WINDHOEK - Extracting the largest discovered uranium deposits in the country by Swakop Uranium requires N$12 billion, funds which Extract Resources, owners of the mine are confident they will raise before commissioning the mine in 33 months.
Potential partners are being consulted to determine the optimum funding and development framework to bring the mine into production. Swakop Uranium chairman Steve Galloway says they "want to raise as much as possible [of funding] from the Namibian market".
Besides pension funds and commercial institutions, the other potential partner is the Namibian Government, through its mining company Epangelo Mining. Extract Resources continues to keep the state-owned mining company, along with the Ministry of Mines and Energy in the loop, and according to Galloway they are now waiting for proposals from the state-owned mining company.
"We are keen to work with them, we think it is of benefit for the project in long term," says Galloway. An application for the mining licence from Government is currently pending and the company is optimistic that all would go well.
Shareholders are nevertheless engaged in negotiations over a bid by a Chinese company to buy up all 43 percent of Kalahari Minerals in Extract Resources.
Kalahari Minerals is the largest shareholder in the mine, and is favouring the cash offer from China Guangdong Nuclear Uranium Resources Company.
Remaining shareholders in Extract Resources have objected saying they would only consider the cash offer if the Chinese company extends the offer to all other shareholders in Extract Resources.
The case is currently with the Australian Securities and Investment Commission for contemplation. Galloway says these negotiations at shareholder level have not changed plans to bring the mine on stream.
The company's cash balance of about N$650 million is sufficient to fund the drilling, optimisation and the initial development. Uranium deposits at Swakop Uranium are estimated just above 200 million tonnes, but the company says it is engaged in additional feasibility studies of areas around the proposed mine and thus far indications are of additional deposits that could well extend the mining operations beyond the current 16 year estimated life span.
Nevertheless, shareholders must still sort out in-house issues relating to funding, deciding on the portion of funds to secure from the market. Once on stream, Swakop Uranium would be the largest uranium mine in Namibia, its deposits outstripping those of Rossing Uranium, the country's oldest open pit uranium mine, and among the top five uranium mines in the world.
Annual production is estimated at around 6,820 tonnes of uranium oxide. Galloway says discussions are ongoing with potential customers to assess demand and several strategic contracting opportunities have been identified.
"Extract is confident that it will become an attractive supplier to end-users as a result of the [mine's] ability to offer geographic diversification and long term security of supply," the company said.
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