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  • Black Range Minerals Attracts A$2.3M Cornerstone Investment  0 comments
    Jan 8, 2013 8:45 PM

    Black Range Minerals (ASX: BLR) has secured unlisted Azarga Resources as a cornerstone investor through a placement that will raise A$2.3 million and provide exposure to an extensive global network of institutional and private investors.

    Azarga has agreed to subscribe for 327,995,000 shares in Black Range at a price of $0.007 per share, giving it a 19.9% shareholding.

    Azarga is a private uranium and heavy rare earths development company founded by Hong Kong-based mining executive Alexander Molyneux.

    It currently owns 80% of the largest known uranium deposit in the Kyrgyz Republic, where it is the operator.

    Further demonstrating the high calibre of Black Range's uranium assets, Azarga intends providing ongoing marketing and financial support to the company.

    It has agreed to introduce Black Range to its extensive global network of institutional and private investors to help realise the considerable value of the company's assets.

    Alexander Molyneux, chairman of Azarga Resources, commented: "We are very bullish about the uranium renaissance to come and believe it will start as early as 2013.

    "Black Range's Hansen Deposit is a real contender to be a high grade uranium producer and we believe Mike Haynes and his team have the right strategy to complete permitting and create meaningful value."

    The additional funds raised will go towards advancing development activities at the Hansen/Taylor Ranch Uranium Project in Colorado, which has an Indicated and Inferred JORC Resource of 69 million tonnes at 600 parts per million (0.06%) for 90.9 million pounds of uranium.

    The money also enables Black Range to continue to pursue the commercialisation of its proprietary Ablation technology.

    Placement terms

    Subject to receipt of the requisite ASX waiver, Azarga will also retain the right to participate in any subsequent share issues Black Range undertakes in the two years following the date of issue of the placement shares, to maintain its equity interest in the company.

    Azarga will also have the right to nominate one person to be appointed as a director of Black Range.

    A general meeting of Black Range's shareholders will be scheduled as soon as practicable, most likely in the second half of February 2013, to consider and vote on the transaction.

    The proceeds of the placement will be payable within 30 days of receipt of shareholder approval.

    Analysis

    The investment is a vote of confidence in Black Range Minerals' management and uranium projects and the positive changing dynamics of uranium demand/supply.

    Black Range is set to bring its Hansen/Taylor Ranch Uranium Project, one of the largest uranium resources in the U.S., into production at a time of short supply.

    The global supply-demand outlook for uranium anticipates near-medium term appreciation in the uranium price.

    The company's share price historically closely correlated with the uranium price, providing excellent leverage to uranium price upside.

    The company continues to receive strong investor support having also recently closed its $2.1 million capital raising oversubscribed.

    Black Range's current market cap. is demonstrably low on a peer comparison basis at less than $0.10 per pound compared to the peer average of about $1.14 per pound.

    There are several factors that could be catalysts for rerating for Black Range including that the company could be producing uranium as early as the second half of 2013 by commercialising Ablation technology.

    Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.

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