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Botswana seen to have major uranium potential
Brendan Ryan
Posted: Wed, 23 Jul 2008

[miningmx.com] -- BOTSWANA has the potential to become a significant producer of uranium along the lines of neighbouring Namibia, said Andrew Tunks, CEO of Australia-listed junior ACAP.

ACAP is carrying out a scoping study on the Letlhakane uranium project south of Francistown in north-eastern Botswana where it has so far delineated a resource of 95 million pounds (lb) of U3O8 at an average grade of 158 parts per million (ppm).

Addressing the Botswana Resource Sector Conference being held in Gaborone, Tunks said that, until ACAP started operating in the country, Botswana’s uranium resource was zero.

"Yet the countries surrounding Botswana all have significant uranium resources and geological formations do not stop at political boundaries. We expect that Botswana will eventually be shown to host between four and eight percent of the world’s uranium resource,” he said.

Tunks added that he expected the Letlhakane deposit to eventually be proven as one of the largest uranium deposits found anywhere in the world.

“I initially thought it might contain around 100 million lbs of U3O8 but we have already got to that number and we have only examined around 20% of the area of interest.

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“I am no longer prepared to state at this stage just how big I think this deposit could eventually turn out to be,” he said.

ACAP is targeting completion of its scoping study in the third quarter of this year with a prefeasibility study set to follow immediately afterwards.

“We are working towards getting into production in 2011,” Tunks said, adding the recovery process used would be heap leaching.

Tunks referred to the recent sale of the Kintyre uranium deposit in Western Australia from Rio Tinto to Cameco in an attempt to illustrate the value of the Letlhakane project and its potential impact on the ACAP share price.

“Depending your resource estimates Kintyre was valued in this deal at between $6/lb and $8/lb of contained U3O8 resource. It is a much higher grade project than ours but it is situated in Western Australia which is a state that has a ban in place on uranium mining.

“So, essentially, they have paid $495m for an asset that they cannot touch,” he said.

The value of Letlhakane in terms of ACAP’s market capitalisation is less than $0,50/lb of U3O8. The average valuation on uranium resources worldwide is about $4/lb U3O8, he said.

“If that average valuation was applied to the Letlhakane project then our share price could rise tenfold from its current level around A$0,40,” he said.