Proposed downstream cash offer for Extract by CGNPC-URC and CADFund

TORONTO, Dec. 9, 2011 /CNW/ - Extract Resources Ltd

Extract has not been party to the negotiation of the terms of the Kalahari Offer or the proposed Extract Offer, including in relation to the offer prices. The Extract Independent Directors intend to carefully review the details of the proposed offers and consider all available alternatives for maximising shareholder value before making any recommendation to Extract shareholders.

In the meantime, Extract shareholders are advised to TAKE NO ACTION and await further guidance from the Extract Independent Directors.

The Kalahari Offer

The announcement by Taurus represents a firm intention to make an offer for Kalahari under the Rule 2.7 of the City Code on Takeovers and Mergers (UK) at a cash price of 243.55 pence per Kalahari share.

The Kalahari Offer is subject to certain conditions, including (inter alia):

        --  Taurus receiving valid acceptances of the Kalahari Offer in
            respect of more than 50% of the voting rights in Kalahari;
        --  Kalahari not disposing of its shares in Extract during the
            Kalahari Offer period or voting in favour of any transaction
            that would result in Kalahari's shareholding in Extract being
            materially diluted;
        --  the Government of Namibia not withdrawing, rejecting or
            adversely amending any of Extract's mining or exploration
            licences;
        --  Namibian Competition Commission approval; and
        --  no material adverse change to the value of Extract's assets
            occurring as a direct result of any act or omission of
            Kalahari.

The Kalahari Offer will open for acceptance once offers have been dispatched to Kalahari shareholders, which must take place within 28 days of the announcement by Taurus.

The Proposed Extract Offer

Since the announcement of a possible offer for Kalahari in March 2011, Extract has been actively engaged in a consultation process with the Australian Securities and Investments Commission ('ASIC') to ensure that the interests of all Extract shareholders are protected in the event that an offer is made for Kalahari. This included Extract making submissions to ASIC around the potential requirement for, and terms and conditions of, a downstream offer for Extract.

ASIC has made declarations under section 655A(1)(b) of the Corporations Act 2001 (Cth) ('Corporations Act') modifying the application of certain provisions of Chapter 6 of the Corporations Act to Taurus and its related parties. Under these declarations Taurus has been granted relief to acquire an interest of more than 20% of Extract's shares ('ASIC Relief') subject to certain conditions.

Extract is pleased to note that the conditions of the ASIC Relief granted to Taurus (and its related parties) include a requirement that Taurus proposes to make an off-market takeover bid to acquire all Extract shares under Chapter 6 of the Corporations Act, if it receives valid acceptances of the Kalahari Offer in respect of more than 50% of the voting rights in Kalahari. Furthermore, the price to be offered to Extract shareholders must be clearly and accurately determined from the price offered to Kalahari shareholders.

Extract Offer Price

Under the Extract Offer, Extract shareholders will be offered cash consideration of A$8.65 per Extract share. The Extract Offer price is the 'see-through' price derived from the implied value of Kalahari's shareholding in Extract (on a fully diluted basis) at the Kalahari Offer price of 243.55p.

Taurus's announcement contains the formula used to calculate the Extract Offer price. Extract has been provided with the opportunity to make submissions to ASIC in relation to the proposed formula and considers that the formula results in an effective Extract Offer price that is clearly and accurately determined from the price offered to Kalahari shareholders.

Timing of the Extract Offer

Under the conditions of the ASIC Relief, offers must be dispatched to Extract shareholders within four weeks of Taurus having received acceptances under the Kalahari Offer representing more than 50% of the voting rights in respect of Kalahari. Furthermore ASIC has declared that the Extract Offer must be made within 116 days of Taurus's announcement of the proposed downstream Extract Offer. Extract notes that these are the maximum timeframes set out under the ASIC Relief, and an Extract Offer could occur prior to these dates.

Under section 624(1)(b) of the Corporations Act, the Extract Offer must remain open for a minimum of one month. A condition of the ASIC Relief is that the Extract Offer must also remain open for at least two weeks after the date which is the later of:

        --  the date on which Taurus becomes unconditionally entitled to
            shares carrying more than 50% of the voting rights in Kalahari;
            or
        --  the date on which the Kalahari Offer is free of conditions.

Extract Offer Conditions

Under the conditions of the ASIC Relief, the Extract Offer must be conditional only on:

        --  Taurus becoming unconditionally entitled to shares carrying
            more than 50% of the voting rights in Kalahari; and
        --  an event or circumstance referred to in section 652C(1) or
            section 652C(2) of the Corporations Act (i.e. certain
            prescribed occurrences) not happening.

Extract notes that the relatively low level of conditionality associated with the Extract Offer means that Extract shareholders will not be disadvantaged versus Kalahari shareholders.

Other

A condition of the ASIC Relief is that Taurus must declare the Extract Offer free of all conditions before completion of any contracts arising from acceptances under the Kalahari Offer.

Importantly, the ASIC Relief only modifies and varies section 611 and section 631(1) of the Corporations Act. All other provisions of Chapter 6 remain intact.

A copy of the ASIC Relief instrument is attached to this announcement.

Husab Uranium Project

As announced on 1 December 2011, the Ministry of Mines and Energy of the Republic of Namibia has now issued a Mining Licence for development of Extract's Husab Uranium Project ('Husab'). The issue of the Mining Licence represents the final stage to achieving all of the material permits Extract requires in order to develop the project.

Through the ongoing partnership process, the Company has received a strong level of interest in Husab from potential strategic investors. These discussions are continuing and include a range of possible investment structures. The nature and level of interest received has confirmed Husab's status as a world class and highly strategic asset.

The company intends to continue discussions regarding debt financing of the project and potential offtake arrangements to underpin its development. Plans for delivery of access, power and water infrastructure are also well advanced, while the Mine Optimisation and Resource Extension (MORE) programme continues to deliver results that increase the mine life through definition of further reserves, and that optimise the design of the processing plant and mining operations.

Extract is being advised by Rothschild and Clayton Utz.

About Extract Resources

Extract Resources Ltd is an international uranium exploration and development company whose primary focus is in Namibia. The Company's principal asset is its 100%-owned Husab Uranium Project which contains the fourth largest uranium only deposit in the world. Extensive exploration potential also exists for new uranium discoveries in the region. Extract Resources is listed on the Australian (ASX), Toronto (TSX) and Namibian (NSX) Stock Exchanges.

Extract Resources

CONTACT: please visit www.extractresources.com or contact:



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|Extract Resources: London Office |Tel: 44 (0)20 7317 9220 |

|Jonathan Leslie, CEO | |

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|Extract Resources: Perth Office |Tel: 61 (0)8 9367 2111 |

|Siobhan Lancaster, Company |slancaster@extractresources.com|

|Secretary/Corporate Affairs | |

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|Australian Media Enquiries: |Tel: 61 (0)2 8999 1010 |

|MAGNUS Investor Relations/Corporate|Mob: 61 (0)413 355 997 |

|Communication (Australia) |Mob: 61 (0)413 439 883 |

|John Gardner and Dudley White | |

|___________________________________|_______________________________|

|UK Media Enquiries: |Tel: 44 (0)20 7404 5959 |

|Brunswick Group (UK) | |

|Carole Cable / Pip Green | |

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|Rothschild: | |

|Sydney: Sam Brodovcky / Marshall |Tel: 61 (0)2 9323 2030 / 2171 |

|Baillieu |Tel: 44 (0)20 7280 5424 |

|London: Roger Ewart Smith | |

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