11/09/2008 - 09:56

Rio buys 11% stake in Extract

11/09/2008 - 09:56

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Rio Tinto has emerged as the mystery buyer behind an 11 per cent parcel of shares in uranium explorer Extract Resources Ltd, which could be a hurdle in the company's planned merger with West Perth-based Kalahari Minerals Ltd.

Rio Tinto has emerged as the mystery buyer behind an 11 per cent parcel of shares in uranium explorer Extract Resources Ltd, which could be a hurdle in the company's planned merger with West Perth-based Kalahari Minerals Ltd.

In an substantial shareholder notice to the market today, Rio now holds a 10.9 stake in Extract following the purchase of 23.16 million shares on Tuesday.

The mining major bought 22.8 million Extract shares at $1.20 each and paid about $1.15 each for the remaining shares.

On Tuesday, Extract share price soared 32 per cent to close at $1.22. At 11:44 AEST, shares in Extract were trading at $1.29, up 8c on the previous day's close.

Extract is currently exploring for uranium in Namibia with its Rossing South project bordering Rio's Rossing uranium mine, and its Ida Dome and Husab projects also located nearby.

Rio has previously said it was focused on exploring for uranium around the existing mine.

Last week, Extract announced it had entered into a merger agreement with London-listed Kalahari in a scrip deal worth about $210 million.

Kalahari, which already holds a 39.11 per cent stake in Extract, is offering 1.6 of its shares for each Extract share.

Both companies hold projects in Namibia with Kalahari's portfolio containing tenements prospective for copper and base metals.

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