Niger Uranium General Discussion

17th Jul '09 by marben100

95 comments 19788 reads

A thread for general discussion of the company and developments that affect it. See the URU wiki for further information on URU and its assets. There are separate threads for each of its major projects:

Discussion relating specifically to Kalahari (AIM:KAH) should take place on a thread relating to that company. You can find those threads here: http://www.stockopedia.com/forum/threads/KAH Discussion relating to Kalahari's main asset - its investment in Extract Resources can be found on the Extract Complex thread . The uranium market is discussed on the Uranium Suppy & Demand thread . Note that the vast majority of Uranium is sold under long term contract, with the spot market being relatively illiquid & voltaile, so long term pricing is far more relevant to NPV calculations for mines.

Long Term Contract U Price

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Marben100

Premium Member

I am a full-time private investor... with a little trading on the side (generally small-scale arbitrage in specialist niches). Previously, I spent 24 years in the IT industry, 13 of those running my own IT services firm. I invested as a "hobby" for 20 years before turning it into a full-time occupation in 2004. I really enjoy the "research" side of investing, finding out about varied businesses and industries and learning what makes them tick. Since going "full-time" I have learnt an awful lot from some very erudite investors & professionals who are kind enough to share their expertise in electronc forums such as this. I can now count a number of them as my friends, having had the opportunity to meet them in the real world, as well as this virtual one! I try to pay back the debt I owe by sharing what I've learnt and I always value constructive criticism to correct my errors and misapprehensions! I am a Director of ShareSoc, the UK organisation for individual shareholders. See below for details. more »

95 comments

wantedman

20th Jan '10

Hello everybody,

After reflecting a bit,here is my opinion on the whole matter.As I am a NWT shareholder,i will try to keep this neutral.

I guess NWT got annoyed with the time the whole Extractstory takes.As i have previously posted,they were expecting a take over bid to happen much sooner.So they probably dont want to wait much longer (6 months,a year?) until something crucial happens.

So here is something,which has explosive potential in the deal:

In case NWT will be able to win the vote at URUs EGM and after that KAHs shareholders will be able to win the vote regarding distributing their EXT shares,RIO would end up with over 20% of interest in EXT !!!

According to ASX rules Rio would then be forced to make a take over bid to all EXT shareholders. So the action starts.

Maybe after Rios bid,other companies or countrys come out and we get our "bidding war" ?

I guess DdJW has no interest in that,because after distributing their EXT shares,KAHs role in the whole matter would be absolutely unimportant.The same is true for Mark Hohnen.

So what would that mean for shareholders?

The small companies who momentarily suffer from a double or triple discount (URU,EML,REGPAC,NWT,...) will see that discount vanish.(which will make the taxation issues important again)

KAH shareholders will get a direct grip on EXT as well.Another discount that would vanish.

So I think the whole matter was initiated by NWT to heat things up.They want a take over rather sooner than later and are probably willing to get the amount X now instead of waiting for the drill rigs to finish their work in 6 or 12 months time.

So probably a good deal for all the impatient ones,who want their money now.People who prefer to let Extract drill until they will be able to prove the whole resource and thus maybe getting a much higher reward in the longterm will see things differently.

marben100

20th Jan '10

Hi wantedman,

FWIW I agree with your analysis of NWT's motivation and the result for shareholders of URU, EML etc.

However, my own view is that that we may get a much better result by allowing Extract's geologists to better define the resource we have, first. Judging by the results of drill holes at the boundaries and outside the zone1/zone 2 areas that Extract has focussed on so far, ISTM that there is a good chance, as Steve Galloway has said, that we may so far only have seen a fraction of the total resource. Time is needed to do suffient work to get a better idea of the target sizes - only then will we know whether any offers Extract receives are fair value or not.

Obviously, by waiting we are taking a risk that future drilling results may disappoint and/or the U market may deteriorate but I don't think those risks are too high, relative to the reward we might receive by being patient.

