Paladin leads $200m uranium onslaught
The wave of consolidation sweeping the uranium sector gathered speed yesterday as emerging heavyweight Paladin Resources readied for a $100 million-plus deal in Queensland and Canadian predator Mega Uranium unveiled a friendly $100 million bid for Perth junior Redport.
The deals coincide with record uranium prices above $US45 a pound and come just two days after Hong Kong investment bank Crosby Capital Partners launched a hostile $33 million bid for South Australian uranium explorer Marathon Resources.
Paladin, the $2 billion Perth miner about to start production at its Langer Heinrich mine in Namibia, yesterday called a trading halt in tandem with Resolute Mining-controlled Queensland explorer Valhalla Resources ahead of a pending ”material transaction”.
It is understood Resolute is negotiating to sell its 83 per cent stake in Valhalla to Paladin. Valhalla shares last traded at $1.22, valuing Resolute’s stake at just over $120 million.
Valhalla’s primary asset is its 50 per cent stake in the big Valhalla and Skal uranium deposits near Mount Isa, where it is in joint venture with Perth-based Summit Resources. It also holds 41 per cent of the Bigrlyi deposit in the Northern Territory.
The Valhalla resource is one of the biggest untapped deposits in Australia, with a total resource of 25,600 tonnes of contained uranium oxide, while Skal contains about 5000 tonnes.
The acquisition, expected to be announced on Monday afternoon, will give Paladin its first substantial asset in Queensland, where Peter Beattie’s State Labor Government is considered likely to drop its ban on uranium mining long before any change of heart by WA Premier Alan Carpenter.
Paladin’s chief focus remains on Langer Heinrich and the Kayalekera project in Malawi, but it has made no secret of its desire to start mining in Australia within five to 10 years. But its primary local assets, the Manyingee and Oobagooma deposits in WA, remain untouchable under current State Government policy.
Analysts said yesterday the sale of Valhalla had been expected ever since Resolute flagged its intention to develop the $US120 million ($161 million) Syama gold project in Mali. Resolute chief Peter Sullivan yesterday declined to confirm that a sale of the company’s interest in Valhalla was imminent, but said the company was looking at ”all available options” to secure funding for Syama.
”We have signalled we are considering all sorts of ways of raising money for Syama, whether it be debt, an equity issue, asset sales or a combination thereof,” he said. The prospect of an imminent cash injection sent Resolute shares racing 14 per cent higher to $2.18, while shares in partner Summit also spiked 14 per cent to $1.49.
Yet the prospects of a trouble-free deal with Paladin appear unlikely, given Summit’s own desire to consolidate the Valhalla and Skal projects.
Summit managing director Alan Eggers said yesterday Summit was watching the situation closely, however, the company is believed to have sought legal advice on its pre-emptive rights to Resolute’s interest in the joint venture.
But it is believed Resolute may be able to sidestep Summit’s pre-emptive rights by selling its interest in its subsidiary companies rather than the joint venture interests.
Redport shares surged 23 per cent to 13.5Â¢ after it unveiled Mega Uranium’s 14Â¢ a share offer.