BMN Bannerman Etango economically viable


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Bannerman Resources confident Etango uranium project economically viable

Bannerman Resources Ltd says its southern African Etango uranium feasibility study shows the project is economically viable at long-term contract prices.

In its activities report for the quarter ending December 31, 2009, released on January 21, Bannerman says Etango production will start in 2013 with modelled output of 5-7Mlbs U3O8 a year over at least a 16-year mine life. It reported extensive measured and indicated resources (subject to final metallurgical testing) of 102.8Mlbs U3O8 at an average grade of 227ppm U3O8, and inferred resources of 49.2Mlbs U3O8 at an average grade of 217ppm U3O8 (reported at a cut-off grade of 100ppm U3O8).

Etango, one of the world’s largest known undeveloped uranium deposits, is 80% owned by Bannerman. It is the emerging uranium developer’s principal asset and the company is looking to develop it as a large open pit operation.

At the end of the quarter, Etango drilling totalled 283,000 metres, providing “geological confidence” and extending the Etango deposit’s contiguous strike length to 6km, the report said. The company has lodged a project mining application with the Namibian Government, and claims local community support and no substantial legislative, environmental or social impediment to the application’s progress.

The mine’s estimated capital cost of $608.24 million is based on contract mining. It excludes working capital and financing charges but includes mining establishment, waste pre-stripping and engineering, procurement, construction and management costs.

Estimated operating costs at Etango are $US30-35 ($A33-38) a pound U3O8 in the first two years, with an average of $US42 a pound U3O8 for the first five years and $US45 a pound U3O8 for the life of the mine. These costs include capital components for contract mining equipment and certain infrastructure. Given the relatively shallow nature of the open pit mining operations, life-of-mine average operating costs are only approximately 7% above the first five-year costs, supporting the long term viability and supply security of the Etango operation, the report said.

Bannerman says results of the latest drilling adjacent to the existing Etango resource suggests the possibility of satellite projects in the future.

Bannerman did no drilling in the quarter in its other Namibian project, the 80% owned Swakop River uranium licence.

In Botswana, Bannerman controls three 100% owned prospecting licences (131/2005 to 133/2005) for uranium, precious metals, base metals and platinum group minerals. They cover an area of 2,308 sq km, and in the quarter Bannerman compiled data and reviews with the aim of finalising its exploration strategy by the end of March.

The Company’s cash balance at 31 December 2009 was $23.2 million.

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