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Extract's Husab uranium mine to cost $1,6bn to develop
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5th April 2011
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PERTH ( − The Husab uranium project in Namibia, which could be one of the world’s largest uranium mines, would cost about $1,6-billion to develop Extract Resources CEO and MD Jonathan Leslie said on Tuesday.

He told reporters in a conference call that a recently completed definitive feasibility study (DFS) had found that the project could support a 15-million ton a year conventional acid leach plant, producing 15-million pounds a year of uranium oxide (U3O8) equivalent.

Extract, which is listed on the ASX and TSX, plans to mine from two separate pits to maintain a sustained rate of 15-million tons a year, over an estimated life of mine of 16-years.

Production costs were estimated at $28,50/lb, excluding royalties, marketing and transport costs.

The Husab project could be brought into first production during the first quarter of 2014, and Leslie noted that to keep the deadline, the company would have to make a final investment decision by June this year.

From a final investment decision, project construction would take around 33-months.

“The DFS results demonstrate that Husab is capable of being developed into one of the largest uranium mines in the world with a low-risk conventional openpit mine, supported by a proven flow sheet,” Leslie said.

The DFS was supported by a maiden reserve estimate of 205-million tons, grading at 497-parts per million, for 225-million pounds of contained uranium.

Extract defined a base case stand-alone mine plan and process plant design, including plans for delivery of the infrastructure necessary to support the project.

Supporting infrastructure costs has been estimated at around $210-million, Leslie told reporters.

Leslie noted that while the DFS demonstrated the economic viability of the project, additional exploration and resource definition drilling was expected to continue to increase the already large resource inventory, and enable significant extensions to the mine life.

Extract was planning to spend a further $15-million over the next 12 months as part of its mine optimisation and resource extension (MORE) project, which was aimed at extending the mine life beyond the original 16 years, to match the plant life of 30 years, and to look at process enhancements.

One of the first milestones for the MORE programme would be an updated resource estimate, scheduled for the second quarter of this year, which Leslie said would add a further one to two years to the project’s mine life.

A detailed geotechnical review has also indicated the potential for steeper slope angles, and a consequent increase in reserves, as well as a reduced strip ratio.

The MORE programme would also investigate possible process enhancements, including a finer grind process, elevated temperature leach, as well as the potential to increase process recovery and simplify the process plant.


Meanwhile, Leslie noted that while the DFS looked at a stand-alone development of the Husab uranium project, Extract would be investigating the value of developing the project within a partnership.

“What is useful about this DFS is that we now have a very clear value for the stand-alone project, and we have the option to pursue a stand-alone. But if we find that there is another way forward, which gets us better economic value, and the Namibian government is happy with, then we will pursue that as well,” Leslie told reporters.

Extract and diversified giant Rio Tinto were reportedly mulling a tie-up of their Namibian uranium resources.

While Leslie couldn’t expand on these discussions, he did say that a tie up with Rio’s Rössing operation, which is the world’s third largest uranium mine and produced 4 150 t of U3O8 in 2009, could likely offer a less expensive route.

“I think that what I can say is that there [at Rössing] is a plant that could be used, and under the DFS, we are building our own plant from scratch. And there will also be a number of other synergies, so that is where you will get some of the savings,” Leslie said.



Edited by: Mariaan Webb


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