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Tanzania uranium exports affected by japan's natural disaster

Discussion in 'Major Projects in Tanzania' started by Juma Contena, Mar 24, 2011.

  1. Juma Contena

    Juma Contena JF-Expert Member

    Mar 24, 2011
    Joined: May 21, 2009
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    An agreed takeover deal for a uranium explorer that nearly collapsed last week when Japan’s nuclear crisis escalated has been resurrected after the Australian-listed target accepted a 12 per cent cut in the cash terms to just over A$1.02bn ($1.03bn).

    Shares in Mantra Resources, whose flagship asset is the Mkuju River project in Tanzania, plunged 28 per cent on Thursday when ARMZ, the world’s fifth largest uranium producer and a unit of Russia’s state-owned Rosatom nuclear power company, withdrew an takeover deal agreed three months earlier worth A$1.16bn

    However, after days of intense negotiation between executives, bankers and lawyers in Barbados, the two sides thrashed out fresh terms on Tuesday, with the cash offer price cut from A$8 to A$7.02 a share. Mantra shares surged A$1.39 or 26 per cent to close at A$6.68, below their day’s peak of A$6.75.

    The newly agreed deal, even at the reduced price, provided a rare piece of positive news for the world’s uranium miners and explorers, whose share prices have been hit hard by Japan’s nuclear crisis.

    Mantra’s prospects were undermined as a number of countries warned that their nuclear power expansion plans were on hold as authorities re-examined safety measures after a string of failures at Japan’s Fukushima power plant.
    ARMZ last week threatened to invoke a so-called “material adverse change” clause for it decision to walk away from Mantra.

    It said Mantra’s business, financial positions and prospects were likely to be affected as the Japanese authorities battled to control damage at the nuclear plant’s reactors. However, the Russian group also said it was prepared to renegotiate the Mantra deal.
    Rosatom is a former Russian ministry, converted into a state corporation in 2007. It accounts for one-fifth of the new reactors under construction worldwide and 17 per cent of global nuclear fuel fabrication. It aims to build a larger share in both segments.

    Until recently, nuclear power had offered a big opportunity for Russia to diversify its economy away from oil and compete in one of the few high-technology areas in which it has world-class expertise.

    Mantra was not available for comment, but in a statement it said it had accepted the revised terms after considering “all available options” and advice from its financial and legal advisers. Mantra was advised by RBC Capital Markets and Haywood Securities, while BMO Capital Markets acted for ARMZ.