2009 Media Releases

August 20, 2009

Deutsche Bank initiates coverage of Extract Resources Ltd

Deutsche Bank has initiated coverage of uranium mining company Extract Resources Ltd (ASX:EXT) with a Hold recommendation.

Research analyst Paul Young initiated coverage with an AUD 7.50 twelve month price target.

Mr Young said, “Extract's Rossing South project in Southern Namibia is world class, with a resource of 267Mlb of uranium (U3O8), and the potential to increase to more than 450Mlb. Rossing South is one of the world’s largest undeveloped uranium deposits where mine life is expected to be greater than 20 years.”

According to Deutsche Bank research, the production of the Rossing South project will be significant at approximately 15Mlb per annum, which equates to approximately 8% of global demand. Cash costs should be approximately USD 25/lb placing the operation in the second quartile of the global uranium cost curve. “We have modeled a USD 750million 15 Mtpa operation, with first production in the second half of 2013, and a ramp-up to 15Mlb per annum by mid 2014,” noted Mr Young.

Despite attractive exploration upside, and the belief that Rossing South is a world class discovery, Deutsche Bank rates Extract as a hold, as the stock is currently trading at approximately 1x the NPV (AUD 8.33/share) and within 10% of the AUD 7.50 price target.

Extract Resources aims to explore, evaluate, develop and produce U3O8 from its advanced projects, as a source of fuel conversion for low-cost, environmentally friendly nuclear power. The company's primary business focus is in the African nation of Namibia, in which it has a large land position of 2653km2 over several licenses. Extract Resources is based in Perth, Western Australia.

For further information, please contact:

Michelle Chaperon (02) 8258 1311


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