Extract Resources

Kalahari Minerals' Hohnen looks forward to upcoming resource upgrade at Husab



Kalahari Minerals (LON:KAH) chairman Mark Hohnen believes an upcoming resource upgrade will further underpin the scale and quality of the Husab uranium project in Nambia.

The AIM-listed group is a major stakeholder in the project, via its 42.76 percent stake in Extract Resources (ASX:EXT, TSX:EXT) which is developing the massive uranium project – currently considered the third largest uranium deposit in the world.

Seventeen drill rigs are currently working to help Extract find out just how big the resource actually is, and an upcoming resource statement will incorporate some of the most recent results from the programme.

Hohnen said he is looking forward to the resource upgrade, which is scheduled for release this quarter. 

His comments came in a short statement informing investors that a new NI43-101 technical report, relating to last month’s definitive feasibility study, has been published – the publication of the report is a regulatory requirement in Canada (where Extract is listed).

"Following the publication of the recent DFS, this report confirms the view that the Husab Project is world class,” Hohnen said.

Because of the recent on-then-off takeover bid from Chinese firm China Guangdong Nuclear Power Uranium Resource Co, and the further bid speculation that followed, it seems like the successful Husab DFS was published longer than six weeks ago.

On 5 April Hohnen declared that the study an endorsement of Kalahari’s faith in the project.

"The results of the DFS yet again prove that Husab is the most exciting new uranium project in the world today,” said Hohnen.

“The base case development map is now in place for Zones 1 & 2 to transform these into one of the three largest uranium mines in the world, producing 15 million pounds (Mlb) of uranium (U3O8) per annum via conventional open pit mining and a proven process flow sheet. 

Extract said that the DFS supports the maiden reserve estimate for Zones 1 and 2, which gave it has 225 million pounds of contained uranium - from 205 million tonnes grading 497 parts per million.

The DFS put capital costs - including initial mine fleet, process plant and supporting infrastructure - at US$1.48 billion, while production costs - excluding royalties, marketing and transport - were estimated at US$28.5 per pound.

Hohnen added: "It has to be emphasised that the study is only a base case and Extract has set up the Mine Optimisation and Resources Extension programme (`M.O.R.E.') to increase the mine life and to investigate opportunities to add significant additional value through optimisation of the mine plan and process modifications, and to enhance the project's expected mine life, operating and financial performance.”

He also stressed that the new resource will include the infill drilling on Zones 1 and 2 and it is expected to convert inferred resources into the indicated category, as well as adding additional resources.

This resource update is expected later in the current quarter.


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