.

Investors are jostling for a piece of the action, said Gavin Wendt, an independent resources analyst who has followed Extract for three years and met with executives from the explorer in the southwest African country about two months ago. A joint venture, possibly with Rio, may be the most likely scenario, he said, adding that the stocks remarkable ride has driven up the potential acquisition cost.

Extract Resources has told suitors were not for sale, Galloway said. Rio Tinto doesnt comment on market rumors or speculation, Tony Shaffer, a spokesman for the company, said by phone from Melbourne yesterday.

Fund Raising

The stock traded at A$10 at 11:10 a.m. in Sydney, valuing the company at almost A$2.4 billion ($2.2 billion), compared with about A$311 million at the end of last year.

The Perth-based explorer may sell more than $700 million in shares and debt in 2011 to bring the Rossing South mine into production, Galloway said. Thats in addition to A$91 million it raised this year by issuing equity.

The Australian company has appointed a chief executive to run its Swakop Uranium subsidiary and oversee development of the mine. Galloway declined to name the person before an announcement due today. Extract also expects to replace Managing Director Peter McIntyre, who stepped down in September, by early next year, he said.

Extract said Oct. 9 it found new high-grade mineralization at Rossing South and estimated the total uranium resource could reach 500 million pounds. The deposit is about 7 kilometers (4.4 miles) from Rio Tintos Rossing mine and approximately 30 kilometers from Paladin Energy Ltd.s Langer Heinrich project.

No Bad News

We keep finding better and better resources, said Galloway, a former mineral economist with the Namibian government. We havent seen bad news yet.

London-based Kalahari Minerals Plc, which owns about 41 percent of Extract, said Oct. 9 the project potentially could rival the worlds biggest known uranium deposit at BHP Billiton Ltd.s Olympic Dam. BHP wouldnt provide an estimate in pounds.

Even before the latest drilling results, Brock Salier, an analyst at Ambrian Partners Ltd. in London, said in research notes that he was confident Extracts resource could exceed 560 million pounds. In an e-mail yesterday, he wrote that the update from Extract showed not only some of the widest, but highest grades, weve seen to date.

Rossing South may be able to produce more than 15 million pounds of uranium oxide a year, a huge amount, Galloway said.

Profitable Business

A possible risk to profits is that a lot of other uranium comes on stream, curbing gains in the price of the nuclear fuel, he said. But I think, over the long run, uranium will be a very profitable business.

The uranium market will have a surplus next year for the first time in at least three years as producers increase output faster than demand rises, the London-based World Nuclear Association said in a Sept. 10 report. Secondary sources such as stockpiles will supply 18,711 metric tons in 2010 compared with 17,620 tons this year, the report showed.

Uranium prices, which peaked at $136 a pound in 2007, rose 5.7 percent in a week to $46 a pound on Oct. 12, Ux Consulting Co. said in an Oct. 13 report.

Extract expects favorable supply and demand conditions when Rossing South is projected to begin production in 2013, Galloway said. By 2013, 2014 there will be a space for new uranium on the market.

Some 440 commercial nuclear power reactors operate in 30 countries, with a further 30 under construction and another 90 planned, the World Nuclear Association said in a March report posted on its Web site.

Galloway said the company is at a crossroads as it explores partnership options and considers whether to expand beyond a single project in a single country. For now were trying to get on with developing the resource as fast as we can, he said.

To contact the reporter on this story: James Paton in Sydney jpaton4@bloomberg.net.

Cyril

Food for thought in this present market,

......Few interesting observations from the annual report shareholder distribution and top 20 shareholders tables.

1. The % of issued capital held by top shareholders (>100,000 shares) increased from 86.07% to 91.16% between September 2008 to September 2009. These results clearly show significant transfer of shares from weaker to stronger hands and demonstrate how tightly EXT shares are currently held.

2. The % of issued capital held by shareholders with shares in excess of 10,000 increased from 95.57% to 96.83%. However, the total number of shareholders reduced by 30% (i.e. from 773 to 541). These figures confirm that shares are being transferred into fewer hands.

