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April 10, 2011

Extract's Husab uranium mine to cost $1,6bn to develop

The Husab uranium project in Namibia, which could be one of the world’s largest uranium mines, would cost about $1,6-billion to develop Extract Resources CEO and MD Jonathan Leslie said on Tuesday.

There is an interesting discussion of how one uranium mine can have its reserves doubled with extra work and exploration.

A recently completed definitive feasibility study (DFS) had found that the project could support a 15-million ton a year conventional acid leach plant, producing 15-million pounds a year (7500 tons/year) of uranium oxide (U3O8) equivalent.



Extract plans to mine from two separate pits to maintain a sustained rate of 7500 tons/year of uranium oxide over an estimated life of mine of 16-years. Production costs were estimated at $28,50/lb, excluding royalties, marketing and transport costs.

The Husab project could be brought into first production during the first quarter of 2014, and Leslie noted that to keep the deadline, the company would have to make a final investment decision by June this year.

The DFS was supported by a maiden reserve estimate of 205-million tons, grading at 497-parts per million, for 225-million pounds of contained uranium.

The DFS demonstrated the economic viability of the project, additional exploration and resource definition drilling was expected to continue to increase the already large resource inventory, and enable significant extensions to the mine life.

Extract was planning to spend a further $15-million over the next 12 months as part of its mine optimisation and resource extension (MORE) project, which was aimed at extending the mine life beyond the original 16 years, to match the plant life of 30 years, and to look at process enhancements.

One of the first milestones for the MORE programme would be an updated resource estimate, scheduled for the second quarter of this year, which Leslie said would add a further one to two years to the project’s mine life.

A detailed geotechnical review has also indicated the potential for steeper slope angles, and a consequent increase in reserves, as well as a reduced strip ratio.

The MORE programme would also investigate possible process enhancements, including a finer grind process, elevated temperature leach, as well as the potential to increase process recovery and simplify the process plant.

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