Apac Resources scoops up 7% stake in London listed Kalahari Minerals
Uranium and copper explorer Kalahari Minerals (AIM: KAH) announced that Hong Kong-listed natural resource focused investor APAC Resources (HK: 1104) has agreed to acquire a 7.1% stake in the company for £1.85 per share, giving Kalahari funds of £29.6 million along with "further support for strong institutional backing" and increased exposure to the growing Chinese market.
The proceeds will be used for general working capital purposes. The sale price represented a slight premium to the company's closing price yesterday of £1.82 pence.
Under the terms of the agreement, the first tranche of shares to APAC will include 4.8 million shares for £8.9 million, while the remaining 11.2 million shares will be acquired by APAC on or before 10 June 2010. The second tranche will include a minimum of 7.4 million shares for a consideration of £13.75 million.
"APAC has a venerable track record in the natural resource sector, with its CEO, Andrew Ferguson, bringing a wealth of experience of the London mining arena from his six years as co-fund manager at City Natural Resources High Yield Trust. Of equal importance are APAC's invaluable relationships and contacts in the Chinese commodities market, which further strengthens Kalahari's exposure to the Asian resource sector following the strategic shareholding taken in Kalahari by ITOCHU Corporation in March 2010," said Executive Chairman of Kalahari Minerals Mark Hohnen.
The company intends to "keep an active dialogue" with APAC and other institutional investors to ensure a rapid development of its uranium, gold, copper and other base metal interests in Namibia. Major Japanese conglomerate and one of the largest uranium traders in the world, the ITOCHU Corporation (TYO: 8001), has earlier agreed to acquire a stake in Kalahari totalling 15%.
Kalahari Minerals holds a 40.41% stake in Extract Resources (TSX, ASX: EXT), which holds the rights to the Rossing South uranium mine in Namibia. Previous estimates have suggested the mine could support production of nearly 6,700 tonnes of uranium per annum, which would more than double Namibia's entire annual output and would be significantly larger than the nearby Rossing Mine, currently the third largest uranium in the world, and 68.6% owned by Rio Tinto (LSE:RIO, ASX:RIO).
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