NTU - Northern Minerals

[yap]

Re: NTU - Northern Uranium

Northern Uranium Limited (“Northern Uranium”) has entered into a binding Letter of Intent with leading mineral exploration company, Jiangsu Eastern China Non-Ferrous Metals Investment
Holding Co., Ltd, an affiliate of East China Exploration & Development Bureau (“ECE”)
• ECE to acquire 108 million Northern Uranium shares at $0.145 per share, raising approximately A$15.7m
• Subscription price represents a 58% premium to the 1 month VWAP1
• Investment is subject to ECE due diligence, regulatory and shareholder approvals of Northern Uranium shares
• ECE to emerge with 51% shareholding2
Overview in Northern Uranium

 

[nioka]

Re: NTU - Northern Uranium

Northern Uranium Limited (“Northern Uranium”) has entered into a binding Letter of Intent with leading mineral exploration company, Jiangsu Eastern China Non-Ferrous Metals Investment
Holding Co., Ltd, an affiliate of East China Exploration & Development Bureau (“ECE”)
• ECE to acquire 108 million Northern Uranium shares at $0.145 per share, raising approximately A$15.7m
• Subscription price represents a 58% premium to the 1 month VWAP1
• Investment is subject to ECE due diligence, regulatory and shareholder approvals of Northern Uranium shares
• ECE to emerge with 51% shareholding2
Overview in Northern Uranium

This one looks like the Lynas story reincarnated. I doubt that either paryt will allow a majority shareholding in a company that has such good prospects with strategic resources. Companies like this should go to their own shareholders first. I hold a few NTU on the basis of its rare earth prospects. Obviously that opinion is backed up by the Chinese wanting to get majority control. NTU is one to watch, particularly as a long termer.

 

[nioka]

Re: NTU - Northern Uranium

On 9 August, 2010 Northern Uranium announced it had signed a binding Letter of Intent with Jiangsu Eastern China Non-Ferrous Metals Investment Holding Co., Ltd, an affiliate of East China Exploration & Development Bureau (?ECE?).
Subject to approval from Northern Uranium shareholders, ECE will invest about A$15.7m in your Company at a share subscription price of A$0.145 per share.
The Northern Uranium Board believes the proposed deal is a major development for your Company. It will allow it to move ahead with a funded and aggressive exploration program across our uranium and rare earth portfolio, with the support of a highly credentialed Chinese partner. ECE is very supportive of Northern Uranium?s strategy, and of our operating and off-take arrangements with Areva.
In addition to shareholder approval, ECE?s investment is subject to completion of formal documentation and due diligence and regulatory approvals including FIRB and Chinese provincial government approvals.
On completion, ECE will hold 51% of Northern Uranium?s share capital on an undiluted basis. It will have the right to nominate three representatives onto the Board and, along with the Company?s existing Board members, to approve the appointment of an additional two independent Australian Board members. While this will initially produce a large Board of nine, this will be reviewed over time in light of the size and requirements of the Company and in accordance with applicable principles of Australian corporate governance.
The share price at which ECE may invest in Northern Uranium represents a 58% premium to the 1 month volume weighted average price of Northern Uranium shares (up to and including 4 August 2010, being the last trading day prior to the day on which a trading halt was requested in respect of Northern Uranium shares).
What are the benefits for Northern Uranium?
Northern Uranium is an exploration company relying on the support of capital markets for success and the Board is delighted to have entered into this arrangement with a highly credentialed Chinese counterparty. The transaction validates the strategy of compiling our portfolio of uranium and heavy rare earth elements (?HREE?) projects in Australia. Both commodities are highly leveraged to the ?new energy? market which is set for rapid growth, underpinned by the continued process of urbanisation and industrialisation of China and other emerging economies.

Critically, the proposed investment by ECE will provide the Company with a substantial funding platform to aggressively explore and add value to its asset base. This is at a time when capital market conditions remain very challenging, especially for early-stage explorers such as Northern Uranium. ECE also brings a wealth of exploration experience and skills and access to further funds that will help the Company execute its strategy.
As I mentioned earlier, ECE is supportive of Northern Uranium?s strategic alliance with global uranium leader AREVA in relation to the Company?s Gardiner-Tanami uranium assets, and has confirmed its intent to work in close commercial cooperation with AREVA on uranium related developments at the project. ECE does not intend to control the sale of future products.
ECE background
ECE is a major Chinese mineral exploration, development and mining group based in Nanjing, which has been in operation since 1955 and has more than 4,000 employees.
Its track record includes the discovery more than 160 ore deposits in China, including iron ore, base metals and gold, with a potential value in excess of $10 billion. In addition, ECE has several mines and refining operations including Youxi Jindong lead-zinc mine and refining operations, Fujian Taiyangshan gold mine, Yunan Boka gold mine and Anhui Matou copper-molybdenum mine.
ECE also holds a 22.14% interest in ASX listed minerals explorer, Arafura Resources (ASX:ARU).
What are the next steps?
The Board is now focussed on implementing the steps set out in the Letter of Intent for the completion of due diligence, formalisation of documentation and obtaining of all necessary shareholder and regulatory approvals.
It is expected that due diligence will be completed by the end of September, with shareholder approval documentation (including an Independent Expert?s report on the transaction) to be dispatched shortly thereafter. It is our aim to complete the transaction before the end of this calendar year.
In the meantime, the Board will be focussing on the previously announced drill programme for the Gardiner-Tanami project, including a Reverse Circulation (RC) drilling program, detailed geological and structural mapping of target areas including several new targets, and airborne Electromagnetic (EM) surveys over recently granted tenements.
We will continue to communicate with you as we progress with this exciting stage in the growth of your Company, and we look forward to your ongoing support.
If you have any further questions, I encourage you to contact our Managing Director George Bauk on +61 8 94812344.
Yours sincerely
KEVIN SCHULTZ Chairman

