KEY POINTS:
After 20 years of unsuccessfully trying to find gold in New Zealand, listed mining explorer Heritage Gold is taking a different tack - exploring for uranium in Australia.
The NZX- and ASX-listed explorer is carrying out due diligence on a joint uranium exploration venture in the Northern Territory.
Despite reporting several promising samples in its Coromandel prospects recently, the company has not struck gold in 21 years of exploration.
Finalised on Friday, the uranium venture was "a chance to broaden the explorer's approach to mineral searching", said managing director Peter Atkinson, who resigned on Friday, but is staying on until a replacement has been found.
The company, which will continue gold exploration here, had evaluated several opportunities since it flagged its change of strategy at a shareholder meeting in September, but this was the most attractive.
"There are a number of minerals and metals that we could search for at the moment that you could argue you're going for because of the price - that's the kind of market we're in."
The Australian syndicate had applied for licences to explore areas potentially holding the type of deposits that had produced more than 80 per cent of the uranium mined in the US, said Atkinson.
Uranium prices are rising because of plans to build nearly 200 nuclear power plants around the world in the next 10 to 15 years, but Atkinson would not guess how profitable the uranium prospect could be.
On last week's spot market uranium was US$85 ($122) a pound, up from around US$7 a pound in 2004.
After listing on the NZX in 1986 at 50c, shares rose to $1.50 in 1987 after highly encouraging sampling from the Mahara Royal prospect on the Coromandel was announced. However, the price hardly moved when the company announced its most recent positive drilling results on February 28, and Heritage Gold ordinary shares now trade for around 5c.
The company's announcement comes on the back of an announcement that three of the company's directors are resigning: managing director Atkinson, founding independent director David Williams and director Ralph Stagg.
Atkinson said he'd wanted to take a less direct operational role in the company for the past year or two. A proposed spin-off of the company's Waihi gold assets into a new company called Mid-Earth Minerals had been a way to allow that, but no suitable manager was found so the idea was dropped in favour of finding someone to take over the whole company.
Atkinson said the new managing director would probably come from Australia.
Heritage Gold will be hoping it can follow the lead of New Zealand-based Summit, a former gold exploration company which headed to Australia in the 1990s and discovered a uranium deposit in Queensland.
Last year Summit shares went from 63c to $3.15 as uranium surged to US$69 a pound.
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 2.5 million more fully paid ordinary shares when the exploration licences are granted.
A further 20 million shares will be offered at a price of A3.5 cents to "sophisticated and professional" investors to fund the investigation of the uranium proposal.
Uranium
* Used to manufacture nuclear energy.
* This week trading for US$85 a pound, up from US$7 in 2004.
* Australia has the world's largest uranium reserves - 25 per cent of known supply.
