Thursday, 15 February, 2007

by Robin Bromby
The Australian

THEY'RE coming to get our uranium sector.

This week alone, big French and Canadian money has continued to flood into explorers.

The latest development was a move yesterday by French nuclear giant Areva to triple its stake in Northern Territory explorer Northern Uranium, and - more tellingly - take operational control of the junior's main project.

This followed Monday's $23 million raising by Uranium Equities, with much of that sum coming from Canada. Even before this placement, Uranium Equities' largest shareholder was Toronto-listed Laramide Resources, which will be taking $3 million of the placement.

The total placement money will be used on exploring its various properties, including the Alligator River project in the Northern Territory - where the company is in joint venture with yet another Canadian company, Cameco.

Other uranium companies in which foreign groups have substantial equity include Summit Resources, Energy Metals and Paladin Resources, while OmegaCorp has just fallen to a takeover from another Canadian, Denison Mines.

Northern Uranium's main focus is its Gardiner-Tanami "super project", comprising 9950sqkm of tenements in the Granites-Tanami region straddling the Northern Territory-Western Australia border.

Areva, through its subsidiary Cogema, already holds 6.25 per cent of Northern Uranium and will now move to 18.5 per cent.

The French Government-owned Areva is the world leader in nuclear power and manufacturing plants in 40 countries. This week it won a $US5 billion ($6.4 billion) contract to build two nuclear reactors in China's Guangdong province.

Areva operates two mines in Niger, the world's sixth-largest uranium producer.

The deal with Northern Uranium involves Areva buying 6 million shares worth $4.8 million, and as well as taking over operational control of the flagship project, the French company will provide technical support for exploration in Australia and have the right to market uranium mined by Northern that is not already committed to other buyers.

The French will rank as the third-largest shareholder behind the two stakes of 21.7 per cent each held by Washington Resources and Polaris Metals, the two companies that combined their assets to float Northern Uranium. Canada's Mega Uranium also took a 6.25 per cent stake when the company was floated.

Areva is technical partner to Perth-based Berkeley Resources, which is exploring for uranium in Spain. The French can move to a 14 per cent stake by exercising options in Berkeley, but the junior is really only Australian in name now - most of its shares are held in Europe and Canada.

Canadians have been very active among Australian uranium plays in the past two years, taking big stakes in companies like Paladin and Summit.

Another Canadian company, SXC Uranium One, is developing the Honeymoon uranium mine in South Australia, while Mega Uranium has already taken over two Australian explorers (Hindmarsh Resources and Redport). In addition, Mega recently bought the Queensland uranium assets formerly owned by Glengarry Resources and entered a joint venture with West Australian explorer Aura Energy.