Rio Tinto acquires stakes in Kalahari Minerals and Extract Resources

The ink is barely dry on the proposed merger between Kalahari Minerals (AIM: KAH) and Extract Resources (ASX: EXT), and already the first twist in the plot has appeared. Rio Tinto (LSE: RIO), the FTSE 100 mining titan, announced yesterday this is had acquired stakes in both companies, widely believed to have been picked up from battered hedge fund, RAB Capital (AIM: RAB). Rio Tinto now holds a 14.9% interest in Kalahari Minerals, who in turn hold a 39.11% of ASX and TSX listed Extract Resources. Rio Tinto also confirmed that it had picked up a 10.9% stake in Extract Resources. For Rio Tinto, this is all about uranium. Rio Tinto operates the Rossing Uranium Mine in the heart of Namibia’s uranium district, and to the south of Rossing, Extract Resources has been reporting excellent results from drilling on the Rossing South Prospect. It doesn’t take a genius to figure out that Rio Tinto has an interest in knowing what exactly Extract Resources has to the south of one of its largest uranium operations. Kalahari Chairman Mark Hohnen said, “Rio Tinto's major investment in Kalahari is great news for the Company and we welcome them to our shareholder base. The involvement of Rio Tinto, one of the world's leading mining and exploration companies, confirms the world class nature of our uranium investment in Namibia, particularly within the alaskite belt that hosts the world class Rossing Mine. Kalahari believes that Rio Tinto's investment will provide further confidence for shareholders in our decision to acquire the remaining 60.89% of Extract Resources.” Shares in Kalahari Minerals climbed 4% on the news, but investor’s were already contemplating the possibility of a takeover of either either companies, or the new company once the merger completes. ---Proactive Investors UK