China backs new WA uranium play PDF Print E-mail
Friday, 18 January 2013 08:24

China Inc has joined WA's uranium hunt, with the State-backed China Metallurgical Geology Bureau revealed as the major shareholder in new uranium explorer Zeus Resources.


In a deal that ignores the gloom surrounding Australia's limp initial public offering market, Zeus will hit the boards on Monday after successfully raising $13.5 million to jump-start its uranium exploration projects scattered around WA.

The fruitful listing arrangement came, predominantly, through the help of China Metallurgical Geology Bureau's (CMGB) $10 million investment. CMGB, which according to Bloomberg has assets of $US3.6 billion ($3.42 billion), will own 32 per cent of the New South Wales-based company. Little-known Hong Kong-based private company Vast Honour is another significant investor, taking a 31.9 per cent stake.

Zeus said it had been seeking a cornerstone investor to help fund exploration work following the severe drop in uranium prices after the March 2011 Fukushima disaster in Japan.

After a protracted search, it signed a $10 million subscription investment agreement with CMGB in July last year.

It has been reported Vast Honour received its stake through a "finder's fee" after introducing the State-backed enterprise to Zeus.

Zeus is focused on uranium assets in WA, with many sitting close to the State's biggest deposits. Its Lake Way and Yeelirrie South projects sit near Cameco's Yeelirrie deposit - WA's biggest. These projects are also in close proximity to Toro Energy's Wiluna project - WA's most advanced.

Its Narnoo deposit lies close to Energy and Minerals Australia's Mulga Rock project, which was recently upgraded to become WA's second biggest deposit.

The company has four other uranium projects scattered across the State, including the Percival Lakes project, which sits close to Cameco's Kintyre deposit. The deal comes as China revealed plans last year to end its moratorium on new reactor approvals. The Middle Kingdom is building 29 reactors, according to the World Nuclear Association.

China National Nuclear Corporation chairman said last year it would speed up investments in overseas uranium mining exploration, with a particular focus on Australia and Africa, in order to meet the energy company's growing demand for uranium.

In March last year China Guangdong Nuclear Power Group completed the $2.2 billion takeover of WA's Extract Resources, which owns the Husab uranium asset in Namibia.

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