www.forteenergy.com.au
Forte Energy NL is an Australian-based minerals company focused on the exploration, evaluation and development of uranium and energy-related projects worldwide.
The Company changed its name from Murchison United NL on 25 November 2008.
Forte Energy has secured an extensive portfolio of uranium projects in the Republics of Guinea and Mauritania in West Africa, where it is pursuing intensive exploration programs. The Company also holds copper and cobalt interests in Queensland and Western Australia, Australia.
Spotlight on uranium stocks after takeover tussle hots up for Hathor as Rio trumps Cameco
Interest in the uranium sector livened up overnight after Rio Tinto (LON:RIO, ASX:RIO) weighed into the bitter battle for control of Canada’s Hathor Exploration (TSE:HAT).
Its US$578 million deal trumped a rival offer from Cameco (TSE:CCO, NYSE:CCJ) and has thrown the spotlight on other unranium stocks, including companies such as Kalahari Minerals (LON:KAH), Uranium Resources (LON:URA), URU Metals (LON:URU), Forte Energy (LON:FTE, ASX:FTE) and Vane Minerals (LON:VML).
The industry has taken a hit in the wake of the Fukushima tragedy in March, the worst nuclear disaster since Chernobyl.
A subsequent rethink of nuclear policy worldwide, with Germany at the vanguard, sent the price of the fuel plummeting, bringing the valuations of the companies mining uranium down with it.
However in recent months faint stirrings of interest in the uranium sector have been detected, as bargain hunting majors looked to take advantage of depressed prices.
The most notable spike in interest came in September when the world’s largest uranium producer Cameco went hostile with a US$530 million bid for Hathor, so that it could add to its portfolio with the large Roughrider deposit in Canada’s Athabasca Basin.
At the time Hathor said the hostile bid was opportunistic and it significantly undervalued the business. The group will then have been pleased to receive a superior US$578 million bid from Rio yesterday. Rio’s cash offer, which has been recommended by Hathor’s board, represents an 11 per cent premium to Cameco’s opening bid.
However, according to Oriel Securities analyst Charles Cooper, Cameco may not be done yet. The Rio bid may not be enough to dissuade Cameco from making a competing offer, he believes.
Summing up the rationale behind the Rio bid, Cooper said: “Rio already has some JV's in the Athabasca basin and the potential acquisition of Hathor would provide a world class uranium asset around which the company could grow its Canadian uranium business and shift its focus from lower grade African and Australian mines to the high grade Athabasca.”
The analyst believes that Rio is attracted to the high grade and low cost uranium production in Saskatchewan because of the falling low grade nature of its maturing Rossing and Ranger mines.
What’s clear is the fact that Rio is committed to its uranium business and it has faith in the fuel source’s future despite the turbulence of recent months.
"The medium and long-term outlook for the uranium market is positive, with uranium assuming a significant role in the world's primary energy needs,” Rio chief executive Doug Ritchie said in a stock exchange statement on Wednesday.
Indeed emphasising a more positive outlook on uranium prices this morning was Fairfax Securities analyst John Meyer, who said: “Prices of uranium which fell following the Fukushima disaster have since recovered suggesting the market still expects nuclear energy to have a key role in the future energy mix.”
Hathor is not the only explorer that’s being picked off by larger players in the mining industry. AIM quoted Kalahari Minerals - which was also believed, by analysts, to have been on Rio’s shopping list in recent months – is currently in talks with a state-backed Chinese mining company.
Kalahari has a major interest in the Husab uranium project in Namibia via its 42.8 per cent stake in Extract Resources (ASX:EXT, TSE:EXT). Rio' nearby Rossing uranium mine has produced more than 260 million pounds of uranium since 1976.
In the spring, China Guangdong Nuclear Power lodged a 290 pence, or £756 million, offer for the company, before revising it down to 270 pence in the wake of the events in Japan. And while both sides were willing to deal, the Takeover Panel here in the UK wouldn’t allow the price reduction.
The restrictions on CGNPC-URC re-bidding were lifted in August. And last week Kalahari revealed that talks have resumed with the potential Chinese bidder.
Other UK listed uranium stocks that would benefit from an upturn in the uranium markets are African explorer Forte Energy, uranium investment fund Geiger Counter (LON:GCL), Uranium Resources – which is up 20 per cent today with drilling news from Tanzania –, URU Metals and Vane Minerals.
