South Australian uranium mine set for Russian buyout

The owner of the Honeymoon Well uranium mine in South Australia is set to be purchased by its major Russian shareholder.

The buyout will be completed in the September quarter as shareholders of Canadian company Uranium One accepted an offer from the Russian State Corporation for Nuclear Energy, Rosatom.

A subsidiary of Rosatom currently owns around 49 per cent of Uranium One, with the new deal signalling 100 per cent ownership rights, ABC reported.

Argonaut Securities analyst Matthew Keane says the Uranium One acquisition is representative of the growing appetite for Australia's uranium reserves by foreign investors.

"There's a number of really good deposits here that are within the range of being developed in the next decade,” Keane said.

"Uranium is a longer term play. Assets (deposits) take a longer time to go from the pre-development phase into production."

Keane said the last three years has seen both Russia and China purchasing uranium projects around the world to secure supply for their nuclear reactors.

"For example, the Husab deposit in Namibia was bought by the Guangdong Nuclear Power Company from Australian miner Extract Resources,” Keane explained.

"A subsidiary of the state-owned Rosaton purchased the Mkuju River project in Tanzania from another Australian company, Mantra."

As Australian Mining recently reported, demand for uranium is set to outstrip supply by more than 11,000 tonnes this year, creating more opportunities for investment in the Australian sector.

Adam Myers, a corporate finance partner with BDO, recently noted that with some junior uranium companies running low on funds, mergers and acquisitions would become more likely.

"There's certainly opportunities to pick up good-quality projects because companies are really running out of cash," he said.

"It's worth looking at the market and seeing if there is a strategic deposit you can pick up."

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