Uranium Still Grey's Area

The Age

Thursday January 12, 2006

BARRY FitzGERALD, RESOURCES EDITOR

URANIUM exploration stocks continue to generate fast bucks for investors. The recently listed Hindmarsh Resources has been the subject of a generous $19.7 million scrip-only takeover bid from Canada's fast-growing Mega Uranium only six months after listing.

The agreed offer also heralds the re-entry into the Australian uranium industry of Tony Grey, the Sydney-based Canadian lawyer who founded Pancontinental Mining in the early 1970s.

Pancon was the group that discovered the vast Jabiluka deposit in the Northern Territory. The rich deposit, now owned by Rio Tinto, has yet to be developed after being frustrated by the Hawke government's ban on new uranium mines in the late 1980s and, more recently, a power of veto on its development held by traditional landowners.

Mr Grey is a director of the Toronto-based Mega, which is headed up by Canadian venture capitalist Sheldon Inwentash. Through a series of rapid-fire deals under Mr Inwentash, Mega has secured ownership of two undeveloped uranium deposits in Queensland - Ben Lomond and Maureen.

Uranium mining is banned in Queensland, but no such problem exists in South Australia, the focus of Hindmarsh's uranium exploration.

Hindmarsh joined the ASX on July 11 after raising $560,000 from an issue of shares at 28 ? each. The raising was part of the group's conversion from a cashbox on the Newcastle Stock Exchange to a focused SA uranium explorer backed by most of the main players in the Adelaide mining market.

Under the Mega offer, Hindmarsh shareholders will receive 100 Mega shares for every 694 Hindmarsh shares.

Option holders will also participate. The offer values the group's shares at 78 ? each based on Mega's closing price on Monday.

Hindmarsh shares yesterday surged 13 ? to 68 ? in response to the offer. Hindmarsh directors said that, in the absence of a higher offer, they would recommend shareholders accept the bid.

Ownership of Hindmarsh will deliver Mega exploration tenements covering 13,600 square kilometres of SA's prospective uranium exploration ground, as well as ground in the Northern Territory.

Hindmarsh managing director Kate Hobbs said the takeover was a "great vote of confidence in the prospectivity and future development potential of the uranium industry in South Australia".

© 2006 The Age

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