I don't think DdJW is motivated by his Board positions, for their own sake (though Hohnen might be). Considering his main business, Chiliogon, I think he has plenty of other fish to fry. IMO his motivations are aligned with those of Dattels, Mellon, Beck & co, to maximise shareholder value. NWT's directors, OTOH, would be rather keen to get their hands on some serious cash in the shorter term, to enable them to pursue NWT's other projects, don't you think?

NWT's move, however, should certainly increase the excitement factor and will increase the pressure on Extract to make the case for continued exploration. IMO Extract's Board needs to lean on the geological team to come up with some new pretty pictures and to increase the conceptual target sizes, if they can safely do so. This is no time for hiding your light under a bushel. :0)

All my best.,

Mark

wantedman

20th Jan '10

Hi Mark,

I agree that NWTs motivation is to get cashed up.And they are probably willing to abandon the option to get a much higher reward in the future.
But i guess the same is probably true for most of the small companies with double or triple discounts.I guess Dattels companies are an exemption there,because of their strategic value. (which might not be true for all of their shareholders)

wantedman

21st Jan '10

New Hanson and Westhouse Report out:

http://www.minesite.com/fileadmin/content/pdfs/Brokers_Notes_Jan_10/Niger%20Uranium%2021-01-10.pdf

wantedman

26th Jan '10

Per this announcement,it looks like AfNAt has freed some Cash:

http://afnatresources.com/images/stories/mey_announcement_25110.pdf

AfNat, the mining company focused on developing a diversified portfolio of interests in exploration and advanced stage mining assets, announces that following a review of the Company’s quoted investments, the Company has disposed of its entire shareholding in Marenica Energy Limited (ASX: MEY).

Guessing from the recent shareprices of MEY i guess they will have generated about 3-3.5 Mio AUD from this selling.

I have a pretty good idea what they will do with that money,or what they already did.....

StrollingMolby

26th Jan '10

John Lynch and Raphael Danon kicked off the Board today. Danon is an NWT director (and Lynch is Canadian - is he also on the NWT board?), so this will avoid NWT getting a majority on the Board if their nominee replaces DdJW.

The Company announces changes to the composition of the Board. Earlier today, the appointments as directors of the Company of John Lynch and Raphael Danon, were terminated by a duly convened meeting of the Board with immediate effect.

http://www.investegate.co.uk/article.aspx?id=201001261652291637G&fe=1

wantedman

26th Jan '10

@StrollingMolby:

Lynch is NWTs CEO

xigris

16th Feb '10

And the next exciting update on NWT/URU saga is:

http://www.investegate.co.uk/Article.aspx?id=201002161835002507H

The Board of the Company announces that it has today sold on an arms-length basis through the market, 14,000,000 shares in Kalahari at a price of 165p (the "Disposal"). The total consideration before costs amounts to £23,100,000 in cash (the "Cash Proceeds").

The Cash Proceeds, without any deduction of costs, are to be returned to shareholders as soon as possible by way of an interim dividend to be paid to shareholders. Based on an issued share capital of 113,210,056 Niger Ordinary Shares of nominal value of US $0.01 each (the "Ordinary Shares"), the interim dividend amounts to 20.4p in cash per Ordinary Share (the "Dividend"). In accordance with the Stock Exchange dividend procedure timetable, the record date is Friday 26 February 2010 (the "Record Date") and the ex-dividend date is Wednesday 24 February 2010. Payment will be made to shareholders within 10 business days of the Record Date..

Following the Disposal, the Company will continue to hold 13,680,000 Kalahari shares. The Board intends to propose that up to a further 12,296,000 Kalahari shares will be distributed to shareholders in specie by way of a second interim dividend (the "Further Disposal"). The Further Disposal can only be made with shareholder approval and will therefore be put to shareholders for their approval at the forthcoming Annual General Meeting (the "AGM"), notice of which will despatched in due course.

I think that's probably stymied NWT, but has given them a bit of cash to play with!

Chris

wantedman

17th Feb '10

I am glad,that i am not a direct holder of URU.A lot of potential for this stock has just been flushed down the toilet by CEO Weill.

