Ann: Africa Down Under Conference Presentation , page-2

re: Ann: Africa Down Under Conference Present... New uranium mines to come at a cost
Ron Berryman
Thursday, 30 August 2012

BANNERMAN Resources chief executive officer Len Jubber believes any new investment in greenfield uranium mines will require an incentivised price range of between $US75 and $US90 a pound.

The current price for uranium is $US48.50.

Speaking at the Africa Down Under conference in Perth, Jubber said that while the industry had been through some turmoil following the Fukishima incident last year, there were significant signs of demand upturn and reactor development activity.

“Any examination of the price and supply trend of the past 10 years shows a generally upward trend,” Jubber said.

“What we have come to recognise is that uranium will have its price spikes, but it is the longer term trend that is the real sector indicator.

“In this mix is the increasing tiredness of a lot of uranium mines globally, historic inadequate pricing, the need for renewal for some existing operations such as the Ranger mine in the Northern Territory going underground, project swaps, and sudden market impacts such as the deferral of the Olympic Dam decision ─ an event that has ended much market speculation about potential future cheap volumes of uranium flooding the market.

“The market has to look seriously at those companies that have taken their projects to a definitive feasibility stage because this is where the cost realities come in for future uranium projects.

“It gets rid of the blue sky numbers at the scoping study levels and sets the range at where new uranium mines can be viable.

“Our assessment of all current projects shows this price range will need to be in the $75-90 a pound range to see incentive decisions for new U mine developments.”

Jubber said 433 reactors continued to operate worldwide, while 63 new plants were under construction and 489 were planned or proposed in 30 countries.

“Add to that China’s stated intention to increase its nuclear output from 12 gigawatts to 60-70GW by 2020 and you can see that demand will not be easing as that target only represents six to seven per cent of China’s total requirement to replace some of its fossil fuels ─ and, of course, India is a sleeper at this stage,” he added.

Bannerman is developing the Etango uranium project in Namibia, with a definitive feasibility study completed in April for the 119 million pound U3O8 reserve inventory.

The DFS outlined a 16-year mine life for Etango with a capex development cost of $US870 million.