A-Cap Resources (ASX:ACB) is raising up to $4 million through an entitlement issue that is proposed to be fully underwritten by Ansheng Investment Company Ltd, which is controlled by director Angang Shen.
Proceeds will be used to complete further feasibility work necessary for a mining licence application in the first half of this year for the Letlhakane Uranium Project in Botswana.
The funds will be raised through a 1 for 3.75 non-renounceable entitlement offer of 100,011,842 new shares priced at $0.04 each.
This represents a 20% discount to the closing price of the company’s shares for the last trading day prior to the announcement.
Eligible shareholders will be entitled to participate in a shortfall facility and apply for new shares in excess of their pro rata entitlements. Any final shortfall will be underwritten by Ansheng Investment Company.
Letlhakane has a high grade Resource of 83.7 million tonnes at 447ppm U3O8 for 82.5 million pounds of U3O8.
It is also one of the top ten global undeveloped uranium deposits with a resource of 308Mlbs at a cut off at 100ppm U3O8.
Letlhakane Uranium Project
The Letlhakane Uranium Project is one of the world’s largest undeveloped uranium deposits and is located in the safe and stable jurisdiction of Botswana.
It is adjacent to Botswana’s main North-South infrastructure corridor that includes a sealed all weather highway, railway line and the national power grid, all of which make significant contributions to keeping the capital cost of future developments low.
The project has the distinct advantage of having all the major infrastructure in place and is one of the only major undeveloped uranium projects in the world capable of being in production in 3 years at a low capital cost and competitive operating costs in a safe and stable jurisdiction.
A program of feasibility work necessary for a Mining Licence application in the first half of 2015 is currently underway.
This includes a major reverse circulation and diamond drilling program designed to infill and extend known areas of high grade uranium mineralisation and provide further data for mine planning and resource modelling.
In parallel, feasibility work including metallurgy, process design and environmental work necessary for a mining licence application is being conducted.
This is based on low risk, shallow open pit mining and heap leach processing to produce 3 million pounds of uranium per annum over a mine life in excess of 20 years.
A-Cap seeks to prepare the project for early development to enable the company to fully capitalise on an expected recovery in the uranium price.
In December 2014, the company completed an infill reverse circulation program that confirmed the presence and continuity of high grade uranium mineralisation.
Best results from the drilling program at a 200ppm eU3O8 cut-off included:
- 3.25 metres at 2,386ppm eU3O8 in hole SERC0364;
- 2.20 metres at 904ppm eU3O8 in hole SERC0358;
- 2.05 metres at 2,124ppm eU3O8 in hole MOKR2582;
- 2.55 metres at 772ppm e eU3O8 in hole MOKR2584;
- 1.25 metres at 2,123ppm eU3O8 in hole SERC0362;
- 2.60 metres at 588ppm eU3O8 in hole MOKR2596;
- 2.95 metres at 1,514ppm eU3O8 in hole MOKR2571; and
- 1.90 metres at 798ppm eU3O8 in hole MOKR2603.
Recent trials utilising Uniform Conditioning (UC) and Localised Uniform Conditioning (LUC) resource modelling techniques have been successful.
The LUC uses the proposed mining unit which has been reduced in size due to the selectivity of the surface miners that will be utilised.
Drilling was focussed in areas where initial optimisation runs delineated possible early pits. The results have been successful in increasing the confidence in these areas.
Metallurgy and Process Design
The metallurgical testwork and process design is based on a 2 stage acid heap leach route for all the primary, oxide and lower mudstone secondary ores with a modified solvent extraction system being the principal uranium recovery method.
The remaining calcrete and upper mudstone secondary ores will be treated using a separate alkali leach circuit once the main acid heap circuit is in operation.
The remaining metallurgical testwork to finalise feasibility studies is almost complete and the final 3 x 4m acid column leaches at Australian Nuclear Science and Technology Organisation using Serule West Primary ore, Mixed Gorgon South & Kraken Primary ore and Mixed Oxide ore were closed down in early January 2015 and are currently being washed and drained.
These columns will supply the final recoveries and acid consumption data to determine process operating costs.
Process design, capital cost and operating cost estimations are well advanced and will be completed by Lycopodium Minerals Pty Ltd during the first quarter of 2015
SLR Consulting is well advanced with the detailed engineering and environmental study of the heap leach facility, which includes an expanding permanent pad utilising grasshoppers to convey the agglomerated ore onto the pad.
This study will be also be completed in Q1 2015 and will form part of the input into the ESIA and Feasibility Study.
Studies undertaken as part of the mining evaluation and ESIA have included the dust and noise impact of the proposed mining schedule.
In addition a recent re-run of the optimisations to evaluate the use of different surface miners at the estimated acid consumptions and metallurgical recoveries for the various ore types, expected acid prices, and mining costs has provided guidance as to the preferred equipment to be used.
These decisions will be tested in a trial mining program to be undertaken later this year.
During the coming quarter revised models incorporating the most recent drilling results and metallurgical data will be used to carry out new pit optimisations, an updated schedule and preliminary mine design.
The results of these will be used along with Capex and Opex data from Lycopodium to produce an Updated Project Cash Flow Model.
Environmental and Social Impact Assessment (ESIA)
The ESIA has been progressing well with a number of specialist studies underway providing input on bio-physical, social and cultural aspects.
There have been key interactions between interlinking specialist teams such as water, radiation, air and health. The ESIA is on time and will be finalised for submission in Q1, 2015.
A-Cap Resources will use the $4 million entitlement issue to fund further feasibility work necessary for a mining licence application for the Letlhakane Uranium Project in the first half of this year.
Letlhakane is one of the top ten global undeveloped uranium deposits with a resource of 308 million pounds U3O8 at a cut off at 100ppm U3O8, giving it very strong long term leverage to a rising uranium price.
It includes a high grade resource of 83.7Mt at 447ppm U3O8 for a contained 82.5Mlbs of U3O8.
Share price kickers are:
- Upgraded Resource in the first quarter of 2015;
- Finalisation of feasibility studies in the first quarter of 2015; and
- Mining Licence application to be submitted in the second quarter of 2015.
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