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URU Metals Ltd

  • BY: Andrew Hore |
  • POSTED: 13/07/2012 |

URU Metals Ltd is focusing on its nickel joint venture in South Africa and it plans to spin it off into another quoted entity.

URU owns 45% of the joint venture with South African Nickel owning 40% and Umnex Mineral Holdings 15%.

The joint venture has two projects: Burgersfort and Zebediela. The preliminary economic assessment of Zebediela projects a pre-tax and pre-royalty net present value of just over $1bn, with a payback period of less than four years. An open pit mine producing 56.6m lbs of nickel a year for 25 years is possible on the basis of indicated resources of 485.4m tonnes at a grade of 0.245% nickel. Despite the low grade, Zebediela should be a lowest-quartile cost nickel producer. Investment of $650m will be required to get Zebediela to production.

URU still has its original uranium assets in Africa but they have been put on the back burner for the time being.

Former Cameco Corporation director Roger Lemaitre was appointed chief executive in February. David Subotec is joining the board as representative of URUís largest shareholder NWT Uranium Corporation.

There was $5.25m in the bank at the end of September 2011 and there is still more than $3m left. The pre-feasibility study for Zebediela will cost $8.3m but this is likely to be spent after the joint venture is spun off.

At 5.12p a share, URU is valued at £5.81m.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFJune2012_33.pdf

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