PERTH (miningweekly.com) – A definitive feasibility study (DFS) into the Etango 8 uranium project, in Namibia, has confirmed the project’s economic viability, ASX-listed Bannerman Energy said.
Based on a nameplate capacity of eight-million tonnes a year, the Etango project is expected to have a mine life of 15 years, producing 52.6-million pounds of uranium oxide, averaging 3.5-million pounds a year.
The DFS estimated a preproduction capital expenditure (capex) of $317-million, up from the $274-million estimated in the 2021 prefeasibility study (PFS), while all-in sustaining costs (AISC) for the project have dropped from the $40.3/lb estimated in the PFS to $38.10/lb.
The project’s net present value (NPV) is now estimated at $209-million, down from the $222-million estimated in 2021, while the internal rate of return has also decreased from 20.3% to 17%.
The DFS was based on a uranium price of $65/lb.
“The DFS has confirmed, to a definitive level of study, that the Etango 8 project firmly warrants development. At a base-case uranium price of $65/lb, Etango 8 delivers attractive projected returns from a development that has been heavily derisked via deep prior technical and demonstration plant activity,” said Bannerman CEO Brandon Munro.
“Underscoring Etango’s impressive leverage, the projected NPV more than doubles at a uranium price assumption of $80/lb. While the Etango 8 economics are robust at $65/lb, we believe a number closer to $80/lb will be necessary to incentivise sufficient production across the industry to meet uranium demand this decade.
“Given the challenging global supply chain environment, we are pleased to have kept the increase in preproduction capex to approximately 15%, which includes contingency and anticipated investment in port acid-handling infrastructure. Within that context, we are especially pleased to have captured a 5% reduction in forecast AISC through more efficient power usage and purchasing arrangements,” said Munro.
“We have commenced front end engineering and design and are moving firmly down the path towards production at the precise moment the world wakes up to the essential role of nuclear power. Our mining licence application was submitted in August 2022 and we are well underway with parallel offtake and project finance workstreams. All of this activity is driving towards a targeted positive final investment decision on Etango 8, uranium market conditions permitting, during the second half of 2023.”
Construction of the Etango 8 project is expected to take 34 months to complete, including detailed design.
Bannerman told shareholders on Tuesday that to achieve the outcomes considered in the DFS, the company would need more than $320-million in pre-production funding. While the company was confident that it would be able to raise sufficient capital to meet this demand, the company also noted that it could pursue other value realisation strategies, including sale, partial sale or joint ventures at Etango 8.