UPDATE: Extract Books Uranium Resource Upgrade In Namibia

Extract Resources Ltd. (EXT.AU) Thursday upgraded the resource at the first zone of its Rossing South uranium prospect in Namibia by about a third, confirming the venture as one of the world's most significant uranium discoveries.

A sizable upgrade was largely expected and keeps a target firmly painted on Extract's back, with takeover speculation around the Perth-based miner already running rampant.

Extract said the resource in the first zone at Rossing South increased to 145 million pounds of uranium oxide from the previous statement of 108 million pounds, while the overall resource grade increased to 449 parts per million of yellowcake.

Rossing South is six kilometers away from the massive Rossing uranium mine that's jointly owned by Rio Tinto Ltd. (RIO.AU) and the Namibian government, and which produced 8% of the world's uranium oxide in 2008.

Extensive exploration potential is still to be tested at the first zone of Rossing South and the maiden resource for the second zone is due August, Extract said.

"Once the Zone 2 resource estimate is completed, Rossing South is expected to be one of the top 10 global uranium deposits by contained metal," Extract said in a statement.

By 0135 GMT, Extract shares were up 2.9% at A$6.42 compared with a 0.4% rise in the benchmark S&P/ASX 200 index. They were hovering around the A$1.00 mark in December.

Promising assay results and corporate activity has driven the share price rally with major shareholder U.K-based Kalahari Minerals Plc (KAH.LN) and significant shareholders Rio Tinto Ltd. and Stephen Dattels' Polo Resources Ltd. (PRL.LN) all jostling for position on Extract's board.

Interest in uranium is increasing as Asian countries plan to install vast amounts of nuclear power and some European countries lift bans on nuclear power.

Consequently, some analysts have suggested Extract could also be bought by Chinese or Indian state interests, France's Areva SA (CEI.FR) or Canada's Cameco Corp. (CCO.T).

Tony Parry, analyst at Resource Capital Research, on 15 June said Rossing South had major exploration upside beyond 250 million pounds, with a minimum 300 million pound resource more likely.

He's valued Extract at A$7.50-A$8.00 a share.

-By Ross Kelly, Dow Jones Newswires; 61-2-8235-2957; ross.kelly@dowjones.com

Excite Technology Services (ASX:EXT)
Historical Stock Chart
From Jun 2024 to Jul 2024