Australia's Uranex Attracts New Interest In Key Project-Source

Junior uranium explorer Uranex Ltd. (UNX.AU), which has previously said it was discussing with potential Chinese partners options to help develop a key project in Tanzania, has attracted further interest from nuclear energy companies in North America and elsewhere in Asia, a person close to the company said Monday.

At least five parties have in recent weeks expressed a serious interest in either jointly developing the Mkuju uranium project or buying it outright, the person told Dow Jones Newswires.

The flurry of approaches received by Melbourne-based Uranex comes amid resurgent interest in uranium deposits that potentially could feed a fleet of new nuclear reactors that countries including China, India and Russia plan to build.

Early this month, Uranex said negotiations with finance and nuclear companies based in China were advancing, as it looks at opportunities including the joint development of the Mkuju project and related infrastructure.

The person said these discussions continue.

Mkuju, located in southwest Tanzania near the borders of Mozambique and Malawi, includes 12 granted licenses plus applications covering an area of roughly 4,000 square kilometers. The Likuyu North prospect was drilled last year and Uranex, which has a market value of roughly A$65.7 million (US$70.6 million), expects to complete a mineral resources estimate by the end of March.

While the temporary closure of nuclear energy capacity in Japan following the devastating earthquake last year means current uranium production appears sufficient to meet demand, industry participants expect that to change in 2013 when a U.S. deal with Russia to convert decommissioned nuclear warheads ends. Fuel from the warheads accounts for roughly 15% of annual global uranium supplies.

China has embarked on a major expansion of nuclear power to reduce its reliance on burning coal for electricity. The country has 13 civilian nuclear reactors in operation, and an additional 27 under construction.

Australia's Toro Energy Ltd. (TOE.AU) last month said it was holding talks with Asian investors interested in taking an equity stake in its Wiluna uranium project in central Western Australia state or developing the deposit as a joint venture.

Extract Resources Ltd. (EXT.AU), which is developing the Husab uranium project in Namibia, is expecting a A$2.2 billion takeover bid from China Guangdong Nuclear Power Corp. and China-Africa Development Fund by March 1. The pending offer has been triggered by Australian takeover rules after the Chinese companies bought control of London-listed Kalahari Minerals PLC (KAH.LN), whose primary asset is a nearly 43% stake in Extract.

-By Robb M. Stewart, Dow Jones Newswires; [phone]; [e-mail]