 

[nioka]

Re: NTU - Northern Uranium

NTU up over 20% today. My purchase, in two days is showing over 35% gain. Plenty of ups and downs to come in my opinion. NTU could be a volatile stock until the finances and the failure or success of the Chinese majority holding offer are settled. With the history of Lynas in the background setting a precedent I can't see them getting majority ownership. On that basis I'm happy to invest. The current market cap is very low considering the potential resource.

 

[nioka]

Re: NTU - Northern Uranium

A lot of the risk has now been taken out of an investment in NTU with the news that it is LYC that has been the big buyer and has issued a substantial shareholder notice. They now hold approximately 9.5% and effectively have a blocking percentage. This is good news as the market obviously has confidence in LYC and this is already being reflected in the SP for NTU.

Early days but the possibilities are there.

 

[AngusSmart]

Re: NTU - Northern Uranium

I was about to see what you thought, i was holding this stock since friday and offloaded today. was so glad lynas announcement came out and lit this stock on fire, was a pretty boring day otherwise.

am keen to jump in again, seems like its got good fundamentals but would like to wait a little untill things start happening a bit..

where to from here?....

 

[nioka]

Re: NTU - Northern Uranium

I was about to see what you thought, i was holding this stock since friday and offloaded today. was so glad lynas announcement came out and lit this stock on fire, was a pretty boring day otherwise.

am keen to jump in again, seems like its got good fundamentals but would like to wait a little untill things start happening a bit..

where to from here?....

Personally I was not prepared to sell today. Sometimes it pays to sell on an announcement and buy back as the selling reduces the price. That works where the announcement was expected and the price had factored in the news. In this case the announcement came from left field and was not foreseen so todays price should reflect the extra value that Lynas will add to NTU.

The NTU market cap is low compared to potential. There is however still a lot of water to flow under the bridge but with Lynas the water has risen and will flow faster. NTU is still a spec until drill results prove the resource and until the Chinese controling offer is put to one side.

This is another stock that I am going to use to try to turn $5,000 into $50,000 in two years. Actually multiples of $5,000. But DYOR

 

[KurwaJegoMac]

Re: NTU - Northern Uranium

Lot's of movement in this stock in the past couple of weeks. Some very high volumes and market depth showing the proportion of buyers is much higher relative to sellers - why all the sudden interest in this stock? Perhaps a piece of positive news soon?

 

[Southern X]

Re: NTU - Northern Uranium

I wonder if today's sp movement is in part due to a combination of momo players, but more importantly, fund managers who want a "sexy" REE play to disclose in their August portfolio -- and who have missed this whole REE play to date. On the other hand today's trade won't settle this month.

Concerning yesterday's lost posts:

The Chinese 51%(?) stake, and FIRB is a moot point at least until the truth machine begins to define an economic ore body. They have provided the cash for drilling, but their majority stake does take NTU out of takeover play. Yes, I know, I'm getting ahead of myself here. At this juncture I simply hope there are only a tiny fraction of the LYC dramas.

SX

 

[nioka]

Re: NTU - Northern Uranium

The Chinese 51%(?) stake, and FIRB is a moot point at least until the truth machine begins to define an economic ore body. They have provided the cash for drilling, but their majority stake does take NTU out of takeover play. Yes, I know, I'm getting ahead of myself here. At this juncture I simply hope there are only a tiny fraction of the LYC dramas.

SX

The Chinese offer for a 51% interest is as good as dead and buried. The SP is allready well ahead of their offer. The Lynas purchase is a blocking bid as I see it. Then there is shareholders approval, I doubt they would get that. There is also the FIRB but I doubt it will get that far.

Maybe they will come up with another bid. I doubt that also.

Glad I got into this one early. Maybe it is a bubble about to burst. I doubt that the bubble is fully inflated if that is the case.

