EVO SECURITIES RESEARCH

Thursday 19 July 2007

13:00

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KALAHARI MINERALS PLC (KAH.L) - BUY - PRICE/TARGET : 27p/32p - TP RAISED TO 31.7P REFLECT IMPROVING CONFIDENCE IN COPPER RESOURCE Overnight announcement from Extract Resources positive for sentiment.

EVO TAKE - We are raising our TP on KAH to 31.7p from 27.5p following the recent encouraging drill results at the Group's copper projects.

Improving confidence we ascribe $36/t to the estimated 250kt copper resource. An overnight announcement by Extract Resources on the discovery of additional uranium mineralisation should also boost sentiment.

DETAILS - Following encouraging recent drill results at the Group's Namibian copper projects we have attributed $36/t (1% of our long term copper price) to the estimated 250kt copper resource. As a result our TP rises to 31.7p from the previous 27.5p. In addition an overnight announcement from Extract Resources, in which KAH holds 66.7m shares (36.4%), indicates positive progress on its uranium assets with the discovery of an additional zone of uranium mineralisation between existing projects at Garnet Valley and Holland's Dome. We believe this should boost sentiment. Extract Resources currently trades on an attractive EV/lb resource of just c.$6.8/lb (approx half that of neighbouring peers) for its current 20mlbs estimated uranium resource base. Discoveries such as this could increase this figure while an upgrade in the quality of resource to JORC standard by mid 2008 could drive a further revaluation towards that of peers in the next 12 months.

VALUATION AND RECOMMENDATION - Our 31.7p sum-of-the-parts analysis includes GBP25.5m for the look through value of KAH's share holding in Extract Resource, GBP4.5m for the 250kt estimated copper resource and GBP4.4m net cash.

Keith Watson +44 20 7071 4365 keith.watson@evosecurities.com