Kalahari Minerals Share Discussion Threads

[gnevans] 23/3/2011 08:14

I am told via a third party that for the Chinese to walk away from the deal would be politically and culturally very difficult due to the break fee.

Having to explain this cost would be very difficult for them.

Just what I'm told...

[grahamg8] 23/3/2011 08:07

It just occurred to me that no one seems to have looked at how the take over from CGNP assuming it is formally launched will be presented to shareholders. There seems to be general agreement that they will use the time up to 3 May to do their DD and to prepare an equivalent offer for EXT. During this time however we should get a resource upgrade and the DFS. Even without these the offer documents have to give a detailed analysis of the assets and prospects. Even post Japan I can't help thinking that when the full prospective value of Rossing South is presented in one comprehensive document 290p might still look too low to a lot of shareholders, and the bid might be rejected. The ARMZ offer for Mantra will be proceeding at the same time with a completion date expected on 4 July. So it will be pretty easy to get a comparative price on a similar deal.

[tebbin] 23/3/2011 07:49

The following was posted by Dinerio on the HC site which is interesting and gives a compelling reason for a resource upgrade......


The revised takeover offer for MRU is priced at USD9.01 per LB of U resource.

Based on this current offer that makes an allowance for any potential disruption to the U market because of Japan, Rossing South would be worth AUD 3.3 billion based on its 367 million pound resource that is due to be upgraded very soon.

That equates to a shareprice of approx $13.18

Rossing South is a far superior orebody to MRUs in every way.

Game is still on.

[gnevans] 22/3/2011 15:13

funny trading patterns today?>

[krakow] 22/3/2011 13:37

I think medium term the Japan situation will have zero effect on the world's appetite for nuclear power even with all the lazy and inaccurate reporting from Fukushima and I suspect the Chinese know that.

[tebbin] 22/3/2011 13:26

zangdook....

What we need here is the long awaited DFS to find out what is on the table. My feeling this delay is more political than practical...Delays in the DFS and the Mining Licence play into the arms of RIO....The clock is ticking (Mine licence April 2011) and if there is a necessity to meet the milestones, Rio seems the best able to do that......The inferred JV with CGNPC would seem a solution...

The move of backing the CGNPC bid shows KAH has tired of the journey and is ready to surrender the prize....A new RNS providing an uptodate resource totals would be the minimum requirement at this stage... We had MH telling us it would probably be around 500mlbs over a year ago.......EXT are not in a offer situation only KAH so no excuse...

BTW There has been rapid increase in the U308 in the last week.....and it looks as though there is still going to be a shortage of supply, so I dont expect that to stop increasing in the short time...

T

[zangdook] 22/3/2011 11:16

"a collapse in uranium-mining shares that makes the Chinese deal look extremely overpriced"

290p is only just over a 20% premium to the 240p he quotes. How is that "extremely overpriced" for a takeover of a major strategic interest in such an important resource? It seems to me a rather unexciting premium for any sort of takeover.

IMV short-term market turbulence is hardly relevant here. The only factor is government policy on n-power going forwards.

[krakow] 22/3/2011 10:51

You tell 'em Robb.

[gero67] 22/3/2011 10:21

China Keeping a Cool Head on Uranium

HEARD ON THE STREET
The Wall Street Journal
MARCH 22, 2011, 4:58 A.M. ET
By ROBB STEWART

With its biggest uranium-mining deal at stake, China has kept its head during Japan's nuclear crisis while other investors in the sector have been losing theirs. It likely had little choice.

China Guangdong Nuclear Power Holdings Co. appeared to have scored a major coup when it struck a GBP756 million ($1.23 billion) deal on March 7 to buy Kalahari Minerals. The deal put the Chinese in the box seat to secure access to one of the world's biggest uranium deposits in Namibia, as Kalahari's main asset is a near-43% stake in the mine's developer, Extract Resources.

However, the nuclear crisis in Japan following the devastating earthquake and tsunami has triggered a collapse in uranium-mining shares that makes the Chinese deal look extremely overpriced. Kalahari shares last traded at 240 pence each (US$3.91) amid widespread worries over the outlook for nuclear power, versus CGNPC's offer for 290 pence each. CGNPC's stance also appears surprising as other deals in the sector are being renegotiated in favor of buyers. Russia's JSC Atomredmetzoloto was able to shave 140 million Australian dollars (US$141 million) off its original A$1.16 billion bid for Tanzania-focused uranium miner Mantra Resources due to the impact of the quake, and still secure a recommendation from its target's board Monday.

What's driving CGNPC's thinking is probably fear. The nuclear-power generator knows that it caught the market napping with its surprise offer. Many investors had expected Rio Tinto to be a suitor for Kalahari, given it already owned 11.50% of the company and its producing Rossing uranium mine is just a few kilometers away from Extract's Husab deposit in Namibia. By walking away, CGNPC would give Kalahari's board the chance to drop its support for the bid and talk to Rio.

CGNPC's reluctance to renegotiate may also reflect a belief that the current worries about nuclear power - especially in its home country - are overdone. China and India, which account for about half of the 479 new reactors planned globally, are unlikely to abandon the technology given the pressing need for electricity to maintain their growing economies.

When Chinese companies weigh strategic needs against valuations, it's strategy that usually wins. CGNPC's deal for Kalahari may no longer look a bargain, but that doesn't make it a bad bet.

Write to Robb Stewart at [e-mail]

[grahamg8] 22/3/2011 09:10

Mantra Resources have now posted the revised offer from ARMZ at AUD6.87ps + a special divi of AUD0.15ps, this is said to be worth AUD1.02bn ie 12% less than the start price from 15 December. Although not directly comparable to KAH 12% off 290pps would be 255p. Thus the market seems to be valuing in a risk that the Chinese may walk away.

