Kalahari Minerals Share Discussion Threads

[tebbin] 11/3/2011 08:18

Martylangan......Its as though the KAH BOD have made a decision now they have got the share price at a higher level..lets move on and not maximise it further.....

Why is the resource level still at the figure Aug, 2010? this is seven months down the line..
They have data on this which is share price sensitive and it has not been released to the LSE....

In principle every shareholders vote on issues is equal..

[martylangan] 10/3/2011 19:20

...£2.90 does seem a very poor bid considering the size of the resource, grades and the amount of unexplored licence area.

At the moment, I still cant get my head around why the board would support a it unless they were trying to force a bidding war? Surely they would have considered Rio having an easy route in by working with the Chinese if they succeed with their bid??
If the major shareholders reject the bid of 290p, how long until China can bid again? Is it 12 months?

[tebbin] 10/3/2011 17:56

We now know why the DFS was delayed.....If this had been realeased with all the options in the public domain...we would then have the facility to make a decision on those options....this was promised by the BOD of KAH..

If the DFS had been realeased the offer for KAH would be based on the potential and the resource and not on some computer generated share price which has happened day after day...The LSE should block this deal as being against their spirit of fairness...

We are not discussing the possibility of 500mlbs X US$70 spot price or the fact they have only explored half of the licence in spite of having over 20 (average) rigs on site for the last year now.... it is average of the share price ......

All shareholders are being short changed whether they are Major or P/I's with a £2.90 offer....

Fullfill your promise to work in the shareholders interest KAH!!!!!!

[krakow] 10/3/2011 14:41

Hopefully they're having an internal argument about whether to pay 600p or 700p.

[martylangan] 10/3/2011 14:30

Rio remaining awfully quiet...

[grahamg8] 10/3/2011 08:05

Tebbin, yes JP Morgan investment shows confidence. But did you spot that they have options to buy/sell an exact same quantity to their holding? This surely means a sell option. They seem to have already committed to sell to someone at an undisclosed price. IMO this is unlikely to be the Chinese because they have the Board agreement to recommend a sale at 290p. So JP could be pretty sure to get 290p without the option and I don't think UK takeover rules allow a bidder to pay more for some shares than the offer price. To get more than 290p JP would need to be tied to another potential bidder, RTZ or AN Other.

[red ninja] 09/3/2011 17:32

Gero post on HC

Extract surges on speculation

Australian Financial Review
PUBLISHED: PRINT EDITION: 10 Mar 2011
Angela Macdonald-Smith

Uranium explorer Extract Resources has signalled it would seek to force China Guangdong Nuclear Power into making a full bid for the company should the Chinese firm proceed with its plan to bid for Extract's biggest shareholder, Kalahari Minerals.

Shares in Extract, owner of the giant Husab uranium deposit in Namibia, surged another 8 per cent to $10.73 yesterday, extending the previous day's 7.3 per cent jump amid rising expectations of a bid.

Extract said yesterday it would oppose China Guangdong Nuclear's application to the Australian Securities and Investments Commission for relief from the legal provision that would require it to make a follow-on offer for Extract if it acquired more than 20 per cent of the company, unless Extract shareholders were offered at least the same terms.

London-listed Kalahari's primary asset is its 43 per cent stake in Extract. Perth-based Extract's independent directors want to ensure the company's shareholders "are not disadvantaged in any way", it added. Otherwise Extract said it would ask ASIC not to grant the exemption.

China Guangdong has signalled it won't proceed with the bid for Kalahari unless it gets the ASIC exemption. RBC has calculated that China Guangdong's proposed GBP756 million ($1.2 billion) bid for Kalahari implies a value of $2.8 billion for Extract, or $11.16 per share, signalling any bid would need to be at least that price.

Kalahari's takeover by China Guangdong would effectively give the Chinese nuclear giant control over Husab, which is set to become the world's second-largest uranium mine once it starts production in 2014.

China has been scouring the world for uranium assets to meet its nuclear power growth plans. Rio Tinto owns 14.7 per cent of Extract and 11.5 per cent of Kalahari and some analysts expect the China Guangdong bid to trigger a move by Rio on either company. Until now, Rio has been focusing on ways to access the Husab resource without bidding for control of Extract, through a deal to process ore from the deposit through its neighbouring Rossing mine.

Extract said yesterday it was continuing work on its feasibility study for the project and is understood to still be negotiating with Rio on the joint development of Husab, which would help reduce the estimated $1.5 billion cost.

Talks it had been having with Kalahari on a potential streamlining of its ownership have been put on ice.

