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AfRIcA

Etango-8 offers economic lifeline

annerman Energy Ltd’s long-held ambi- market outcomes”.
Btion to develop a new uranium mine in “The original Etango was an enormous Etango-8 PFS highlights
Namibia has taken on greater importance undertaking and whilst that is still very much
in the wake of the COVID-19 pandemic, a viable outcome that we could choose Process throughput 7.8 mtpa
according to managing director Brandon when we make a decision on development, Life-of-mine 15 years
Munro. we wanted an alternative that had much Average strip ratio 2.07:1
Namibia’s economy has been severely lower capex…and without hurting operat-
crippled since the first case of the highly in- ing costs,” he said. Average head grade 232 ppm
fectious virus was recorded in the southern Munro said one of the most pleasing Forecast recovery 87.8%
African country on March 11 last year. The outcomes from the PFS was the fact the
Government has since enforced several numbers were largely in line with those Average production 3.5 mlbpa
lockdowns over the past 18 months and published in a scoping study 12 months Pre-production capex $US274 million
many businesses have collapsed under the earlier. Improvements were achieved in
fiscal pressure of being unable to open to throughput, life-of-mine, total production, Cash operating cost $US37.3/lb
the wider public. AISC, post-tax NPV and project net cash AISC (incl royalties) $US40.3/lb
The former German colony has also flow, while the capex only increased by Assumed uranium price $US65/lb
been hit hard by the lack of tourism due $US20 million and IRR fell by less than 1%.
to the various travel bans and border clo- “It was remarkably similar to the numbers NPV post tax $US222 million
sures, leaving new mining developments as from the scoping study, which I think says IRR 20.3%
one of the few options capable of stimulat- volumes about the credibility of the techni-
ing the Namibian economy. cal work that’s been done, and also relates Project net cashflow $US642 million
Munro, who lived in Swakopmund for to the fact that we’ve already done DFS-
five years during his previous role as Ban- level work on the project at a larger scale,”
nerman’s country manager, said watching Munro said.
the country’s financial and health struggles “With the previous DFS, everything is
from afar had been personally very chal- at the largest feasible scale that we can
lenging. achieve. The difference is fleet configura-
“I know lots of people who have passed tion has been downsized for a smaller ma-
away because of COVID now, which is in- terials movement, the processing plant is
credibly said,” Munro told Paydirt. smaller and has been engineered in such
“COVID-19 has really hit Namibia quite a way that we can add an additional plant
hard. It’s not a very big, resilient economy at a future point to achieve the expansion
so when tourism gets hit really hard be- capacity that we’ve now got built into the
cause of COVID and travel bans, then you project and we’ve reconfigured the heap
layer on a bunch of lockdowns that kill off leach pad as well as the back end of the
a number of businesses, it’s just been ab- processing because of the introduction of
solutely decimating from an economic point ion exchange and nanofiltration as a pre-
of view. ferred processing route.
“I think what the impact of COVID in Na- “We haven’t needed to do any additional
mibia has done is really increase the impor- resource drilling…we simply restated the Brandon Munro
tance of developments like our Etango-8 resource and have now calculated a new
project. It gives us greater relevance in reserve. The study certainly benefits from
country and we anticipate continued gov- the huge volume of metallurgical test work including Etango-8,” he said.
ernment support for our project on that done through the DFS process and then “We’ve seen the re-entry of financial
basis because the whole country is really subsequent to that via the heap leach dem- investors into the physical uranium invest-
hurting after COVID and that development onstration plant.” ment proposition, as a broader range of in-
agenda is as strong as ever.” The Bannerman board has already ap- vestors recognise the asymmetrical nature
Bannerman last month published a ro- proved progression to a DFS which is only of returns that you can expect from own-
bust PFS on Etango-8 which supported expected to take another 12 months to ing physical uranium. The Sprott Physical
development of a 3.5 mlbpa operation for complete given the large body of technical Uranium Trust that is now operable on the
a pre-production capex of $US274 million, work already done. TSX and will next year be listed in the US is
generating a post-tax NPV of $US222 mil- Munro expects his company’s Etango-8 a good example of a more flexible vehicle
lion and IRR of 20.3% over the initial 15 project to attract plenty of investor interest that’s been able to cater for a broader range
years of mine life. over the next year, especially with senti- of investment appetites.
Eagle-eyed investors will recall the com- ment returning to the yellowcake sector af- “The acquisition of uranium by these
pany published a DFS on a larger 7.2 mlbpa ter a decade-long slumber. physical investment trusts will help to tap
operation at the larger Etango, which car- “The supply and demand dynamics point into the market and bring forward the sus-
ried a $US793 million price tag, almost six very, very clearly to a picture where prices tainable pricing levels that would then en-
years ago, but Munro said the smaller Etan- will need to increase to first of all make cur- able us to move forward with the Etango-8.”
go-8 proposition was “more flexible” and rent global production economic and also to – Michael Washbourne
more likely to “respond to a greater range of incentivise the construction of new mines,

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