Bannerman Resources (BAN-T, BMN-A) has received an environmental nod from the Namibian Ministry of Environment and Tourism to develop its Etango uranium project, located on the Namib Desert sands, near the costal town of Swakopmund.
The company says the approval is a “key milestone” for its 80%-held project and complements the environmental green light it got last year for Etango’s off-site infrastructure, bringing it closer to obtaining a mining licence.
The company’s CEO Len Jubber states the latest approval comes after more than three years of environmental and social impact studies, plus an extensive public consultation process.
Bannerman now expects to lodge the environmental approval along with a recently completed definitive feasibility study with the Namibian Ministry of Mines and Energy in support of its existing mining licence application, which it submitted in 2009.
“Receipt of the environmental approval takes us one step closer to the substantial stakeholder benefits which will stem from development of this globally significant uranium project,” Jubber says.
The definitive feasibility study published in April estimated it would cost US$870 million to build Etango and another US$381 million to sustain operations.
Etango, touted to potentially become a top ten producer, is envisioned as a 20-million-tonne-per-year operation, producing 7 million to 9 million lbs. uranium oxide (U3O8) a year in the first five years and between 6 million and 8 million lbs. U3O8 per year thereafter.
The study also points out the project is highly leveraged to the uranium price. Using a price of US$75 per lb., Etango has a 12% pre-tax internal rate of return with payback expected within six years.
BMO Capital Markets’ analyst Edward Sterck notes that when using a long-term uranium price of US$60 per lb. the project “continues to look uneconomic.”
“However, given its large resource base, there is a possibility that a parastatal organization could be interested in acquiring the project or company to tie up strategic reserves,” he adds.
Etango hosts 280 million tonnes of reserves grading 194 ppm U3O8 for 119 million lbs. of contained uranium.
On July 17, Bannerman shares were off 7% to close at 13¢, within a 52-week trading range of 12¢ and 46.5¢.