Japan's Itochu also owns stakes in Extract and Kalahari.

Rio and Itochu could block the bid for Kalahari through their combined 25.2 per cent stake but that would not stop China Guangdong from gaining control, said Warwick Grigor at BGF Equities in Sydney.

He outlined two possible scenarios: either Rio, Itochu and China Guangdong work as a team, which could lead to a joint venture for Husab with a smaller Extract maintaining a stake as a listed company, or Rio and Itochu increase their stakes in Kalahari or Extract, with Kalahari the more likely because its shareholder register includes several investment groups that "just want to maximise their return on capital."

[thorpematt] 09/3/2011 13:44

IC say hold on for counter bid


" Going nuclear: a Chinese parastatal company has bid for uranium miner Kalahari. Wait for a possible counterbid from Rio Tinto..."

[gardenarc] 09/3/2011 13:12

That sounds positive tebbin, off the cuff tebbin what do you think URA could be worth and thinking about whats happend to mantra next door i know there only a tiddler BUT it has uranium.

[tebbin] 09/3/2011 13:03

J P Morgan Assett have increased their holding up to 13.1m shares so they are expecting a gain.... £40m is a substantial stake.....

[extrader] 09/3/2011 11:13

Krakow,

Well, given the choice, I certainly wouldn't object to a short term great gain !

[krakow] 09/3/2011 10:21

Extrader, I'm more interested in a short term great gain, without all the capex and opex, debt and dilutive equity of mining costs, with production someway off.

[zangdook] 09/3/2011 10:15

Does the current situation prevent KAH continuing their discussions with EXT about simplifying the share structure? I don't see why it should.

[extrader] 09/3/2011 10:04

Hi Krakow,

Surely the choice is between a good gain in the short term (takeover) and a great gain in the long term (full production)?

I hold KAH both in a standard account and in my SIPP , so am pretty relaxed about the outcome !

ATB

[krakow] 09/3/2011 09:49

It seems now that what we really want is a hostile bid for EXT, and that's a whole different proposition. The bid for KAH is just muddying the waters and complicating the prospect of a complete takeover, otherwise we're back to opening a mine and that's not in anyone's interest if they're looking for big gains on their investment.

[grevis] 09/3/2011 09:44

Rio must be irked by the Chinese muscling in on their discussions with EXT. A bid of 350p should see them off. Interesting times!

[tebbin] 09/3/2011 09:09

Veklt/Lizzie II....... I dont think that CGNPC UR will want to be put in a situation where they have to make an offer for EXT.....This would give them great responsibilty to progress the whole of the licence.....They seem to want to secure future supplies for their own plants, and if things go wrong they can make others dance to their tune.... ...

RIO is still a major player if they want to up the anti, and ITOCHOU have a foot in KAH & EXT......how will they play it...

We will finish up higher with KAH share price than we are.....GL

[davide1976] 09/3/2011 09:08

This is becoming more and more interesting as the days go by. I am a silent member of this board and recognise the posts of certain people as being reliable.

Good luck to all who hold.

[veldt] 09/3/2011 07:49

This hasn't appeared in the RNS box above, but is in the news list on the monitor page.

UPDATE: Extract Calls For Bid If Largest Shareholder Gets Offer
Date : 09/03/2011 @ 07:33
Source : Dow Jones News
Stock : Kalahari Minerals (KAH)
Quote : 301.0 0.0 (0.00%) @ 05:00
Quote Chart Trades Level2


UPDATE: Extract Calls For Bid If Largest Shareholder Gets Offer
Share this article
Extract Resources (ASX:EXT)
Intraday Stock Chart
Today : Wednesday 9 March 2011
Extract Resources Ltd. (EXT.AU), which holds a key uranium project in Africa, said Wednesday it wants a Chinese state-owned company that may make a takeover bid for its largest shareholder to extend any offer to its own shareholders.

Extract, an Australia-based uranium explorer, said that if the offer isn't extended, Australian regulators should deny a request by CGNPC Uranium Resources Co., a unit of state-owned China Guangdong Nuclear Power Corp., to be exempted from provisions that would otherwise force it to launch a secondary bid for Extract if it succeeds in acquiring Kalahari Minerals PLC (KAH.LN).

Kalahari, which holds an almost 43% stake in Perth-based Extract, on Monday said it was discussing a possible cash offer from CGNPC-URC at 290 pence a share, which would value it around 756 million pounds ($1.22 billion). It said in a statement that CGNPC-URC plans to seek relief from the Australian commission to buy more than 20% of Extract, a level after which an acquirer needs to make a takeover offer to all shareholders.

