17/03/2011 - 10:32

Japan fallout foils $1.1bn Mantra bid

17/03/2011 - 10:32

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The world's fifth largest uranium producer has backed away from a $1.1 billion takeover of Perth-based Mantra Resources on concerns Japan's nuclear crisis would harm the local uranium industry.

The world's fifth largest uranium producer has backed away from a $1.1 billion takeover of Perth-based Mantra Resources on concerns Japan's nuclear crisis would harm the local uranium industry.

Russia-based ARMZ Uranium Holding Co informed Mantra today that the nuclear catastrophe unfolding at Fukishima's nuclear power plant was likely to have a "material adverse effect" on Mantra's financial position and operations.

"As such ARMZ considers that the condition precedent in the [scheme implementation agreement] relating to material adverse change is not capable of satisfaction," Mantra said in a statement today.

The news has sent investors fleeing from Mantra stocks, with the company slipping 29.3 per cent at 10:30AM (WST), to trade at $4.73.

Africa-focused Mantra and ARMZ announced a scheme implementation agreement (SIA) on December 15, where Mantra backed ARMZ's offer of $8.00 per share for the target.

The Russian miner said it would, however, evaluate alternative options for a takeover.

"ARMZ has, in the same communication, also indicated that it is willing to explore how the transaction may proceed by way of an alternative approach in accordance with its obligations," Mantra said.

Mantra, which is chaired by takeovers veteran Ian Middlemas, said it would consider its options and provide market updates in due course.

The company holds direct and joint venture interests in uranium exploration tenements in Tanzania and Mozambique, with its flagship Mjuju River uranium project at pre-feasibility stage.

The pre-feasibility study indicated Mjuju River to hold 55.8 mllion pounts of uranium, whihc would support annual production of 3.7 million tonnes per year of uranium over a minimum 12 year mine life.

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