KEY POINTS:
Listed gold explorer Heritage Gold is going ahead with a uranium exploration venture in Australia despite the country's long-standing ban on new uranium mines.
The dual-listed company is banking on pressure from rising global demands for "clean" energy to force a policy change by the time it finds uranium. Uranium prices are rising because of plans to build nearly 200 nuclear power plants around the world in the next 10 to 15 years.
On last week's spot market, uranium was US$113 ($155) a pound up from around US$7 a pound in 2004.
Australia's "three-mines policy", put in place by the Labour Party, has deterred investors and limited uranium production there. Uranium mining and processing is also banned in the Labour states of Western Australia and Queensland but they have indicated a willingness to relax restrictions.
Heritage Gold's selected area is in the Northern Territory where one of the country's three uranium mines is operating. The other two are in South Australia.
Outgoing managing director Peter Atkinson said it would be better to explore where a mine was in operation. "And everyone knows we won't find it tomorrow so there's time."
Due diligence concluded the venture, with an Australian syndicate, showed potential. Located in the Dunmarra Basin, the area "appears to be a significant but overlooked geological environment that could host valuable uranium resources".
Atkinson resigned last month but will stay on until a replacement has been found.
The company will continue exploring for gold here.
In its agreement with the Australian syndicate, Heritage Gold will issue 2.5 million fully paid ordinary shares to the vendors immediately after due diligence and another 2.5 million fully paid ordinary shares when the exploration licences are granted.
A further 20 million shares will be offered at a price of A3.5c to "sophisticated and professional" investors.
Heritage Gold shares closed at 10.5c on the NZX yesterday.