Extract said it will make submissions to the regulator to protect the interests of its shareholders and ask that either an offer be extended on "no less than equivalent terms" to that offered to Kalahari shareholders or for CGNPC-URC's request for relief from the takeover rule to be denied.

At stake is control of the Husab uranium project in Namibia, one of the largest undeveloped uranium deposits in the world. The project lies only a few kilometers from the massive Rossing mine owned by Rio Tinto Ltd. (RIO), which owns an 11.5% stake in Kalahari and a 14% interest in Extract. Rio Tinto has been in talks with Extract over the possible merging of Husab with Rossing.

Industry analysts have for years speculated Rio Tinto would eventually acquire Extract in a move that would extend its uranium reserves and help bring Husab to production. Spokespeople for Extract and Rio Tinto declined to comment when contacted by Dow Jones Newswires.

Kalahari in its statement Monday said CGNPC-URC was in discussions with possible consortium partners that might join as minority investors in its takeover bid. The proposed offer, which has the support of Kalahari's board, is subject to a number of conditions, including regulatory clearances in Australia and China and finalizing funding.

Speculation over a possible bid for Extract buoyed its shares for a second day Wednesday, ending the day 8% higher at A$10.73, giving it a market capitalization of 2.69 billion Australian dollars ($2.51 billion).

Liu Kaixin, director of public office at Guangdong Nuclear, declined to comment on the planned bid for Kalahari. A spokesman for the Australian Securities and Investments Commission said the regulator doesn't comment on whether applications have been received or are under consideration.

Rio Tinto, meanwhile, will in coming days have to decide whether to extend a A$3.9 billion offer for Australia's Riversdale Mining, which is developing coking coal projects in Mozambique. Riversdale's two largest shareholders--Tata Steel Ltd. (500470.BY) of India and Cia. Siderurgica Nacional (SID)--have increased their shareholdings and now together own a 47% stake. The offer has already twice been extended by 14 days, most recently until March 18.

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

--Zhoudong Shangguan in Beijing contributed to this article.




"

[lizzie ii] 09/3/2011 07:17

EXT up 8% today in Australia .... closed at A$10.73 ! Very active market ... 3588 trades.

[tebbin] 08/3/2011 16:49

The following was posted on HC by Fireblade and looks at some of the problems with the different Stock exchange regs,

Still trying to understand it myself....

Kalahari takeover offer must inevitably lead to move on local miner

Bryan Frith From: The Australian
March 09, 2011 12:00AM

URANIUM hopeful Extract Resources yesterday advised shareholders it was reviewing the implications of a pound stg. 756 million ($1.2 billion) bid for its major shareholder Kalahari Minerals. One of those implications may be that, under the Takeovers Code, Extract also ends up receiving a bid. It's all to do with downstream bid provisions of the Corporations Act.
Kalahari is a British incorporated company listed on the London Stock Exchange's secondary market AIM and also on the Namibian Stock Exchange (NSX).

Kalahari's major assets are a 43 per cent interest in Extract and a 45 per cent stake in North River Resources, which is also listed on AIM.

Under the Corporations Act, if a party acquires more than 20 per cent, then it is deemed to have the same relevant interest as Kalahari has in other shares.

CGNPC Uranium Resources, which is wholly owned by China Guandong Nuclear Power, a state-owned nuclear power producer, is discussing a possible recommended cash bid for Kalahari of pound stg. 2.90 a share, a premium of 11 per cent to the previous share price and 38 per net to the six month VWAP.

But if CGNPC were to acquire more than 20 per cent of Kalahari it would also acquire a deemed relevant interest in 43 per cent of Extract, and that would fall foul of section 606, which prohibits a party acquiring more than 20 per cent of a company without first making a takeover offer to all shareholders.

Section 611 (14) provides an exemption from the need for an upstream bidder to also bid for the downstream company. It applies if the upstream company is listed on the ASX or a foreign exchange approved in writing by the corporate regulator ASIC.

This issue arose recently with the bid for Germany's Hochtief by the Spanish group ACS. Hochtief owns 54.48 per cent of Leighton, but as Hochtief is listed on Deutsche Borse and it is an ASIC-approved foreign exchange, no downstream bid for Leighton was required.

But AIM and NSX, on which Kalahari is listed, are not on ASIC's approved list. On the face of it, a bid by CGNPC for Kalahari will also require a takeover bid for Extract.

CGNPC can apply for relief to exempt it from the requirement to bid for Extract -- in fact, it will need to apply for relief to enable it to acquire more than 20 per cent of Kalahari.

