IBI Corp. is banking on uranium in Uganda

Less than 8% of Uganda’s 30 million population has access to electricity and power shortages have severely curtailed economic growth. Expensive fuel imports and severe drought in the landlocked East African nation have exacerbated the problem.

The energy crisis presents an opportunity for IBI Corp. (IBI-V). The Canadian junior holds about 14 concessions or 2,000 sq. km of permits on land prospective for uranium in Uganda and believes developing uranium deposits and building a nuclear energy program will help solve the country’s enormous power shortage problem.

IBI’s flagship project is Mubende, a 1,260 sq km uranium property in south-central Uganda, about 100 km west of Kampala.

IBI Corp.’s president and chief executive, Gary Fitchett, says he met with Ugandan President Yoweri Museveni on Jan. 30 to outline IBI’s uranium strategy for the nation and that the president asked him to complete a detailed strategy and a proposal within six months.

Now IBI’s advisory board will flesh out the details of a proposal for a nuclear energy program. “The Uganda government has indicated that even with full utilization of the country’s potential resources suitable for hydroelectric power generation, the country would still face an electrical power shortfall,” Fitchett says.

What IBI envisions is essentially a public-private partnership to build nuclear power generating facilities, which would be supplied with uranium from the mines IBI plans to build down the road.

IBI believes it has the wherewithal to develop a private-public partnership with the government and has excellent contacts within the government to help make that happen.

“One of our IBI directors – Elly Karuhanga — is a very important person in Uganda – a former MP, lawyer and advisor to the president and he lined up the meeting we had Mr. Museveni,” Fitchett explains.

As for its uranium exploration work, Fitchett says aerial surveys completed for the government this year with funds from the World Bank (also known as the Uganda Countrywide Airborne Radiometric and Magnetic Survey) demonstrated about 30 anomalies on IBI’s Mubende uranium property.

The next step is ground work, scintilometre study, rock sampling and lab analysis, Fitchett says, followed by drilling.

Part of the money IBI will use to develop IBI’s Mubende project comes from the company’s 2007 sale of its Namekara vermiculite mine to Rio Tinto (RTP-N, RTP-l) for US$5 million.

In terms of investing in Uganda, Fitchett says he has confidence in the country and its government. “In the eight or nine years IBI has worked in the country we’ve never had any interference,” he says.

“We did our due diligence back in 2000 before we put money into the country for vermiculite and we’re satisfied that the president’s thinking is very positive and businesslike toward development and that he has a lot of respect in the world community.”

President Museveni has ruled Uganda since 1986.

In addition to uranium exploration, IBI Corp is building a portfolio of gold properties in Uganda and Tanzania. It holds about 1,251 sq. km of land in southeastern Uganda’s greenstone belt, through its 20%-owned affiliate company, Grey Crown Resources.

Paul Sherwin, president and chief operating officer of Grey Crown, is chairman of the Uganda Chamber of Mines, sits on the president’s investors’ roundtable and is also chairman of the government’s Minerals and Oil Subsector Committee, a group made up of about 25 senior business executives.

At presstime IBI Corp was trading at about 1.5¢ per share. Over the last year it has traded in a range of 1¢-3.5¢ per share. The junior has about 286.5 million shares outstanding.