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Exploring Namibia’s rich uranium reserves

16th May 2014

By: Carina Borralho

  

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Having been involved in the Namibian mining industry since the early 2000s, advanced-stage Canadian explorer Forsys Metals says that it continues to see growth potential in the region and describes Namibia as a mining-friendly and politically stable country.

“We have a long history with the mining industry in Namibia and have been in the country for several years, primarily focused on advancing our development-stage uranium project, says Forsys Metals CEO Marcel Hilmer, adding that the company also has a small stake in gold exploration.

The company is currently developing the Norasa uranium project, comprising the Valencia main uranium deposit, satellite pits and Namibplaas deposits. The Valencia deposit is situated about 80 km from the coastal town of Swakopmund.

The Norasa project spans a 35 km strike to the Rössing uranium mine, which has been in production for over 30 years and is majority- owned by multinational diversified mining major Rio Tinto. The project is also 50 km north of the Langer Heinrich uranium mine, owned by ASX-listed Paladin Energy.

Hilmer believes that what sets Norasa’s Valencia mine apart from the other major uranium exploration and development projects in Namibia is that it is fully permitted, including all environmental approvals. In August 2008, the Namibian government issued the company with a 25-year mining licence.

Construction of the Valencia mine is set to start in early 2015, while plant commissioning is expected to be under way by mid-2016. Mining at Norasa will start in early 2016 to prepare pit benches and open mining faces.

In March, Forsys Metals updated its initial scoping studies, as well as its pit improvement and metallurgical, environmental and economic studies for the development of Norasa. The company also released an updated National Instrument 43-101-compliant technical report to prefeasibility level.

Hilmer tells Mining Weekly that the uranium mined at Norasa is intended for export, adding that there are no beneficiation facilities in Namibia. “However, if the government moves forward with its intentions to beneficiate, we will be investing in this to keep some of the uranium in the country,” he notes.

The Norasa project supports a 13-year mine life at the proposed production rate, which is 2 305 t/y.

Meanwhile, in the second quarter of 2010, an important 26 km road was completed, joining the Valencia mine site to the main highway. Some internal service roads have also been constructed since then.

Construction of power infrastructure, in conjunction with Namibian power utility NamPower, is also under way and Forsys Metals has entered into a memorandum of understanding with Namibian water utility NamWater to obtain the water required for the mine’s construction and production phases.

Given the advanced stage of the project, its location, and its infrastructure agreements, as well as Namibia’s politically stable environment and its record of supporting the successful development of uranium resources, Hilmer says that the Norasa development presents a rare opportunity for investors to participate in what could potentially be one of the next biggest uranium-producing mines in the near future.

Expansion Potential
Based on current knowledge and exploration success to date, Forsys Metals believes there is potential for future expansion at the Valencia uranium reserve base.

Additional space below the currently defined Valencia pit, which is 350 m × 300 m wide, would also enable the company to expand downwards by a few benches. “Several holes in the 2009 drill programme were drilled roughly 20 m beyond the current pit bottom, which is 380 m from surface,” highlights Hilmer.

The company’s expectation of additional resource expansion below an elevation of 350 m is further reinforced by one deep drill hole, drilled in 2008, which encountered ore- grade mineralisation down to a depth of 470 m.

Water and Power Supply
Meanwhile, short- and medium-term supply of water from French public multinational Areva’s desalination plant, as well as NamWater’s own desalination plant, will be used to provide the Norasa project with its long-term water requirements of up to 20-million cubic metres a year.

Further, Namibia signed a 122 MW electricity import agreement with Mozambique in 2013, while NamPower plans to construct its own 800 MW gas power station, in cooperation with a Zambian power company. This will all contribute to the eventual operation of Forsys Metals’ Norasa project.

A central office and administration complex for the mine will also be constructed, and a semipermanent village will be established 8 km from the Norasa plant.

Namibia-Focused
Forsys Metals began investing in Namibia in around 2008. “The company decided to invest in Namibia because of its vast potential. At the time, we were able to get involved in the acquisition of exclusive prospecting rights in Namibia for uranium projects and we took up that opportunity,” says Hilmer.

Today, Namibia is still showing great potential as a preferred African mining investment. “I also believe that Namibia is one of the African countries that is showing the greatest potential, owing to its established democracy that supports fair mining practices, as well as the abundance of resources available in the country, especially uranium,” highlights Hilmer.

He adds, however, that while Namibia is one of the best countries to work in, compared with other countries in Africa, certain challenges remain. “Namibia covers a large area but has a small population. Therefore, there are potential infrastructure issues, the biggest of which relate to water and power infrastructure, which the government is attempting to address,” says Hilmer.

Investors have also identified Namibia’s lack of road and rail infrastructure as potential challenges currently facing the country.

Nevertheless, Forsys Metals says it does not plan on expanding into other African regions just yet. “We are focusing on furthering the Norasa project, which would be the sixth-largest uranium producer in the world if it were operational. We are adopting an extremely focused strategy with Norasa, rather than dividing our attention between Norasa and other projects,” says Hilmer.

Meanwhile, the availability of skills in a country with as small a population as Namibia has concerned some investors. However, Forsys Metals mentions that it prioritises hiring native Namibians wherever possible. “About 90% of our staff are Namibian, with one or two individuals who are not locals. This is a deliberate strategy to ensure the transfer of skills,” says Hilmer.

The company also invests in sponsoring university bursaries. “We have sponsored up to five individuals at a time, helping them work their way through university in departments such as geology,” says Hilmer, adding that the goal of the company is to qualify university students who will ultimately be employed at Forsys Metals.

Hilmer highlights that between N$20 000 and N$50 000 is spent on student bursaries and training each year. “We not only pay for study fees, but also for books and university accommodation,” he says.

About Forsys Metals
Forsys Metals has several assets being developed in Namibia. The company has the capability to capitalise on attractive mid- and long-term uranium sector dynamics by focusing on enhancing the wholly owned Norasa uranium project. Through its extensive exploration and technical programmes, Forsys has reported substantial uranium resources.

Edited by Samantha Herbst
Creamer Media Deputy Editor

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