But it's unlikely the Chinese group would receive unrestricted relief. More likely is that it would obtain restricted relief and, going by ASIC's policy, that would be likely to include a requirement for a full bid for Extract.

ASIC will normally require a bid for the downstream company if the holding in the downstream company comprises more than 50 per cent of the upstream company's assets and control of the downstream company is a main purpose of the downstream acquisition. The stake in Extract is Kalahari's only significant asset. Its stake in North River has a market value of only pound stg. 11m while the company also has between pound stg. 20m and pound stg. 25m.

Extract shares were selling at $9.26 before the possible bid for Kalahari was disclosed and at that price Kalahari's stake was valued at $850m. The stake accounts for more than 90 per cent of Kalahari's assets and that is reflected in Kalahari's market capitalisation, which stood at $1bn before news of the possible bid. It's crystal clear that the main purpose of a bid by CGNPC would be to secure Kalahari's stake in Extract.

The Chinese group admits as much. It says that, given China's emphasis on diversifying energy sources, and its intended increase in nuclear generating capacity to lessen reliance on fossil fuel sources, it is committed to supporting development of new supply capacity in the natural uranium market.

Extract is developing the Husab project in Namibia, which is one of the world's best high-grade uranium deposits.

Where ASIC requires a follow-on downstream bid the offer price is set by an expert at the "see through" value implied by the upstream bid. ASIC also requires a cash bid, or a scrip offer with a cash alternative.

Based on the value of the proposed bid for Kalahari the value of the remaining 57 per cent of Extract would be $1.59bn, or about $10.75 an Extract share. That would put a total value on a bid for both Kalahari and Extract at about $2.79bn. Extract's share price jumped 68c, or 7.3 per cent yesterday, to $9.94, reflecting speculation on the likelihood of a downstream bid.

In the joint announcement to AIM, CGNPC says it will seek relief from ASIC to acquire more than 20 per cent of Kalahari and if, after discussions with ASIC, it proposes to make a downstream offer to Extract shareholders it would only be likely to be made if the possible offer proceeded and became unconditional.

Moreover, any bid would be likely to be subject to the Kalahari bid becoming unconditional and subject to usual defeating conditions, including no prescribed occurrences. The Chinese group would also require foreign investment approval for both the Kalahari offer and any offer for Extract.

It would also be made with substantially equivalent effective benefits to those that are offered to Kalahari shareholders -- that is, the see-through price.

While CGNP and Kalahari are still in discussions about a firm offer, the Kalahari board has indicated that if a firm bid is made at the suggested offer price the directors will recommend acceptance. Those Kalahari directors who own 7 per cent of the company have given irrevocable undertakings they will accept for their holdings, subject to there being no superior proposal, representing an improvement of 5 per cent to value of the possible offer.

Kalahari and CGNPC have also entered into an implementation agreement that includes provisions for Kalahari and CGNPC to pay the other a break fee of pound stg. 7.5m in certain circumstances. That would suggest a high degree of confidence that a firm bid will be made.

CGNPC's statement that it intends to be a partner in the development of the Husab project has possible implications for Rio Tinto. Late last month Extract announce that it was holding discussions with Rio about a possible combination of the Husab project with Rio's neighbouring Rossing uranium mine and was also holding discussions with Kalahari to explore options that may simplify the Extract/Kalahari shareholding structure.

The talks with Rio are still under way, but the arrival of CGNPC on the scene may complicate matters. Rio owns 10.8 per cent of Kalahari and 14.2 per cent of Extract, so it could prevent compulsory acquisition of both companies.

The Japanese group Itochu also has cross-shareholdings -- 13 per cent of Kalahari and 10 per cent of Extract.

Rio is already facing uncertainty over another corporate move, it's $3.9bn takeover bid for Riversdale Mining, which owns major coking coal deposits in Mozambique. Rio began with its foot on 14.9 per cent but to date has been stymied by Riversdale's two major shareholders, the Indian steelmaker Tata and the Brazilian steelmaker CSN.

[grahamg8] 08/3/2011 16:38

Just looked at Killik's daily update. It contained a couple of interesting items:

435 reactors in place wolrdwide, with 430+ under construction, planned, proposed (it doesn't say how many are due to be decommissioned). Current U3O8 demand is met by 65% mining ie market demand already outstrips supply. Balance of 35% made up of USA/USSR warheads being stripped down. But the agreement to do this expires in 2013 leaving a pretty hefty shortfall. Timing on Rossing South start up looks just about perfect.

Their recommendation is to hold in anticipation of a bidding war over KAH.