 

[Southern X]

Re: NTU - Northern Uranium

Just reading this:

In the short term, five years or more, there is room in the market for non-Chinese production of light rare earths, such as praseodymium, neodymium and samarium. There is room in the market beginning now for new sources of the heavy rare earths, terbium and dysprosium.

China has immense resources of the light rare earths that can be developed over the next 10 years, but the Chinese exploration industry does not believe that sufficient additional resources of the heavy rare earths can be found or developed, at this time, to meet known future needs.

The race is on for the heavy rare earths. Chinese and non-Chinese exploration companies are aggressively looking at REE mining opportunities that can produce HREEs in such quantity as to justify their production. The open issues are pricing, access to processing technology, the relative value of producing REE metals and alloys at the mine and the survival and/or growth of an independent Western (i.e., non-Chinese) rare earth permanent magnet industry.

http://www.theaureport.com/pub/na/7229

Nioka, don't you mean that the Chinese offer is, " dead, cremated and buried." If your speculation proves correct, and I see your point, then a pp will soon be forthcoming to pay the drillers, labs, etc.

At this sp it will be far less dilutive, and I look forward to taking part, with the same deal as ARU at $0.60, and LYC at $0.45.

SX

 

[nioka]

Re: NTU - Northern Uranium

Nioka, don't you mean that the Chinese offer is, " dead, cremated and buried." If your speculation proves correct, and I see your point, then a pp will soon be forthcoming to pay the drillers, labs, etc.

At this sp it will be far less dilutive, and I look forward to taking part, with the same deal as ARU at $0.60, and LYC at $0.45.

SX

There is no doubt that NTU would need more funds to develop a mine etc. OR a partner. That partner may well be LYC. I would not be surprised if a takeover by LYC was initiated. Anything could happen with this stock. I would like to see an SPP and I definitely would take part.

 

[KurwaJegoMac]

Re: NTU - Northern Uranium

NTU in a trading halt today, I imagine it's due to the +22% surge during the day yesterday? Anyone heard any news to say otherwise?

 

[KurwaJegoMac]

Re: NTU - Northern Uranium

Nevermind, just checked the ASX.

They've requested a trading halt for an announcment for a capital raising.

 

[nioka]

Re: NTU - Northern Uranium

There is no doubt that NTU would need more funds to develop a mine etc. OR a partner. That partner may well be LYC. I would not be surprised if a takeover by LYC was initiated. Anything could happen with this stock. I would like to see an SPP and I definitely would take part.

Looks like we are either going to have that SPP...OR ....maybe they are issuing LYC with share offer that will give them a larger holding. Either way it would be a positive move forward.

 

[Southern X]

Re: NTU - Northern Uranium

For LYC to acquire NTU they would have to go into debt or issue further shares. I'm obviously not ruling out an LYC t/o. Though strategically it makes sense at some point in the future for LYC to t/o NTU, but a combination of a couple of cash flow positive years for LYC and a clear (if not defined) idea of NTU's ore body will have to occur.

LYC's only REE shortcoming is its lack of HREEs, and in NTU this problem is profitably resolved. I wouldn't be surprised if LYC, through Rhodia(?) may be putting people together to look at metallurgy. I would be surprised if either the Chinese significantly upped their offer, or LYC made a bid to t/o. The pp's price will be in the $0.20s (I hope), with NTU remaining independent.

SX

 

[KurwaJegoMac]

Re: NTU - Northern Uranium

NTU announced a 2 for 5 renounceable rights issue at 16 cents per share. Quite a discount to the current price!

 

[nioka]

Re: NTU - Northern Uranium

NTU announced a 2 for 5 renounceable rights issue at 16 cents per share. Quite a discount to the current price!

A very good result for shareholders. These rights are tradeable so they are as good as a dividend. While it may cause some volatility in the SP I do believe that the SP will continue to trend up while ever the rare earth price keeps increasing.

The Chinese may come back with an increased offer. They are not yet out of the picture.

 

[Huitzii]

Re: NTU - Northern Uranium

This is very good for existing holders, I wish that I was one of them but im not as yet.
Ive been waiting to see a good entry point in the last week, but it hasn't presented itself yet.
I will be hoping for some consolidation after some short selling after the topups occur hopefully I can get in at about .21 in a couple of weeks time.
good luck to all holders
DYOR

 

[KurwaJegoMac]

Re: NTU - Northern Uranium

A very good result for shareholders. These rights are tradeable so they are as good as a dividend. While it may cause some volatility in the SP I do believe that the SP will continue to trend up while ever the rare earth price keeps increasing.

The Chinese may come back with an increased offer. They are not yet out of the picture.

Fair call - as with most raisings the short term SP will be hit due to the dilution. That being said they've got a revised proposal from the ECE under discussion, it will be interesting to find out the specifics. Either way long term outlook looks good - drilling commencing in early October 2010