Antinuclear

The 12-for-7 underwritten issue of new shares at $1.53 a share represents a near 30 per cent discount on ERA’s share price before the stock went into a trading halt. The funds will go a long way to overcoming ERA’s water-handling issues, as well as funding potential mine life-extending activities…..  Rio is also to act as sub-underwriter to the equity raising. Should that role be fully utilised, its holding in ERA could increase to 82 per cent, reducing liquidity in what is an already thinly traded stock.

ERA has been producing uranium at Ranger for 30 years and is only the second mine in the world to have produced more than 100,000 tonnes of uranium. But its shares have been in free fall for the past 12 months on the realisation that despite the long production history, it has not been on top of the environmental threat that a record big wet in Kakadu poses.

The build-up of water around the mine and in its pits forced the decision in January to suspend processing operations as a ”precautionary measure” to ensure levels in the operation’s tailings storage dam remained below the authorised limit. More rain forced a further suspension to late July…..

Rio’s decision to back ERA’s equity raising suggests Rio is confident that ERA’s Jabiluka deposit near Ranger might one day be developed.

Jabiluka is one of the biggest undeveloped uranium deposits in the world but its development is being vetoed by traditional owners.     http://www.theage.com.au/business/era-begging-for-500m-boost-20111012-1ll13.html#ixzz1ahltBWq2