News

June 18, 2008

Kalahari Continues To Get More Credit For Its Uranium Investments Than For Its Own Projects

By Our Man In The City

Against the management’s best efforts to position Kalahari Minerals as a base metals player, the market still rates the company on its investment in ASX-listed uranium explorer Extract Resources. The continued discovery of strong uranium grades during drilling programmes by Extract certainly hasn’t done Kalahari’s share price any harm, having been the key driver in the past six months or so. Unfortunately the market hasn’t responded as well to Kalahari’s own exploration updates, which last week included details of copper intersections including 24 metres at 1.2% and 16 metres at 1.9% at the Witvlei project in Namibia. Shares in Kalahari slipped 0.25p to 41p as these encouraging results were overshadowed by news that the company would participate in a share placing by Extract, spending A$11.9 million to maintain its stake at around 39 per cent.

This cash commitment shouldn’t have been a surprise, given that Kalahari declared intentions earlier this year to protect its level of investment in the uranium business. “We set out to raise £12 million, a third going on the company's base metals projects and the remainder ready for when Extract next did a share placing,” says chairman Mark Hohnen. “We ended up getting £14.4 million as several new investors wanted to come in, including Blakeney Management and Henderson Global.” Also new to the...