Coal miner buys stake in A-Cap

Staff Writer | Friday May 8, 2009 00:00

In a statement, the mining and investment company which also has interests in uranium, said the purchase was part of a placement by A-Cap of 50 million new shares at 20 Australian cents apiece to raise A$10 million.

Under the terms of the placement, Polo Resources will be invited to nominate one member to A-Cap's board. 'A-Cap intends to use the funds raised to advance the Letlhakane Uranium Project in Botswana, including the completion of a feasibility study and further exploration with the objective of increasing the resource base of the project,' Polo Resources said in a statement on Wednesday.

A-Cap has previously announced an inferred resource for Letlhakane comprising 280 million tonnes at a grade of 158 parts per million tri-uranium octoxide for 98 million pounds of U3O8, a cut-off grade of 100ppm. In March, Polo said it had agreed to buy a nine percent stake in Australia's uranium explorer Berkeley Resources for A$5 million. Polo Resources shares were down 1.5 percent at 3.43 pence on the London Stock Exchange.

A-Cap also has operations in Australia, China and Botswana. Besides the Letlhakane project, it has a prospecting licence covering 4,500km2 of territory in the Serule area, which it says has significant uranium deposits. The company announced in December that it will apply for a mining licence from the government of Botswana by early 2010. A-Cap initially came to Botswana for copper-nickel exploration, but went into uranium prospecting when prices for the metal improved. Its current project was previously owned by Falconbird of Japan in the 1970s and 1980s.

Interest in uranium as a source of energy has risen partly because nuclear plants are environmentally friendly as they emit a tiny fraction of carbon dioxide that causes global warming. It has been used to produce nuclear weapons for more than 50 years and electricity for more than 40 years.