To make this plain and simple,that action by Mr.Dattels puppet is clearly a rip-off.

The loosers are all URU shareholders (including NWT) who just lost half of their most valuable assets for a ridiculously low price.The 165p is the cheapest shareprice for the last half year.(and i guess the cheapest for the future)
KAH obviously was worried that NWT might have been successful with its request to distribute their EXT shares.
So Weill,the KAH board member, acted out of pure interest for KAHs board and absolutely contrary to the interest of URU shareholders.Given the fact that he is URUs CEO,this raises some questions.

All URU shareholders will cry and curse in some months,when the true value of EXT is measured.It will lead to a value far far above the-out of the question-165p for a KAH share.

All URU shareholders would have done a lot better deal by keeping their interest in EXT at these absolutely low prices.

NWT might find some comfort in the fact,that the chances in winning the URU EGM have increased considerably ,as it is clear now, who is acting in the interest of URU shareholders and who is pursuing another goal.

My guess,is that its far more attractive to invest directly in EXT (or KAH) now,instead of sticking with URU thanks to Mr.Weill...

xigris

17th Feb '10

With respect wantedman, I think you're letting your emotions get too involved here.

Clearly the cash dividend/proposed special dividend is going to affect people in different ways. There have been a number of reasons for investing in URU over the years starting with the legacy shares from UraMin.

I'm happy with the current situation, as I was always looking at the arbitrage side of things. With the proposed dividend, I get a tranche of cash within the next few weeks, which I may, or may not re-invest in the Extract complex. I also keep some exposure to the complex through my remaining URU holding and might receive some KAH shares through the special dividend in due course.

I've spent some time analysing my personal tax situation and for me, I feel the break point between holding/selling URU is currently 40p on my calculated NAV of approx 48p per share. As ever DYOR, this is not advice.

If I do sell at that point, I will have made a tidy profit over my purchase price. If I don't sell, I get hard cash and continued exposure to Extract.

For me its win/win. Of course I'd like to get more profit, but some profit is better than no profit - especially in this market. The hypothetical profit I'd have made from a special dividend of EXT shares would currently only give me a 5% uplift on my position. I'm prepared to accept this discount to avoid transaction charges and timing the market (which I am very bad at).

You seem to imply that all this is going to worsen your own position - I'm sorry if that's the case.

Cheers,

Chris

wantedman

17th Feb '10

Xigris,

Rest assured that my emotions didnt influence my post.

Investing is about facts/money and/or future profits and has nothing to do with emotions.

If you are eager to get some cash at these low shareprices, you can simply sell a part of your URU position.

What makes me angry is the fact,that all URU shareholders just lost nearly half of their future upside potential.

URU does not gain anything from that transaction.They dont have any noteworthy projects right now,where it would make sense to invest profitably at the moment.

This was all about detaining NWT to succeed with their plan to distribute KAHs EXT shares.

For that reason alone Weill (who is URUs CEO and for that reason his highest priority should be the benefit of URU shareholders-not Kalaharis or Extracts...) sacrificed half of URUs future upside potential.

What will you think if in 6 months time EXT will be sold for 15 AUD? In this case the 14 Mio shares of KAH that Weil just sold would be worth 51 pence/URU share.
Without any consideration of the remaining 13 Mio shares or URUs other projects.

Now you get some 20.4 pence a share (before taxes)

By the way KAH is trading at nearly 180 right now,so already one day after this transaction 165 pence for a KAH share doesnt look like a very good deal...

Dont get me wrong,i do expect URU to rise in the future along with EXT and KAH.
But the benfit for URU shareholders will just be half of what it could have been.

Maybe you will remember this post in the not too distant future,after all the deadline for Kepcos offer for a 15% stake in EXT is the 18th of march,which is just a month away.

So we could be on the verge of a take-over and you still think,this was a good move by Weill ???

So if there is an emotion on my side,its anger,because this deal will cost me (as an NWT shareholder) and all other URU shareholders a lot of money.

xigris

17th Feb '10

Hi wantedman,

I understand your anger as an NWT shareholder. If I were in the same position, I would be irritated myself.

