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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (18079)	4/21/2008 1:18:31 AM
From: LoneClone	Read Replies (1) \| Respond to of 193040

Rand Uranium Expects to Be in Global Top 10 By Charlotte Mathews 18 Apr 2008 at 11:30 AM GMT-04:00 resourceinvestor.com JOHANNESBURG (Business Day) -- Rand Uranium, the newly created company formed by Harmony Gold Mining and the Pamodzi Resources Fund, yesterday said it would become the world's ninth-largest uranium company when output starts in three years. Harmony CEO Graham Briggs also said the company had set its sights on listing on a major stock exchange, probably Toronto or London, with a dual listing on the JSE once it has begun production. Briggs was briefing the media and analysts visiting Rand Uranium's assets near Randfontein. Corporate activity in the uranium sector has stepped up in the past five years because of a steep rise in the spot price to a peak of about $138/lb last year from $10/lb in 2002, although the price has since fallen to $68. The main price driver is growing demand for alternative energy sources and dwindling supplies of uranium. Rand Uranium is 40% owned by Harmony [NYSE:HMY; JSE:HAR] and 60% by Pamodzi Resources Fund [JSE:PZG], which is Africa's largest private equity fund, planning to invest $1.3 billion in various assets in the next three years. The fund will allocate 10% of that investment to activities that create new direct jobs, sustain jobs by extending the life of mining operations, develop junior miners and source products from enterprises owned by blacks or women, fund chairman Ndaba Ntsele said. Harmony will realise about R1.9 billion ($244.8 million), at present exchange rates, from selling the fund a stake in its Randfontein gold and uranium assets, Briggs said. The deal has received competition authority approval and all other conditions should be met this quarter. The assets include the three Cooke underground shafts, now producing about 230,000 ounces of gold a year, and a dump retreatment operation producing about 40,000 ounces of gold. If they continued to mine only gold, the first Cooke shaft would close next year and the last in 2019. The uranium resource is contained in a number of surface dumps, which have been extensively analysed by Harmony, and there is also uranium underground, not as well defined. The grade of uranium in the Cooke dump is about 0.215 kilogram per tonne, which is high compared with 0.05-0.07kg/t in other companies' uranium surface dumps, Rand Uranium CEO John Munro said. Based on present estimates, about 185,000 pounds of uranium a month could be produced at a cash cost of $30-$35/lb, he said. Those costs would be offset by gold income. About R1.7 billion ($219 million) would be spent to build a uranium plant capable of processing 500,000 tonnes of material a month and to prepare a new dump site. The company's operations will remove a major eyesore in the Randfontein area: the Cooke dump, containing about 83 million tonnes of tailings from past gold mining. The dump sits on porous dolomite rock, so there is potential leakage into groundwater. Once reprocessed, the material would be moved to another site away from dolomite, Harmony operations director Bob Atkinson said. Harmony was already one year into what was expected to be a three-year process to obtain permits for a new site. Several possible sites had been identified.