[miningmx.com] — BANNERMAN Resources on Tuesday reported “positive results” from the definitive feasibility study (DFS) for its 80%-owned Etango uranium project in Namibia, as well as a participation agreement with that country’s state miner.
The company said the DFS accomplished an 80% conversion of measured and indicated mineral resources into proved and probable ore reserves, totalling 279.6 million tonnes at an average grade of 194ppm uranium for 119.3 million pounds of uranium.
It showed “major improvements over the December 2010 preliminary feasibility study (PFS) include increasing the plant size from 15 to 20 million tonnes per year, increasing average annual production by 22%, improving mining and material movement efficiencies, better positioning of mine waste dumps and metallurgical testwork supporting a higher uranium recovery rate”, read a company statement.
Bannerman now projects production of seven to nine million pounds per year for the first five years and six to eight million pounds per year thereafter.
“Operating and capital costs, even after the 33% increase in plant throughput and price escalation over the last 15 months, increased from the PFS estimates by only 8% and 24% respectively.”
Cash operating costs of $41/lb are predicted for the first five years, and an average of $46/lb over the life of mine.
Pre-production capital cost is estimated at $870m.
“Bannerman has now commenced a resource expansion drilling program targeted to add new mineral resources and extend the mine life beyond 20 years,” read the statement.
“Bannerman will also shortly lodge the DFS, an environmental and social impact assessment and an environmental and social management plan with the relevant Namibian authorities in support the existing mining licence application.
“In addition to these activities, on the back of the completed DFS, Bannerman can now step up its engagement with potential development partners.”
EPANGELO AGREEMENT
Bannerman said state miner Epangelo would initially acquire a 5% interest and, upon a mine development decision, a further of 5% interest in Bannerman’s Namibian subsidiary, which owns 100% of the Etango project.
Epangelo has four months to obtain finance from the Development Bank of Namibia or another financing institution acceptable to Bannerman’s shareholders.
“During this four month period, other conditions such as Epangelo’s own due diligence investigations, the signing of full-form documentation and receipt of regulatory approvals (as required) are also to be satisfied.”
“If Epangelo does not contribute its pro-rata share of cash calls after a mine development decision is made, it shall dilute ultimately to nil in accordance with an agreed ‘dilution and sale’ formula.”
