www.marenicaenergy.com.au
Marenica Energy's (ASX: MEY) strategy is to focus on the evaluation of the Marenica Project as well as to identify and acquire other uranium opportunities globally.
The Company's principal asset is the Marenica Uranium Project located in the uranium rich Damara Province in Namibia. The project covers 527sq km, with high prospectivity for both secondary and primary uranium deposits.
BGF Equities places Buy on Marenica Energy
Australian stock broker BGF Equities has released a report on Marenica Energy (ASX: MEY) and said that progress on metallurgy will lead to a significant upgrade of economics.
BGF Equities recommends Marenica Energy as a Buy.
BGF have upgraded their view on MEY following two key events; the acquisition of 10.6% of the company by Areva, and the 120% increase contained uranium resources, following the boost in grade from 140 ppm to 170 ppm.
MEY is one the cheapest entries into the Namibian uranium sector with an EV of A$0.93/lb. While they have less guidance on capex and opex for a possible development, as the scoping study is not due until mid 2010, BGF said it may find that the association with Areva gives MEY some unique benefits.
BGF said infrastructure sharing would lower capex. The ability to deliver pregnant liquor to Trekkopje for stripping could significantly lower capex and reduce financial risk.
A corporate outcome would also be an option for Areva if it decided it made sense to own Marenica outright, to maximise its presence in the region. Given what it paid for Trekkopje, MEY would be cheap at twice its price.
While the in-situ grade is modest, BGF said test work is showing that a simple mechanical upgrading of the ore can lead to grades in excess up to 500 ppm prior to leaching.
This significantly improves the economics relative to the hard rock alaskite projects in Namibia.
BGF said questions will be answered with the release of the scoping study, which could lead to a significant re-rating of the stock.
