NEWS set to flow from Kalahari Minerals' uranium and copper assets in Namibia should put some upward pressure on its share price. By Chris Cann - RESOURCESTOCKS*
People are often judged by the company they keep and, to some extent, the same can be said for resource prospects and projects.
Kalahari Minerals has a 49% interest in the Husab uranium project [Extract Resources 51%] that is keeping world-class company in Namibia.
The Husab project is bang in between the world's fifth most productive uranium mine in the Rio Tinto majority-owned [68.6%] Rossing operation, and the proposed 2.6 million tonne per annum Langer Heinrich uranium oxide operation, owned by Aussie market darling Paladin Resources, which has scheduled its first ore shipment in early 2007.
In addition, Australian-listed Bannerman Resources is working on the Goanikontes deposit just off to the west, while to the north, the Valencia deposit is being developed by Toronto-listed Forsys Metals.
Husab is to the east of the Namibian capital Windloek. Kalahari also has an extremely promising copper development, with a historic resource [non-JORC] 250,000 tonnes of in-situ copper metal, but the uranium plays are the likely drivers of market appreciation according to stockbroking firms Ambrian and Montagu, so that is where we begin.
The exciting news for Kalahari is that early results from Husab have indicated the prospect has a number of uranium targets with potential for significant development.
"We're in elephant country," Kalahari director Peter McIntyre said.
"Anglo had first explored the area back in the late 1970s, however our first target is being drilled for the first time. It's about defining a resource and we'll think about how we'll be handling a uranium deposit in due course."
Wholly-owned Kalahari subsidiary West African Gold Exploration began work on Husab with radiometric studies more than a year ago and defined several targets over a 550sq.km area. The company has adjacent licences under application.
Kalahari listed on AIM in March this year and has been diamond drilling a 1km section of outcropping host rock known as Ida Central since May, with early results pointing to mineralisation similar to that at Rossing, according to London brokerage Ambrian. There are currently two rigs in operation on Husab.
Highlights of the first nine holes included 41m grading 0.036% U3O8, 14m at 0.106% U3O8, 8m at 0.232% U308 and 5m at 0.185% U3O8.
Ambrian also regarded a number of "short intercepts" as "exceptional" that warrant additional drilling, and said a recent ground spectrometer survey indicated mineralisation along a 4km strike length [at Ida Central] with peak values of 665 parts per million equivalent uranium.
"We've been coming up with some very good hits," McIntyre said.
"These are on 160m sections so they're very wide still, but we're certainly seeing enough to suggest that we need to go back in there and do some further drilling from which we will come up with a defined resource."
If Kalahari is successful in defining a resource, it will consider two possible operating scenarios. The first would be a stand-alone development, the second might be the direct shipping of ore to Rossing for treatment should the opportunity present itself.
McIntyre said it was too early to speculate on when the market could expect a resource estimate from Husab, but stressed Kalahari would be moving forward with development and making steps toward cash flow as soon as possible. Ambrian speculated that a toll-treating uranium operation at Husab could be commissioned by the end of 2008.
"Exploration is a means to an ends, both with the uranium and the copper, so we'll be looking to bring these projects through to the next stage of development as quickly as we can – that's the clearly stated objective of Kalahari Minerals," he said.
"And so far so good. Every indication from what we've been doing suggests we're on track."
Kalahari has budgeted £4.5 million for exploration and development to be spent by the end of 2007, of which £1.5 million will be devoted to the uranium assets, with the remainder to fully evaluate the copper projects.
EXT Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
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