JOHANNESBURG (miningweekly.com) – The A$1.4-million heap-leach demonstration plant being built at uranium developer Bannerman Resources' Etango project, in Namibia, would enhance the project’s “early mover” advantage, chairperson Ronnie Beevor said on Friday.
Writing in the group’s 2014 annual report, Beevor said the heap leach demonstration plant, which would demonstrate the heap leach concept on a larger scale to investors and financiers, would be commissioned in early 2015. The company started construction of the plant late last month.
The demonstration plant would operate for at least 12 months and besides demonstrating the heap leach concept, it would also provide input data for the detailed engineering of the processing plant. First results were expected in the June 2015 quarter.
Bannerman secured the funds to construct and operate the Etango demonstration plant following shareholder support to enter into a convertible note facility with RCF Fund VI.
“The significance of this should not be underestimated, given the $2-billion funds now committed to RCF Fund VI and its longer term investment horizon. It is likely that Fund VI will still be in the early stages of its life cycle when the financing of the development of the Etango project is undertaken,” Beevor said.
The Etango project, which has a completed definitive feasibility study (DFS), is one of the few globally significant uranium projects that could be brought into production in the medium term. However, significantly higher uranium prices were required to support new supply, Bannerman CEO Len Jubber recently said, citing figures double the spot price of $70/lb of uranium oxide (U3O8).
Completed in 2012, the DFS worked on a base case uranium price of $75/lb of U3O8 and a breakeven uranium price of $61/lb of U3O8. The study estimates that the mine, which will cost $870-million to build, will operate for 16 years, producing between six-million and nine-million pounds of U3O8 a year.
The uranium spot price hit an eight-year low of $27.50/lb of U3O8 in mid-2014. It has subsequently increased following the preliminary approval by the Japanese Nuclear Regulatory Authority of the upgraded design and safety features of the Sendai reactors 1 and 2.
Argonaut metals and mining research analyst Matthew Keane said in July that the restarting of the Japanese nuclear reactor industry, combined with accelerated nuclear development in China, would likely trigger a recovery in the uranium market.
Beevor pointed out that the restarting of the Sendai reactors in Japan remained subject to the approval of the local authority concerned and was expected to set a precedent for the approval of the applications to restart a further 18 reactors.
“While the recovery in the uranium market is proving slower than generally anticipated, Bannerman remains strongly placed with the important advantages of a completed DFS and ongoing support of Resource Capital funds as a significant strategic financial investor,” Beevor concluded.
Bannerman has a primary listing in Australia and additional listings in Canada and Namibia.