UPDATE: Extract Books Uranium Resource Upgrade In Namibia
July 01 2009 - 10:17PM
Dow Jones News
Extract Resources Ltd. (EXT.AU) Thursday upgraded the resource
at the first zone of its Rossing South uranium prospect in Namibia
by about a third, confirming the venture as one of the world's most
significant uranium discoveries.
A sizable upgrade was largely expected and keeps a target firmly
painted on Extract's back, with takeover speculation around the
Perth-based miner already running rampant.
Extract said the resource in the first zone at Rossing South
increased to 145 million pounds of uranium oxide from the previous
statement of 108 million pounds, while the overall resource grade
increased to 449 parts per million of yellowcake.
Rossing South is six kilometers away from the massive Rossing
uranium mine that's jointly owned by Rio Tinto Ltd. (RIO.AU) and
the Namibian government, and which produced 8% of the world's
uranium oxide in 2008.
Extensive exploration potential is still to be tested at the
first zone of Rossing South and the maiden resource for the second
zone is due August, Extract said.
"Once the Zone 2 resource estimate is completed, Rossing South
is expected to be one of the top 10 global uranium deposits by
contained metal," Extract said in a statement.
By 0135 GMT, Extract shares were up 2.9% at A$6.42 compared with
a 0.4% rise in the benchmark S&P/ASX 200 index. They were
hovering around the A$1.00 mark in December.
Promising assay results and corporate activity has driven the
share price rally with major shareholder U.K-based Kalahari
Minerals Plc (KAH.LN) and significant shareholders Rio Tinto Ltd.
and Stephen Dattels' Polo Resources Ltd. (PRL.LN) all jostling for
position on Extract's board.
Interest in uranium is increasing as Asian countries plan to
install vast amounts of nuclear power and some European countries
lift bans on nuclear power.
Consequently, some analysts have suggested Extract could also be
bought by Chinese or Indian state interests, France's Areva SA
(CEI.FR) or Canada's Cameco Corp. (CCO.T).
Tony Parry, analyst at Resource Capital Research, on 15 June
said Rossing South had major exploration upside beyond 250 million
pounds, with a minimum 300 million pound resource more likely.
He's valued Extract at A$7.50-A$8.00 a share.
-By Ross Kelly, Dow Jones Newswires; 61-2-8235-2957;
ross.kelly@dowjones.com
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