I did not say that I thought this was a good move by Weill. However, I was expecting a response from him over NWTs EGM request and the resolutions NWT put forward. In light of that, I can't say I'm surprised by the action Mr Weill took. As far as future share price movement - who knows? I thought Extract wouldn't go back under A$9.

Regarding current URU shareholders, IMO they have a number of options, including:

Sell now and reinvest (here or elsewhere)
Take the dividend and reinvest (here or elsewhere)
Maintain current exposure to the complex by buying shares against the cash dividend (on a T+20 if they don't have the cash available)

I've never regretted taking a profit, however small. I've always resented a loss. This has made me a profit. The issue you raise about the future is very valid, but there is no certainty and Extract may yet mine Swakop without any extra external parties.

For me, this is an important point in time, because once again its making me ask the question: Would I invest in the Extract complex NOW? You make cogent points about why the Extract complex is a good investment. For me, the more important question is: Are there any better investment opportunities out there? Is the Opportunity Cost of holding Extract worth the potential return?

With your contacts at NWT, I would be interested to know what their response will be to the proposed special dividend.

All the best,

Chris

marben100

17th Feb '10

What makes me angry is the fact,that all URU shareholders just lost nearly half of their future upside potential.

Only if they don't or didn't reinvest. ;0)

I'm sorry, but in my view NWT made a big mistake in adopting the path that they chose to. They have now paid the price for that. Any shrewd URU shareholder will be well aware of the bigger picture - and that forcing Kalahari to disgorge its Extract shares is NOT in the interest of those that wish to invest in Rossing South (as I do). Doing so would make Extract more vulnerable to a hostile bid or to action by Rio Tinto that would NOT (IMO) maximise value for Rossing South investors.

Therefore, the risk of such an eventuality had to be avoided at all costs.

I currently hold Extract, Polo and EML only (within the uranium space), as I believe that these companies maximise my exposure to Rossing South. IMO whoever owns Rossing South may be able to dominate the entire U market (if the resource upside turns out to be as big as I believe it may be). That's a unique situation, which I think few have fully grasped - but I have no doubt that Weill and his friends have a VERY firm grasp on the implications of that.

I imagine Dattels has been looking for the next Barrick Gold for a long time. He may have found it.

Regards,

Mark

wantedman

19th Feb '10

In reply to marben100 (post #88)

Yes Marben,

I absolutely agree: Extract is unique and a bargain at these share prices.And yes it looks like NWT made a mistake by launching this request.

I plan to considerably increase my holding there (after Marenica has released their resource upgrade next week ; -) )

But nevertheless Weils action is a shame .If i learned one thing from recent developments:

Never ever invest somewhere,where the CEO is named DdJW as you can be sure he doesnt care a #### about his own shareholders...

But to look into the future URU is still looking good,from a fundamental point of view.But ÍMO after Weil just wasted half of the upside potential so maybe EML,Polo,KAH or EXT are much better stocks for an investment ?!?!?!?

extrader

20th Feb '10

Hi wantedman,

Re yr last para - why not plow back yr Ist URU cash dividend of 20.4p per share in to whichever of those co's suits your book - whiich I've just done ? Apart from the tax issue , I reckon you can 'reinstate' your effective EXT holding pretty easily...

Good luck whatever you do.

xigris

23rd Mar '10

One thing missed in th all the excitement over Extract is Niger Uranium's other major shareholding. It holds 21% of UrAmerica Ltd

Just to remind you all, UrAmerica's Chairman is Neil Herbert (MD of Polo) and has Ian Stalker on the Board - late of URU and currently MD and CEO of Berkeley.

UrAmerica have released a March update

Assets

Argentina (Chubut Province – San Jorge Basin –Cerro Solo Area)

·         JV with Patagonia Resources Limited (PRL) that has recently finalized the acquisition of United Energy Minerals (UEM), earning 100% interest in their 21 exploration permits covering 145,000 ha adjacent to and along strike with the fluvial channel which hosts the Cerro Solo uranium deposit.

