Tuesday, 7 August, 2007

by Andrew Trounson and Kevin Andrusiak
The Australian

ACQUISITIONS are high on the agendas of uranium miners Toro Energy and Nova Energy, who yesterday agreed to a $400million merger that will give them more clout in the fast consolidating sector.

In their immediate sight is the Northern Territory's international tender of its Angela-Pamela uranium project near Alice Springs. The tender is expected to attract the attentions of such industry heavyweights as Canada's Cameco and Mega Uranium, as well as Rio Tinto's ERA and Perth-based Paladin.

"Without the necessary market capitalisation to participate, both Toro and Nova will miss growth opportunities, whereas the merged group will have the scale to play an active role in sector consolidation in parallel with a greater flexibility to fasttrack project development," Toro chief managing director Greg Hall said.

Under the deal, Adelaide-based Toro is offering 5.5 of its shares for each share in Perth-based Nova in a deal that has been backed by the Nova board.

Nova's major shareholder, Oxiana, is also backing the deal, along with other Nova shareholders Argonaut and Allarrow.

The Melbourne-based gold and base metal miner Oxiana also has a 57 per cent stake in Nova and will emerge with a 46per cent stake in the merged entity, while Argonaut and Allarrow will emerge with about 7.5per cent between them.

"I was full of encouragement for those two companies to have a chat," Oxiana chief executive Owen Hegarty said. Mr Hegarty said there were no plans to bringthe merged company into Oxiana.

"It has the potential to be a powerhouse in its own right, whether we are a major shareholder, majority shareholder or 100 per cent shareholder," he said.

Mr Hall said the merger deal was brokered by the non-Oxiana board members on both sides.