Chinese buy into uranium
THE flow of Chinese investment into Australian resource companies is continuing to gain pace, with private investors set to emerge as major shareholders of uranium play Cauldron Energy.
The Perth-based company, which comes under the control of Cape Lambert's Tony Sage, went into a trading halt on Friday, pending an announcement regarding a significant capital raising supported by Chinese interests.
It is understood two private investors will inject up to $10 million into the company, which has a market capitalisation of about $35m, to emerge as significant shareholders in the junior. Cauldron was formed this year through the merger of Scimitar Resources and Jackson Minerals, with the aim of attracting funds to develop uranium projects in Australia and Argentina.
Shares in Cauldron are frozen at 47c and the deal to the Chinese is expected to be offered between 45c and 50c, comprising a convertible note and share placement.
The Howard government lifted a ban on uranium exports to China in 2006, but there has not been a flood of investment into projects for yellowcake, though that is expected to change.
The Asian giant made its biggest investment to date in Australian uranium last month, when state-owned nuclear giant China Guangdong Nuclear Power agreed to pay up to $100m for up to 73 per cent of Perth-based junior Energy Metals.
Chinese investment in Australia's resources continues to cause heated debate but in the past couple of weeks FIRB has started to approve a list of applications by state-owned companies.
The deal is not expected to need FIRB approval, because it is through private individual investors and comprises both the convertible note and placement.