The Ministry of Mines and Energy has granted Bannerman Resources Limited a Mineral Deposit Retention Licence with a five-year extendable term over its 95 percent owned Etango Uranium Project.
The retention licence covers an area of 7 295 hectares, which includes the Etango ore body, two satellite deposits at Hyena and Ondjamba, and all planned mine infrastructure.
Accordingly, 100 percent of the project’s uranium resources are secured under long term tenure.
The licence provides strong and exclusive rights to tenure and the right (without obligation) to continue with exploration or development work, enabling the Definite Feasibility Study update work programme to continue.
Under the Namibian Minerals Prospecting and Mining Act 1992, a Mineral Deposit Retention Licence may be granted to a project where all feasibility and other work has been completed to enable mining, but the commodity price does not currently support the profitable development of the project.
The applicant must demonstrate that the relevant commodity price is expected to improve sufficiently to enable profitable mining.
“A retention licence is the ideal tenure for the highly advanced Etango project. It ensures this world-class project can move quickly to a mining licence when the uranium price recovers and gives us maximum flexibility in the meantime. We are grateful for the continued support Bannerman receives from the Namibian Government, the grant of this Retention Licence being the latest example,” Bannerman’s Chief Executive Officer, Brandon Munro, said.
According to Focus Economics, a leading provider of economic analysis and forecasts, as the world moves on from the Fukushima disaster, nuclear power may be making a comeback and consequently, so may uranium prices. The price is currently down around 25 percent from the same time last year, having plummeted over 40 percent in 2016.
In January, Kazakhstan, the world’s largest uranium producer, announced that it would cut production by 5,2 million pounds in 2017, which amounts to three percent of global production. The decision was welcomed by markets as a necessary measure to ease the ongoing supply glut.
However, a series of events, including Japanese utility Tepco’s cancelling of a key uranium supply contract with Cameco Corp. and the US Department of Energy’s decision to cut uranium dispersion into the market, dampened the enthusiasm following Kazakhstan’s announcement.
The recent see-saw in uranium prices is a result in part from traders’ wait-and-see approach given the complex supply and demand dynamics of the commodity.
Focus Economics said demand is expected to firm up on the back of favourable supply and demand dynamics.
New nuclear facilities are expected to become operational in the coming years and substantial output curbs will contribute to reducing the supply glut in the market and push prices higher.
Focus Economics projects that uranium prices will average US$25,9 per pound in the fourth quarter of this year and US$28,4 per pound in the fourth quarter of 2018.
Namibia is one of the world’s top uranium producers.
According to the Chamber of Mines of Namibia, Rössing uranium produced 1 850 tons of uranium in 2016, a significant increase of 48,6 percent from 1 245 tons of uranium oxide production in 2015
Production from the Langer Heinrich mine was sustained during 2016, posting a marginal increase from 2 228 tons in 2015 to 2 236 tons.
The Husab Mine recently came into production, and at full production the mine will make Namibia the third biggest uranium producer in the world.