02/03/2009 - 11:51

Japanese buy into WA uranium project

02/03/2009 - 11:51

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Two Japanese companies will buy into the Lake Maitland uranium project in Western Australia after owner Mega Uranium sold a 35 per cent stake for $77 million.

Japanese buy into WA uranium project

Two Japanese companies will buy into the Lake Maitland uranium project in Western Australia after owner Mega Uranium sold a 35 per cent stake for $77 million.

Canadian company Mega has signed a non-binding agreement with ITOCHU Corporation, the world's second largest uranium trading house, and the Japan Australia Uranium Resources Development Co (JAURD).

JAURD represents three Japanese utilities; Kansai Electric Power Company, Kyushu Electric Power Company and Shikoku Electric Power Company.

Under the proposed farm-in and joint venture deal, ITOCHU and JAURD will make staged payments of $US49 million ($A77 million) which will go towards feasibility studies for Lake Maitland.

The deal is subject to due diligence, approvals from the boards of all three companies and approvals from the necessary regulatory bodies.

In a statement, Mega Uranium said it well financed and, together with JAURD and ITOCHU, can meet the capital expenditure requirements for the project which has an estimated capital cost of $US85.1 million.

Production at the project is estimated at 1.65 million pounds of uranium oxide per annum over a mine life of 10 years.

Operating costs have been pegged at $US16.60 per pound of uranium oxide.

Recently, Mega sought approval from the state government to mine the deposit which is located 130 kilometres southeast of Wiluna.

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