Tuesday, 24 April, 2007

by Jamie Freed
Sydney Morning Herald

CONTROL of the Bigrlyi uranium project in the Northern Territory could be up for grabs after two of the three joint venture partners said they have been approached for their respective stakes.

Canada's Denison Mines, which has a stake in one of the joint venture partners, has been deemed the most likely suitor.

Cash-starved Sydney explorer Southern Cross Exploration, which owns 5 per cent of the 6500 tonne deposit, yesterday said it had received a "serious approach". Its shares soared 3.7c to close at 13c.

Managing director Boris Ganke said the approach was from a party familiar with the project. Several sources pointed to Denison as the front-runner, since Paladin Resources has denied involvement.

West Perth company Energy Metals, the deposit's majority owner and operator, yesterday reiterated it had also received approaches from "a number of major uranium companies" for its 53.3 per cent stake.

Paladin owns 41.7 per cent of the project. But managing director John Borshoff said his company was not behind the approach to Southern Cross and did not plan to make an offer due to the stake's small size.

He said Paladin had not received an approach for its share of the deposit.

Mr Borshoff said he thought Paladin and Energy Metals held pre-emptive rights over the Southern Cross stake. Energy Metals could not be reached for comment but Mr Ganke said the pre-emptive rights situation was not clear.

Mr Borshoff said Denison, which owns 12 per cent of Energy Metals, might be interested in increasing its exposure to Bigrlyi. Under a strategic alliance deal, Denison has first right of refusal over Energy Metals' stake in Bigrlyi.

Denison last week dropped its $170 million bid for OmegaCorp when AIM-listed Central African Mining & Exploration swooped in with a higher offer.

Jindalee Resources, which owns 38 per cent of Energy Metals, has indicated its stake could be up for sale.

Southern Cross said it might begin a sales process by inviting expressions of interest. The stake has a book value of $7.5 million but Mr Ganke implied the company expected to receive more than $10 million for its holding.

Far East Capital analyst Warwick Grigor said "dozens of companies" could be interested in the Bigrlyi deposit, which has an average grade of 0.21 per cent.

Referring to its size, he said: "It would certainly be useful to own but it's not something necessarily that big multinational companies would want."