Mega Uranium expands Down Under

Vancouver — Looking to live up to its name, and in keeping with its strategy of growth by acquisition, Mega Uranium (MGA-V, MGAFF-O) has placed Aussie-listed company Redport (RDPOF-O, RPT-A) in its sights.

Mega Uranium has grabbed a 15.6% interest in Redport for a cash payment of $10.5 million and has entered into an agreement to acquire the remaining shares in a conditional off-market takeover offer for 9.36 million Mega shares.

Redport’s principal asset is the Lake Maitland uranium project in the Eastern Goldfields region of Western Australia. The extensively drilled deposit hosts a JORC-compliant inferred resource of 32.7 million tonnes grading 0.033% U3O8 (using a 0.01% U3O8 cutoff grade) for 23.7 million contained pounds U3O8. If a 0.05% U3O8 cutoff is used, the inferred resource shows a higher-grade core of 5.5 million tonnes at 0.086% U3O8 or 10.5 million contained pounds U3O8.

Since its discovery by Asarco Australia in 1972, the project has been tested by 1,605 holes drilled by Mount Isa Mines, now Xstrata (XSRAF-O, XTA-L), Esso Exploration in the 1980s and 1990s, and Redport in 2005. Drilling averaged 7.8 metres depth and was collared on 100-metre intervals with 200-metre-spaced lines.

Lake Maitland is described as a shallow, calcrete uranium deposit hosted in playa lake evaporitic sediments. It occurs in a single mineralized layer, 1 to 3 metres thick, and 2 to 6 metres below surface. With a continuous, higher-grade core area, Redport believes this zone could be exploited in the initial years of a planned mining operation, likely enhancing project economics.

Redport holds four other uranium projects (Mundong Well, Angelo River, Kintyre Rocks and Kintyre East) in Western Australia, plus an 18% interest in the Edwards Creek uranium project in South Australia’s Olympic Dam region. The company also has an A5.5 per lb. U3O8 royalty from production at Paladin Resources’ (PDN-T, PALAF-O, PDN-A) Langer Heinrich uranium deposit in Namibia, scheduled to begin operations in September.

Earlier this year, Mega Uranium completed its acquisition of the private Australian company Future Metals and Energy, which held a uranium deposit (with a historic resource of 6.4 million contained pounds U3O8) adjacent to its Georgetown project in Northern Queensland. Mega acquired the company for 1 million shares.

Mega is finalizing its acquisition of Aussie-listed Hindmarsh Resources (HMR-A), which has uranium holdings in South Australia.

In addition to its uranium resources in Australia, Mega holds exploration projects in Argentina, Mongolia, Bolivia and Canada. With shares notching up 4% to close at $7.18 apiece on the news, the company posts a $382-million market capitalization based on its 53.2 million shares outstanding. The company also plans a 2-for-1 stock split.