Aflease, Southern Cross merger approved

Shareholders of Aflease Gold and Uranium Resources (AFLUY-O, AFL-J) and Southern Cross Resources (SXR-T, SCXRF-O) have approved the planned merger of the two companies that will bring the South African gold and uranium developer onto the Toronto board.

The new company, SXR Uranium One (SXR-T) will have a primary listing in Toronto and a secondary listing in Johannesburg. Aflease shareholders will own 83% of the new company, receiving nine SXR shares for one Aflease.

Southern Cross shareholders approved a one-for-five consolidation of their shares as part of the merger.

Neil Froneman and Jean Nortier of Aflease will be chief executive and chief financial officer of SXR, and Southern Cross’s chief executive Mark Wheatley will be a non-executive director. Aflease will put Froneman and two other directors on the board, which will also have three independent directors. One of those will be chairman.

Aflease brings in the Rietkuil and Dominion uranium projects in the Witswatersrand basin in South Africa. Rietkuil has a measured and indicated resource of 417,000 tonnes at 0.73% U3O8 and 0.8 gram gold per tonne; Dominion sports 6.3 million tonnes at 0.65% U3O8 and 1.5 grams gold per tonne. Inferred resources on the two properties add up to 80 million tonnes at 0.64% U3O8 and 0.8 gram gold per tonne.

A feasibility study on Dominion is expected to be down on paper in April, for possible production by early 2007.

Another Aflease project, Bonanza South, is a combined gold-uranium project with a measured and indicated resource of 3.8 million tonnes at 5.5 grams gold per tonne and 0.09% U3O8.

Southern Cross contributes its four uranium properties in South Australia, the most advanced of which is Honeymoon, with an indicated resource of 2.8 million tonnes averaging 0.12% U3O8. The company is currently working on a development plan for an in situ leach uranium mine there.

Resource estimates have been done on Southern Cross’s three other South Australian properties, and Southern Cross is also earning a 50% interest in exploration-stage properties held by Pitchstone Exploration (PXP-V) in northern Saskatchewan.

Aflease also holds the Modder East gold project, also in the Wits basin, where there is a measured and indicated resource of 17 million tonnes grading 3 grams gold per tonne.