Projects Update

RNS Number : 4934A

Niger Uranium Limited

08 October 2009

 



For immediate release

8 October 2009

NIGER URANIUM LIMITED

("Niger Uranium" or "the Company")

Projects Update

Termination of Henkries Acquisition

Henkries Project

On 1 September 2008 the Company announced that it had signed a share purchase agreement (the "SPA") under which Niger Uranium agreed, subject to the satisfaction of certain conditions precedent, to acquire URU Henkries Limited ("URU Henkries"), a private company. On completion of the acquisition of URU Henkries, Niger Uranium would have a 74 per cent. interest in the Henkries uranium project located in the Northern Cape province of South Africa. The initial consideration, which was to be held in escrow pending satisfaction of the conditions precedent, comprised US$1.75 million in cash together with 8,500,000 new Niger Uranium ordinary shares ("Consideration Shares").

As previously announced by the Company, the acquisition of URU Henkries was subject to regulatory approval in the form of the consent of the South African Minister of Minerals and Energy, now the Minister of Mineral Resources (the "Minister") as required in terms of Section 11 of the South African Mineral and Petroleum Resources Development Act, No. 28 of 2002 (MPRD Act) pursuant to a 'change of control' occurring in respect of control of the prospecting license resulting from the acquisition (the "Minister's Consent"). 

In accordance with the terms of the escrow agreement with Conyers Dill & Pearman, if the Minister's Consent is not received by the original date as set out in the SPA, or by the extended date as set out in the amendment to the SPA dated 19 March 2009 or if the transaction is unable to complete in accordance with the terms of the SPA, the cash consideration shall be repaid to Niger Uranium and the Consideration Shares shall be sold on the open market through the Company's broker with the proceeds returned to Niger Uranium. 

As this approval has not been received the Board of Niger Uranium has decided not to extend further the long-stop date. Accordingly, the SPA lapses in terms of clause 9.3 and is of no force and effect and no party has any rights or any claims against the other of them arising from such failure of the acquisition to complete.

The Company agreed on 7 October 2009 with the vendors of URU Henkries that as the Minister's Consent had not been received within the allowed time period, the acquisition shall be terminated in accordance with the terms of the SPA.

Accordingly, the Board is in the process of instructing the escrow agent to return the cash consideration of US$1.75 million to Niger Uranium and will provide further instructions in respect of the Consideration Shares in due course. The Company's issued share capital remains unaltered at 117,504,300 ordinary shares.

Update on Uranium interests

Following the termination of the URU Henkries acquisition, the Company's substantial interests will continue to be its investments in Kalahari Minerals plc ("Kalahari Minerals") and UrAmerica plc in South America and its uranium prospecting licences in Niger. 

Kalahari Minerals, Extract Resources and the Husab Uranium (Rössing South) Project, Namibia

Niger Uranium acquired a strategic 15.8% investment (currently 13.2%) in AIM-traded Kalahari Minerals in March and April of 2008 in line with the Company's stated objective to deliver shareholder value by acquiring stakes in viable uranium mining initiatives, particularly in Africa. Kalahari Mineral's principal asset was then a significant stake (now 40.1%) in Extract Resources, held via the company's subsidiary Kalahari Uranium Limited. 

Extract Resources (EXT) is an Australian ASX and Toronto TSX listed uranium exploration and development company that owns and manages the Husab Uranium (Rössing South) Project, 45 kilometres northeast of Walvis Bay in Namibia. 

In July 2009, EXT announced that drilling on its Rössing South property had defined a JORC-compliant resource estimate of 267 million lbs at a grade of 487ppm U3O8, clearly demonstrating that Rössing South has the potential to be a world-class uranium mine. Additional resources in the area are being developed. 

Your board has been very pleased with the investment in Kalahari which is now valued at approximately £51.2 million (based on the closing mid market price of Kalahari's share price on 7 October 2009) compared to the acquisition cost of approximately £12.4 million. The current market valuation of Niger remains at a substantial discount to the value of the Company's interest in Kalahari Minerals and accordingly, the Board will be considering the options for addressing this discount.

