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Small Cap: Extract Resources Soars On Uranium Discovery
January 29th. 2008 - Australasian Investment Review – (AIR)

It’s what every investor in a speculative company wants – a commodity discovery of decent proportions that will propel a stock to new heights and in the process give investors a nice little earner.

Those holding interests in Extract Resources would be pleased by the ‘massive uranium intersection’ the company came across at its Husab uranium project in Namibia.

Following the news of the results, shares in Extract (ASX: EXT) jumped as much as 36% to $1.16 during intraday trading.

Results from a hole drilled at Husab, in Garnet Valley, include an outstanding intersection of 125 metres grading 1,344 ppm U308, the company said.

“This intersect is unusually high for the Garnet Valley area and it should be noted that its influence on the resource model will be limited until closed spaced drilling around this hole can be completed,” managing director Peter McIntyre said.

“Furthermore, the significance of the very high grade, (4.46% U308) zone will need to be investigated in much more detail, with a more intensive drilling pattern required to determine its extent,” he added.
Overall assay results continue to indicate that uranium grades are being maintained or enhanced at depth, with intersection widths showing a tendency to increase substantially with increasing depth.

The Perth-based company said it has extended the date of release of its resource statement for Garnet Valley to include this drill hole data.

Extract has a market capitalisation of about $156 million and is included in the S&P/ASX 200 Materials.

Shares in EXT finished 17% higher at $1.00.

Nylex Dropped By Privateer.

Shares in Nylex (NLX), manufacturer and distributor of plastic products, fell by as much 22.5% after the takeover proposal from CHAMP Private Equity was withdrawn.

“CHAMP today advised Nylex that they will not be making a firm offer on the terms of their indicative proposal of 23 November 2007,” chairman of Nylex, Peter George said.

“Discussions between Nylex and CHAMP have therefore ceased,” he added.

The withdrawal was received after the markets closed on Friday, driving the shares down to open at a 10% discount on Tuesday morning.

Nylex chairman Peter George attributed the withdrawal to the current market volatility.

“Nylex’s board and management were not surprised that the indicative proposal could not be consummated in view of the recent turbulence in global financial markets and remain committed to maximising value for our shareholders,” George said.

“Looking forward, we are strongly positioned to continue to generate growth from our unique group of businesses and derive additional benefits from the restructuring programme.”

On 23 November 2007, CHAMP made a 100% cash offer of $2.65 per ordinary share or convertible note and $0.81 per option. The offer represented a 44% premium over Nylex’s closing price on the same day of $1.84.

Stock ranged between $1.55 and $1.80 during intraday trading, to close at $1.65.

About 121,000 shares had changed hands.

Copyright Australasian Investment Review.
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