Extract drill rigs
in the Namibian
Melbourne, Australia — ESI-AFRICA.COM — 28 April 2011 – Shares in uranium explorer Extract Resources slumped 10% today on worries about plans by the Namibian government to assign almost all mining and exploration rights to a state-owned company.

Australian-listed Extract Resources declined to comment on the Namibian government’s proposal to give the state exclusive exploration and mining rights over uranium, copper, gold, zinc and coal.

The company is at an advanced stage of planning to develop the Husab uranium project in Namibia, just south of Rio Tinto’s Rossing mine.

Extract shares fell 9.9% to A$7.57, valuing the group at A$1.9 billion.

Rio Tinto also declined to comment on the Namibian government’s plans.

Extract’s top shareholder, Kalahari Minerals, is in talks with a unit of state-owned China Guangdong Nuclear Power Holding Corp (CGNPC) on a US$1.25 billion takeover offer. Kalahari shares fell 8% to 228.75 pence in early trade in London.

The deadline for CGNPC to submit a formal offer is next Tuesday, May 3rd.

If CGNPC took over Kalahari, it would own 43% of Extract, above the 20% threshold at which Australian rules would require it to automatically make an offer for the rest of Extract’s shares.

CGNPC applied to the Australian Securities and Investments Commission for an exemption from that requirement, and the commission is expected to rule soon on the request.