20th Nov 2013 09:30
LONDON (Alliance News) - Xtract Resources PLC Wednesday said it has paid Aardvark Uranium Ltd USD100,000 to get an exclusive 90-day period to conduct the due diligence necessary in advance of a possible acquisition of Aardvark's Namakwa Surface Uranium deposit in South Africa.
The potential buy comes as South Africa looks to increase the amount of nuclear energy it produces.
"The Namakwa Deposit is at an advanced stage and there is excellent infrastructure in the area. No further geological work or drilling would be required to evaluate the central zone and our due diligence will concentrate on the consideration of the metallurgical test work programme that would be required to confirm recoveries and determine the capital cost of a plant," Xtract Chief Executive Jan Nelson said in a statement.
"South Africa is looking to increase its contribution to nuclear power electricity generation from 5% to 30%. The Namakwa project fundamentals position it well to become a supplier to the new generating capacity," he added.
Nelson added that the company expects Uranium prices to rise because the cancellation of several uranium projects in Russia and Kazakhstan will reduce supply to the market.
The Namakwa deposit covers an area of 58,375 hectares in the Northern Cape province of South Africa some 45 kilometres north of the town of Springbok. It has a valid prospecting right.
Xtract Resources shares were up 8.5% at 0.255 pence Wednesday morning, one of the biggest gains on AIM.
By Steve McGrath; [email protected]; @SteveMcGrath1
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