[krakow] 21/3/2011 22:54

martylangan, that's a reasonable spread imo. For a long time I've had pencilled in 500mlb u3o8 at US$10 as a guideline midpoint.

[cootuk] 21/3/2011 18:21

Well it's times like these when you pays your money and takes your chance - there are holders like us who believe even 290p is a steal yet this is being held neatly at 245p?

[red ninja] 21/3/2011 17:32

Mmm maybe, but its the big holders who will or will not accept a takeover so depends on how keen they are to hold out for a higher price or go it alone.

Will they be scared into accepting a lower offer or will Rio emerge and bid up the price ?

[krakow] 21/3/2011 17:27

290p would be a stitch-up, so any change needs to be upwards.

[red ninja] 21/3/2011 17:25

So from previous post they may consider offer price change, but after certain conditions satisfied...

[red ninja] 21/3/2011 17:22

Gero HC post :

Nuclear crisis brings out bargains

Australian Financial Review
PRINT EDITION: 22 Mar 2011
Street Talk
Edited by Paul Garvey and Khia Mercer

Speculation that Russia's Rosatom took the Japan nuclear crisis as an opportunity to secure a cheaper price for African uranium explorer Mantra Resources appears to be on the money.

As opposed to walking away from its $1.2 billion takeover bid, Rosatom subsidiary ARMZ is understood to be in the process of negotiating a new deal with Mantra and its corporate adviser, RBC Capital Markets.

Mantra entered a trading halt yesterday and was expected to reveal the details as early as last night but, as can often be the case with these things, it appears there have been some last-minute delays.

It's unclear what sort of price cut ARMZ will push for, but analysts noted that the initial bid put a valuation on the resource at Mantra's Mkuju River project in Tanzania of $US10.26 per pound of uranium, well above the market value of its peers.

The nuclear crisis in Japan is yet to have an impact on the other uranium takeover deal in the works, China Guangdong Nuclear Power's proposed $1.2 billion bid for Kalahari Minerals, which holds a 43 per cent stake in Extract Resources.

CGNP is understood to be focused on satisfying certain conditions before a May 3 deadline and only then will assess whether its proposal needs reworking in light of global circumstances.

Interestingly, Rio Tinto, a major shareholder in both Extract and Kalahari, is rumoured to have been sniffing around for uranium assets in Tanzania, although it would hardly be an early mover if it did acquire something in the country.

Resources floats have also encountered difficulties as a result of the recent Japan and Libya-related market volatility.

The latest supposedly under a cloud is commodity trader Glencore International's proposed GBP10 billion ($16.3 billion) float in London and Hong Kong.

[gnevans] 21/3/2011 17:15

Tebbin

The offer document indicated that the board were terminating talks with a third party (rio?). So the Chinese are aware that there are others interested. The cost of this takeover for them is nothing... The control of the uranium is of great importance as they need nuclear.

What does this offer value the KAH uranim at per pound? less than the $10 plus of the other current takeover with Mantra?

[tebbin] 21/3/2011 16:01

cootuk.....Have not seen evidence of CGNP lowering there offer...

Should they do so, they would be at risk of losing the backing of KAH BOD and that could be the end of their participation.
There are other Major Shareholders on the fringe who are not there just to make money out of holding shares in KAH/EXT.....

We should know sooner IMO rather than later, thats if the DFS comes out on time....1Q 2011 was mentioned..

[cootuk] 21/3/2011 15:06

shazbo...just paperwork formailities.
The market is obviously now pricing in the chinese lowering their offer and no bidding war.

[gero67] 21/3/2011 14:31

Nuclear crisis brings out bargains

Australian Financial Review
PRINT EDITION: 22 Mar 2011
Street Talk
Edited by Paul Garvey and Khia Mercer

Speculation that Russia's Rosatom took the Japan nuclear crisis as an opportunity to secure a cheaper price for African uranium explorer Mantra Resources appears to be on the money.

As opposed to walking away from its $1.2 billion takeover bid, Rosatom subsidiary ARMZ is understood to be in the process of negotiating a new deal with Mantra and its corporate adviser, RBC Capital Markets.

Mantra entered a trading halt yesterday and was expected to reveal the details as early as last night but, as can often be the case with these things, it appears there have been some last-minute delays.

It's unclear what sort of price cut ARMZ will push for, but analysts noted that the initial bid put a valuation on the resource at Mantra's Mkuju River project in Tanzania of $US10.26 per pound of uranium, well above the market value of its peers.

The nuclear crisis in Japan is yet to have an impact on the other uranium takeover deal in the works, China Guangdong Nuclear Power's proposed $1.2 billion bid for Kalahari Minerals, which holds a 43 per cent stake in Extract Resources.

CGNP is understood to be focused on satisfying certain conditions before a May 3 deadline and only then will assess whether its proposal needs reworking in light of global circumstances.

Interestingly, Rio Tinto, a major shareholder in both Extract and Kalahari, is rumoured to have been sniffing around for uranium assets in Tanzania, although it would hardly be an early mover if it did acquire something in the country.

Resources floats have also encountered difficulties as a result of the recent Japan and Libya-related market volatility.

The latest supposedly under a cloud is commodity trader Glencore International's proposed £10 billion ($16.3 billion) float in London and Hong Kong.

[shazbo] 21/3/2011 14:12

Not sure how to interpret this, is it just necessary AIM 'paperwork' or is it CGNPC confirming that the bid is still on if all the necessary regulatory bodies are satisfied?

[gnevans] 21/3/2011 12:02

click on the rns news under kah...or go to kah website

[maxcashflow] 21/3/2011 11:41

gnevans - do you have a link?