my take on the announcement

A few interesting bits and pieces spread through the announcement. I'll go through my take on them in case anynoe is interested.


"Bannerman expects substantial additional material to be included in the ultimate open pit mine design based on the recent addition of Inferred resources at the Ondjamba and Hyena satellite deposits ... This feasibility study update incorporates only the Measured and Indicated resources of the Etango deposit ..."

This means: we are only factoring 149/213 mlbs in etango. We are NOT including 44mlbs in hyena or Ondjamba which is a bit dissappointing, but also provides some upside. That is to say that we are still not including over 100mlbs of known inferred resource into the equation.

Obviously if we can include even 1/2 of the 100mlbs, our CAPEX/lb will drop substantially.

It also means that if we make any other meaningful discoveries in Jan 2011 drilling that the CAPEX/lb will drop dramatically.

"The Namibian state-owned power utility has confirmed its ability to provide power to the Etango Project site. Power requirements for the total mining and heap leach operation are estimated at approximately 31MW."

This is fantastic news. It confirms we will have power. This was a concern that people had raised over time and should now be quashed.

"The Namibian Government royalty on uranium mining is 3% of gross revenue, and additional allowances have also been made for off-site shipping, marketing and other sales-related costs. These amounts have been deducted from gross sales revenue and are not included in operating cost estimate."

This means to me that we dont have to fuss about speculating what cut the namibians want of our revenues, and that this cut has already been factored into all the numbers.

"A number of parties have already visited site and conducted due diligence on the feasibility study work completed to date. Bannerman will pursue a sensible and value-accretive development partner transaction at the project level that will facilitate both the provision of project debt and equity financing. The quality of the feasibility study work has been acknowledged by parties who have reviewed the information."

I particularly like the clear mention here of parties visiting the site and conducted due dilligence on the PFS/BFS work. This means that someone is looking at us SERIOUSLY.

The reason I say this is doing due dilligence work on any company is a very expensive process - you dont do this kind of work if the numbers dont stack up on the surface - you would just walk away and keep the cash in your pocket. Big enterprise and govt's dont rush into things, M&A take time, and execs wont commit till they know the numbers are accurate (and also stack up). A little patience may be needed but we're going in the right direction.

This gives us reasonable basis to expect that we will indeed have a leg to stand on when it comes time to pony up the cash to build the mine site.

"A similar RadonXTM survey, in conjunction with ground radiometric surveys and geological mapping, north of the Swakop River has identified two further mineralised trends, namely Ombepo and Cheetah, in addition to the previously identified R?ssingberg trend. Surface grab samples along these new trends have shown encouraging results. Drilling to test these areas will commence in January 2011."

This should be interesting - drilling in those nice new areas should give us some hope for interesting announcements. Given that some of these strikes are larger than etango itself - if the numbers come back good we could be over 400mlbs, and maybe as high as 600mlbs - yes this number is very very speculative and full of wild assumptions on contained resource, but it is not entirely unreasonable either. Look at the radonx cup results and the covered area vs what was done in etango - form your own opinion and join the dots.

If we end up with 4-600mlbs @ 800m capex will you all be happy then? ;)


Side note:
I did notice that there is a minor inconsistency in the document - the PFS/BFS work seems to be opperating with an 85% recovery rate, whereas all the recent test work is pointing at 90%+. Might be a small upside to be had there - it also indicates that those doing the work are opperating conservatively.