Thursday, 11 October, 2007

by Ross Louthean
MineWeb

The same week that Toro Energy Ltd announced it was advancing its marriage with Nova Energy, another proposed merger was announced between Monaro Mining NL and Uranium King Ltd.

Is there a trend? A merger implementation agreement was announced today between Monaro Mining NL (ASX: MRO) and Uranium King Ltd (ASX: UKL) to put their uranium businesses together to form what both described as an "internationally competitive" uranium company.

Sydney-based Monaro was the first Australian uranium explorer to acquire ground in the Kyrgyz Republic, covering historic mines and orebodies outlined during the Soviet era. It also can earn 75% equity in a number of exploration licences in Australia's Northern Territory, Queensland and Western Australia.

Uranium King, listed a year later in mid 2006 holds properties in the United States including the Rio Peurco near Albuquerque, New Mexico and Apex-Lowboy properties in Nevada that have combined JORC-compliant inferred resources of 6.1 million lbs.

Monaro's chairman Warrick Grigor, a high profile stock market commentator who runs the Far East Capital investment group, is proposed as chairman of the merged entity.

Under terms of the proposed merger, shareholders of Uranium King will receive five Monaro shares for each seven shares they hold, and Uranium King will become a wholly owned subsidiary.

"Monaro will also make private offers to exchange Uranium King's unlisted options at a ratio of 0.48 Monaro shares for each option," Monaro stated. The transaction could see the merged company having a market capitalisation of $A100 million.

The announcement follows Wednesday's update report from Toro Energy Ltd that it was advancing towards a merger with Nova Energy after major shareholder Agincourt Resources passed in its 57% holding, taking Toro's interest to 60.2%.

There was an umbrella in this exercise, for Toro was listed last year when Oxiana Ltd and associated company Minotaur Exploration pooled their uranium properties together that saw Toro list early in 2006. Sometime later Oxiana took over Agincourt Resources which had spun off Nova Energy.

While the sausage factory is pumping out as much as one new uranium explorer IPO each week on the Australian Stock Exchange, there is a sense the frenetic tempo has been tempered, first with the uranium price dipping to the $US70/lb range before strengthening. This saw a significant change in the market capitalisation of uranium juniors in the past two weeks. Second, from the growing realisation that near-term uranium mine developments are likely only in South Australia and the NT.

Western Australia's Premier Alan Carpenter remains obstinately opposed to uranium mining and the changing of the guard in Queensland, with Anna Bligh taking over from retiring veteran Peter Beattie will, in the opinion of some industry observers see Queensland moving from Beattie who was somewhere between a fence sitter and an opposer to Bligh who is considered to be as flexible as Carpenter on this issue.

South Australia is now regarded as the most exploration and mine-development friendly and is not coy about promoting new uranium projects - a factor that has seen several new uranium explorers set up office in Adelaide.

PepinNini Minerals NL's new Adelaide office has expanded space to make room for uranium joint venture partner China's metal group Sinosteel Corporation.

Perth junior Talisman Mining Ltd, which is exploring for gold, base metals and iron ore in northern WA, decided that joining the throng of juniors that have spun off their prospective uranium ground into an IPO was perhaps a skinny proposition. So it has proposed to pool its large uranium targets with nearby ground by another junior Proto Resources & Investments Ltd to provide more exploration clout.