Australia's Paladin makes 1.011 bln aud takeover for Summit Resources

Australia's Paladin makes 1.011 bln aud takeover for Summit Resources

	Published : Tue, 27 Feb 2007 02:27 By : Agencies Print this Story

SYDNEY (XFN-ASIA) - Uranium miner Paldin Resources Ltd said it has announced a 1.011 bln aud off-market scrip takeover bid for Australian and New Zealand Stock Exchange-listed exploration company Summit Resources Ltd.

The offer comprises one Paladin share for every 2.04 fully paid ordinary Summit shares, implying a price of 5.12 aud per Summit share based on the volume weighted average price (VWAP) of Paladin shares on the ASX over the previous five trading days at 10.44 aud per share.

Paladin said the takeover provides Summit shareholders an attractive premium of around 34 pct to the VWAP for Summit shares on the ASX over the 10 trading days prior to this announcement.

The offer is conditional on the Toronto Stock Exchange consent to quotation of Paladin shares to be issued under the offer on that exchange, and the consent from Paladin's lenders.

There is no minimum acceptance condition to the offer.

Paladin's announcement follows last week's signing of a development agreement with the Republic of Malawi government which will provide a stable fiscal regime for the Kayelekera uranium project for at least 10 years from the commencement of production.

The company is targeting an annual production profile of seven million pounds of uranium oxide per year by 2009 including production from its Langer Heinrich mine in Namibia.

Summit Resources is based in Western Australian with interests in uranium, copper, gold, phosphate and iron ore exploration projects in northwest Queensland.

The company's most advanced project is the Valhalla uranium deposit near the historic mining town of Mount Isa.

The Valhalla deposit, together with the Skal deposit, is part of the Isa Uranium Joint Venture Agreement (IUJV), of which Summit is manager and holder of a 50 pct interest. Paladin holds the other 50 pct interest.

Paldin said a 100 pct interest in the Valhalla/Skal deposits will further strengthen the post-2012 development opportunity at Mt Isa assuming the Queensland state government reverses its policy stance against uranium mining.

The miner said should uranium mining be allowed, a target of production commencing in or after 2012 is a realistic expectation.

(1 usd = 1.26 aud)

paul.daniel@xfn.com