3. The number of shareholders with less then 1,000 shares has about doubled to 1,149. These are likely to be late comers, traders and people who dont have strong financial capacity but still want to be part of the action. They hold 0.27% of total issued capital at an average of 530 shares/stockholder.

4. Majority of top 20 shareholders have not sold any shares and the % of shares held under nominees accounts keeps increasing. Once again this suggests progressive transfer of shares to the so called sophisticated investors. With the inflow and outflow of shares between nominees accounts being very similar it is very likely that shares are just being transferred from one account/fund to another.

In summary, in a tightly held shares company when the fair value has been reached, one would normally see increasing register of smaller shareholders who are picking up shares being offloaded by major players (i.e. distribution phase). This is still not the case with EXT (in fact its quite the opposite) which strengthens the notion that there is still significant potential for SP growth above current levels. Therefore, recent SP games are simply a continuation of the slow and painful process of accumulation or transfer of shares into strong hands by taking advantage of basic human vulnerabilities/weaknesses in particular greed and impatience.

I believe that recent 1 : 35 rights issue is unlikely to have changed the above results by much as most shareholders took up their entitlements.

Regards,
Drag

Taken from an aussie bb.
cyril

Niger Uranium announces that the Company proposes a conditional dividend in specie of substantially all of its stake in Kalahari Minerals.

The proposed Special Dividend constitutes a fundamental change of business for the Company which, under Rule 15 of the AIM Rules for Companies, requires Shareholder approval.

Following the Special Dividend (if approved), the Company will continue to hold 2,680,000 Kalahari Shares and its exploration licences in Niger together with its interests in South America and shall continue to operate its business in line with its stated strategy (as adopted at the time of Admission) as a uranium exploration and development company.

Not sure on how this works out,from reading around it seems 36p for the sale of KAH+ the 2m they hang onto+ cash 4?+ Niger and + URA,makes for a value into the mid 40p's. If we hit 42p then i will sell as it's above my understanding and look for another way in,maybe. PRL or even KAH which might fall with all this going on?
Its good news but a little complicated for me,so as i stated i will look for a exit point and wait and see.
A confused
cyril

Just as confused as you Cyril. I noticed an interesting comment on another site regarding how any gain would be taxed if one took the KAH shares - would it be at the higher rate on dividends as opposed to the standard CGT..?? Copy as follows:

"Is the special divi classed as a Dividend for tax ie 40% or whatever or does it act like you havent sold any or as CGT??
Im confused, but if its taxed as a proper divvi then id rather take the CGT gain by selling before the date, as i have plenty of losses still from last year!"

Do you have any thoughts as to how all this may play out on EML..??

Clive.

Clive;sorry can't help on those issue's. As far as EML is concerned, not taken enough interest to comment,more PRL who hold a large stake in EXT and will be looking to increase my holdings as its undervalued on known assets.Will be interesting to see what happens tomorrow although the markets are volitille at the moment?
cyril
ps might if i sell, top up CHL as i see it a no brainer?

Just found this,
Valuation
In our valuation, we have assumed that the 8.5m URU shares held in escrow will be cancelled and only 6,943,667 of the outstanding options will be excised. This results in 115,947,967 shares being eligible for the special dividend.
URU currently holds 27,680,000 Kalahari shares and plans to retain 2,680,000. This leaves 25,000,000 for distribution equivalent to 21.56 Kalahari shares per 100 URU shares. This is an increase on the 20.66 Kalahari shares previously announced due to fewer options being excised.
Our valuation of URU at the current Kalahari share price of 178.28p per share, is 45.28p per URU share. If we include the $4.28m valuation for URUs Niger assets and our 1.53 valuation for UrAmerica, this rises to 49.13p per share. However, post the special dividend, we do not believe any value will be given to these assets and we expect the post Special Dividend share price to be 6.5p.

Conclusion
The proposed Special Dividend still needs approval at shareholder meeting on 24 November 2009. However, we believe this is a great opportunity to release value to shareholders. Even attributing zero value to the companys other assets, the 45p target price pre-Special Dividend (6.5p post) represents a significant premium to the current share price and hence we maintain our BUY recommendation.

Still holding and will continue to do so for 42p+,easy 10% from where we are,not to be sneezed at.
aimho
cyril