·         The Cerro Solo deposit hosts an estimated recoverable resource of 4,600 tonnes (0.3%-0.5% uranium), based on 410 drill holes, aprox 70,000m.

·         UEM drilled 88 holes, almost 7,000m in 4 areas within 2 permits, W and S of Cerro Solo, with very promising results.

·         UrAmerica just signed a three stage 40.000m drilling contract with NA Degerstrom Inc. Drilling will start in April 2010, within the former UEM`s permits, in the Cerro Solo Area.

·         Additional 13 exploration permits covering 123,239 ha near the National Commission of Nuclear Energy’s (CNEA) Cerro Solo Deposit & containing several anomalous areas

·         Joint venture (JV) with Pacific Bay earning 60% interest in their 3 exploration permits covering 30,000 ha, also near Cerro Solo

Argentina (Salta Province – Salta Basin) *

·         22 exploration permits, including 13 from Globe Uranium, covering 150,000 ha near CNEA’s Don Otto Mine

Paraguay (Parana Basin) *

·         100,000 ha granted & 216,000 ha filed near uranium occurrences discovered by CUE Resources & Wild Horse Energy drilling campaigns

RECENTLY SIGNED CONFIDENTIALITY AGREEMENTS AT THE REQUEST OF:

U3O8 (Australia) Calypso (Canada), Herencia Resources (Australia), AREVA (France)

Anyone care to bet on a reverse takeover of UrAmerica by URU after disposing of the proposed Kalahari dividend? Seems to me its been done recently with Lithic Metals and Amber.

Chris

xigris

21st Apr '10

Niger Uranium Ltd: AGM, Proposed Special Dividend

The proposed Special Dividend has been unanimously approved by the Directors. Further, the Company has received from NWT Uranium Corp. ("NWT"), its largest shareholder interested in approximately 33.8 per cent. of the issued shares of the Company, a written undertaking to vote in favour of the Special Dividend at the AGM.

The Board has agreed to appoint Paul Loudon and to re-appoint John Lynch as non-executive directors of the Company with effect from 22 April 2010. On completion of the Special Dividend, David Weill will step down as a director of the Company and Paul Loudon will become Chairman. In addition, Ian Stalker will leave the Board on completion of the Special Dividend but will continue to act as joint-Chief Executive for an interim period while there is an orderly transfer of executive responsibilities by him to Anton Esterhuizen who will be appointed as joint-Chief Executive Officer (non-board appointment).

Chris

marben100

21st Apr '10

Hi Chris,

Looks like bets are off on the reverse T/O of UrAmerica... maybe a bit of an orphan, with NWT effectively taking control post- the special dividend.

Cheers,

Mark

xigris

21st Apr '10

Shame,

Still, glad that this time the SD should go through. I can't see AfNat voting against it, so that's >45% already voting for the SD (NWT 33.82%, AfNat 11.73%). I'm staying in for the SD, then out - can't see the benefit of Niger at the moment.

I'll keep an eye out for Neil Herbert's little hobby in the longer term. Where do you think Namibia lines up in Gondwana? ;-)

Now Axmin/AfNat - very interesting, but I don't like the arb from £ to C$. Probably foolish of me, but I'm going to watch that from the sidelines. I'm looking forward to the KAH/EXT next and hoping Mark H carrys off his idea of a full listing on the LSE.

Cheers,

Chris

zangdook

22nd Apr '10

I'm a little disconcerted at the extent of the capitulation to NWT. Also disconcerted that the RNS doesn't mention until the Additional Information at the end the fact that the proposed CEO Anton Esterhuizen is a director of NWT. Does Paul Loudon have any undisclosed connection with them?
As it stands we shall have one of three, and likely two of four directors, plus the CEO, all chosen by or on the board of NWT. Perhaps David Weill feels his work will be done when the KAH shares are distributed. I also may not stay afterwards, as I'm not sure I have much confidence in the new board.

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Niger Uranium General Discussion

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Marben100

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Niger Uranium Ltd: AGM, Proposed Special Dividend

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