BHP Billiton Ltd (
recently entered into an agreement with Cameco Corporation to sell
its wholly-owned Yeelirrie uranium deposit in Western Australia.
The asset sale, subject to relevant approvals from the Australian
Foreign Investment Review Board and the Government of Western
Australia, is expected to generate proceeds of US$430 million.
Yeelirrie Uranium deposit was discovered back in 1972 by Western
Mining Corporation and was acquired by BHP in 2005. Located 630
kilometres north-east of Perth in the Northern Goldfields region of
Western Australia, Yeelirrie is one of the finest uranium deposits
and preferred by miners.
Post asset disposition, Cameco, one of the world's largest
publicly listed uranium producers is expected to carry this
promising Yeelirrie project forward with greater zeal and
responsibility. Dean Dalla Valle, the Uranium President at BHP
Biliton, seems contented regarding this divestiture deal with
Billiton's high quality resource base and low-cost operations
ensure significant competitive advantage over the likes of
). The company's strategic acquisitions, as well as divestiture of
non-performing assets help to control and strengthen its balance
sheet, raising investor confidence.
BHP, one of the world's largest diversified resource companies
operating in mineral exploration, production and processing, oil
and gas exploration and development, and steel production and
merchandising, remains positive based on an improving global
economy driven by urbanization and industrialization in the
Currently, we are maintaining a long-term 'Neutral'
recommendation on BHP. Also, the company has a Zacks #5 Rank,
implying a short-term (1-3 months) 'Strong Sell' rating.
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