Irhazer & In Gall, Tim Mersoi Basin, Niger

Niger Uranium holds eight prospecting licenses in Niger, covering a total area of 1,673,644 acres (6,773 square kilometres). Added together, the Irhazer, In Gall, Kamas 1, 2, 3 and 4 and Dabala 3 and 4 licenses represents one of the largest mineral property holdings in the Tim Mersoi Basin, the world's fifth most important uranium producing district. 

Large-scale radon and geochemical surveys commenced on the 100% owned Irhazer licence area. The exploration team targeted an apparent repetition of the type of geological setting present at Azelik, to the west of the licence area, where a significant uranium resource is being developed. Niger Uranium believes that radon detection, coupled with conventional geochemistry and geological interpretation, is the best means of detecting a potential 'buried' deposit, which may be obscured due to the presence of a cover of younger sediments in the area. The Company awaits evaluation of this survey, following further exploration work on the ground in Niger, which it hopes to commence later this year as and when the security situation in Niger improves sufficiently. 

UrAmerica Plc

On 21 April 2008, Niger Uranium acquired an initial 20.89% holding in UrAmerica plc, a junior uranium mining company engaged in the identification, acquisition and exploration of high-quality assets in Latin America, particularly Argentina, Paraguay and Colombia. 

UrAmerica has exploration permits ("cateos") in the Chubut and Salta provinces, which cover a total surface of approximately 270,000 hectares in areas with proven uranium anomalies and existing uranium mines (the Cerro Solo mine in Chubut province and the Don Otto mine in Salta). UrAmerica has recently finalised an advanced exploration Phase II.b in Salta, concentrating on three areas thought to be the most prospective, Isonza, Cerro Tin Tin North and Las Casitas with the objective to commence drilling operations in 2009.

The independent mining and technical consultancy SRK Consulting was invited to conduct a review of the exploration activities undertaken during the Phase ll.b Salta Province Argentina programme and issued a report in June 2009. SRK has reported good potential for significant mineralisation over a widespread area at the property, evidenced by a uranium anomaly that stretches for several kilometres along the north-southwestern flank of the fold structure at Isonza and similar structures at Las Casitas and Cerro Tin Tin North. SRK issued a set of recommendations in the report that UrAmerica will follow up with in due course.

We look forward to working with UrAmerica, when called for, to provide the technical support that the company requires.

Contacts:

Niger Uranium Limited

Ian Stalker, Executive Director and Acting CEO                                                               Tel: [phone]

Beaumont Cornish Limited                                                                                   Tel: [phone]Michael Cornish

Competent Person for Niger Uranium

Mr. Richard Wadley (Pr. Sci. Nat), Senior Consultant at MSA Geoservices, is the qualified person responsible for Niger and has verified the technical data reported above. Mr Wadley is a consultant to Niger Uranium, with no interest in the company and has consented to the inclusion in this announcement of his name in the form and context in which it appears. Exploration data is acquired by Niger Uranium using best practice quality assurance and quality control protocols.

Forward-Looking Statements:

This press release contains statements that are 'forward-looking'. Generally, the words 'expect,' 'intend,' 'estimate,' 'will' and similar expressions identify forward-looking statements. By their very nature, forward-looking statements are subject to known and unknown risks and uncertainties that may cause our actual results, performance or achievements, or that of our industry, to differ materially from those expressed or implied in any of our forward-looking statements. Statements in this press release regarding the Company's business or proposed business, which are not historical facts, are 'forward looking' statements that involve risks and uncertainties, such as estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements.

These forward-looking statements speak only as of the date they are made.

Glossary of Terms:

Lbs	Pounds, an imperial unit of mass: 1 lb is equal to 0.454 kilograms.
Resource	The term 'Mineral Resource' covers the in-situ mineralisation which has been identified and estimated through exploration/assessment and sampling; and from which Mineral Reserves may be derived by the application of technical, economic, legal, environmental, social, marketing, governmental and political factors.
U3O8	Triuranium octaoxide. 1 ppm U308 = 0.848 ppm U.

JORC	The Australian Guidelines in respect of reporting standards for geological surveys relating to the delineation of mineral resources in the measured and indicated categories

ENDS

 

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