25 May 2012

Severstal in Berkeley bid talks

29/10/2010 Robert Tyerman

Uranium play Berkeley Resources says Russian mining group Severstal is discussing a potential takeover bid and a £16 million initial investment.

Based in Western Australia and quoted on AIM, Berkeley has a £19 million option on Spain's Salamanca uranium project. That represents a major part of the company's estimated resources of 83.2 million lbs of uranium oxide U3O8, with 46 percent in the measured and indicated category. Berkeley now says it has granted well-funded Severstal, a leading integrated mining and steel company, the right to subscribe for new shares representing 9.1 per cent of its enlarged capital at A$1.70 (£1), on condition the Russian company publicly announces its intention to make a bid for the whole of Berkeley at a price of A$2 (119p) a share.

Berkeley managing director Ian Stalker points out that price represents a 40 per cent premium to the company's average share price over the previous three months. He declares himself confident Berkeley can 'recommence mining operations at one of the leading undeveloped uranium deposits in the world' and stresses that Severstal has 'substantial financing available to optimise' this process.

Shares in Berkeley, which have traded between 120p and 53p over the past year, have now reached 113p, up 11p this morning, valuing the company at £155.5 million. Hold on.

Tags: AIM, Deals & contracts, Emerging markets, Mergers & acquisitions

Sector: Mining

Companies: Berkeley Resources

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