Urge To Merge For Yellowcake Juniors

The Age

Wednesday May 3, 2006

BARRY FitzGERALD

BOOM uranium exploration float Toro Energy has predicted that a wave of consolidation and rationalisation will wash over the 60 locally listed junior companies hunting for uranium.

Toro managing director Greg Hall said the consolidation would be a response to some of the juniors not finding uranium to mine, as well as the industry-wide need to discover deposits at sufficient rate to catch up with rampaging global demand.

"A key upside of consolidation will be that remaining uranium exploration companies can build greater financial strength and talent pools, and this in itself will enhance prospects of commercial discoveries able to service world demand," Mr Hall told the Adelaide mining conference.

He said only 55-60 per cent of global uranium consumption was from newly mined reserves, with the remainder drawn from a diminishing stock of uranium inventories and reprocessed material.

"These secondary sources are rapidly drying up and are being outstripped by new demand," Mr Hall said. He estimated that uranium mine production needed to increase to about 80 per cent of uranium demand. Even with planned expansion in Canada and Australia, a significant shortfall would remain.

Also at the conference, former Normandy Mining chief Robert Champion de Crespigny lamented the falling profile of local mining companies in international markets.

"We have lost many companies overseas but there are only two ways to avoid being taken over," he said. "There is no better defence than to really perform." Normandy was taken over by Newmont in 2001.

© 2006 The Age

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