The granting of the Retention Licence is significant as it secures long-term tenure over the future Etango mine site and two satellite deposits.
The Retention Licence also provides Bannerman with the right to continue with exploration or development work, enabling the definitive feasibility study update work program to continue.
Importantly, in the current decade-low uranium price environment, a retention licence in Namibia does not impose any work or expenditure obligations.
Brandon Munro, CEO, commented: “A Retention Licence is the ideal tenure for the highly advanced Etango project.
“It ensures this world-class project can move quickly to a mining licence when the uranium price recovers and gives us maximum flexibility in the meantime.
A retention licence is designed for projects that are shovel ready but unable to commence mining due to a low prevailing commodity price – hence when commodity prices improve it can be moved to mining licence. In this sense it provides Etango with an important bridge to a mining licence.
Munro added, “We are grateful for the continued support Bannerman receives from the Namibian government, the grant of this Retention Licence being the latest example.”
Retention Licence details
The Retention Licence covers a large area of 7,295 hectares, which includes the six kilometre long Etango ore body, two substantial satellite deposits at Hyena and Ondjamba and all planned mine infrastructure.
Accordingly, all of the project’s 271 million pounds of JORC-compliant uranium resources are secured under long-term tenure.
Under Namibian law, a Mineral Deposit Retention Licence may be granted to a project where all feasibility and other work has been completed to enable mining, however the commodity price does not currently support the profitable development of the project.
The applicant must demonstrate that the relevant commodity price is expected to improve sufficiently to enable profitable mining.
The Retention Licence is a neat interim solution for Bannerman, who applied for a mining licence during better times before Fukushima but were informed mid-2016 that the Namibian Minister of Mines and Energy intended to refuse to grant the licence, citing low uranium prices.
Bannerman is now perfectly positioned to move to a full mining licence once the uranium price recovers.
Etango Uranium Project
The Etango Uranium Project is ideally placed in Namibia, one of the world’s largest and most established uranium exporters.
Etango is located close to all necessary infrastructure and near to Rio Tinto Ltd’s (ASX:RIO) Rössing uranium mine, Paladin Energy Ltd’s (ASX:PDN) Langer Heinrich uranium mine and China General Nuclear Power Corp’s Husab uranium mine.
A Definitive Feasibility Study (DFS) completed in 2012 confirmed the technical, environmental and financial (at consensus long-term uranium prices) viability of a large open pit and heap leach operation.
Since 2015, Bannerman has conducted a large-scale heap leach demonstration program to provide further assurance to financing parties and generate process information.
Based on the DFS, production is expected to be 7-9 million pounds U3O8 per year for the first five years and 6-8 million pounds U3O8 per year thereafter. This rates Etango as the second largest undeveloped uranium mine globally, by scale of annual production.
Furthermore, the current mine life of 16 years has significant expansion potential through the conversion of existing Inferred Resource as well as the deposit being open at depth.