Chinese conglomerate Sichuan Hanlong Group is interested in Bannerman Resources‘ (BAN-T, BMN-Z) Etango uranium project in Namibia, one of the largest undeveloped uranium resources in the world.
Hanlong Mining Investment, a subsidiary of Sichuan Hanlong, sent a “highly conditional proposal” to Bannerman in mid-July to acquire 100% of the junior for A$0.612 in cash per Bannerman share.
As part of its proposal, Hanlong wants a three-month period of exclusivity, and Bannerman’s management says that “is not appropriate,” given “the absence of agreement on price and the conditionality of the proposal.”
Other conditions on Hanlong’s proposal include: due diligence completion by Hanlong before Sept. 30; approvals from China’s State Administration of Foreign Exchange, the National Development Reform Commission and the Ministry of Commerce; a Bannerman board recommendation; obtaining support from major shareholders; and approval from Australia’s Foreign Investment Review Board.
Bannerman’s board said in a statement that it believes the proposal is opportunistic and “timed to take advantage of Bannerman’s low share price, which has been adversely affected by macro issues, such as the events at Fukushima and weak global equity markets.”
The company, based in Western Australia, also said it intends to continue its joint-venture discussions with third parties.
The markets appeared to like the news. Shares of Bannerman surged 25.6%, or 10¢ per share, to close at 49¢ on a trading volume of 1.28 million.
The company’s shares crept up 15% on July 4; 6%, July 5; 9%, July 6; 6%, July 7; and 3%, July 8.
At presstime, the stock traded at 45.5¢ per share.
Bannerman owns 80% of Etango, west of Paladin Energy‘s (PDN-T, PDN-A) Langer-Heinrich mine, and southwest of Rio Tinto‘s (rio-n, rio-l) Rossing uranium mine, which is the longest running and second-largest uranium mine in the world, according to Bannerman. The Etango anomaly is in the uranium-rich Erongo region on Namibia’s coast.
According to a resource estimate completed in July 2009, at a cut-off grade of 100 parts per million (ppm) uranium oxide (U308), Etango has 235 million tonnes at an average grade of 208 ppm U308 for 107.7 million lbs. contained U308 in the measured and indicated category.
Inferred resources are 120.7 million tonnes, at an average grade of 197 ppm U308 for 52.4 million lbs. contained U308.
In addition to Etango, Bannerman’s 80%-owned subsidiary in Namibia holds the Swakop River exploration project. Swakop is 67 km east of the town of Swakopmund. Its mineral licence surrounds Paladin Energy’s Langer-Heinrich uranium mine on three sides.
Bannerman also has three prospecting licences in Botswana for uranium, precious metals, base metals and platinum group minerals.
Bannerman listed as a public company in Australia in 2005, and joined the TSX in 2007.
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