Kalahari Minerals

HOLD

10/10/2011 Robert Tyerman

China Guangdong Nuclear Power (CGNP) has reopened talks about making an agreed bid for uranium play Kalahari Minerals (KAH).

This move follows talks earlier this year about a bid from CGNP at 290p, a price which the Chinese group then wished to cut to 270p following the Fukushima nuclear disaster in Japan. The City Takeover Panel ruled that out and ordered a three-month pause before any resumption of bid talks.

Under the City rules, pauses, CGNP many only return with a new offer before 11 November, provided AIM-quoted Kalahari's executive chairman Mark Hohnen and his board are willing to recommend it. Kalahari now says it has 're-commenced discussions with CGNP - with the intention of reaching agreement on an agreed offer.'

The prize for CGNP is Kalahari's near 43% holding in Australian-listed Extract Resources, which owns and operates the
Husab uranium project in Namibia, which already boasts proven and probable reserves of nearly 320m lbs of uranium oxide U3O8 and an attributable resource base of 500m lbs. Hohnen has suggested there is 'significant scope' to increase that resource base in a project whose Rossing South zone is next to the long-standing Rossing uranium mine, owned and operated by mining giant Rio Tinto, which itself owns 11.5% of Kalahari.

First recommended by Growth Company Investor at at 28p in 2007 and most recently highlighted in August at 218p, Kalahari shares now trade at 253p, up 7p this morning. Hold on for now.