Uranium and copper explorer Kalahari Minerals (AIM: KAH) said Extract Resources (TSX, ASX: EXT) reported further exceptional assay results from the Rossing South uranium deposit at Extract's world-class Husab uranium project in Namibia, which “underlined its enormous potential,” with infill drilling returning grades of 2,243 ppm (parts per million) uranium over 73 metres.
Kalahari’s subsidiary Kalahari Uranium Limited holds a 40.6% interest in Extract Resources, which owns the rights to the project. Previous estimates have suggested the Rossing South uranium mine could support production of nearly 6,700 tonnes of uranium per annum, which would more than double Namibia’s entire annual output and would be significantly larger than the nearby Rossing Mine, currently the third largest uranium in the world, and 68.6% owned by Rio Tinto (LSE:RIO, ASX:RIO).
The ongoing drilling on zones 1 and 2 is aimed at proving up Extract’s current resource from the inferred to indicated category. In addition to the results from infill drilling, Kalahari said that exploratory drilling on the western limb of the Rössing South anteform was yielding “extremely encouraging results” and demonstrated the potential of the entire Husab project, which the company said could develop into one of the world’s largest economic uranium deposits.
The drilling programmed conducted at Rossing South is already one of the largest in Africa with 19 rigs operating in the area. The pilot testwork which has been reported to have delivered encouraging results is expected to be concluded in June, while an updated resource estimate for Rossing is scheduled for Q3 2010.
This will be followed by the release of the definitive feasibility study for Rossing South, currently set for Q4 2010 and expected to confirm the findings of last year’s scoping study, which said the project had the potential to have a mine life of more than 20 years with an annual production rate of 15 million pounds (Mlbs) of uranium. The scoping study was conducted using an average grade of 487ppm, which is lower than the grades produced by drilling at Zones 1 and 2.
Other assay results included mineralization over 17 metres at 2,745 ppm uranium, 37 metres grading 2,001 ppm uranium, 10 metres grading 1,665 ppm uranium, 12 metres grading 1,522 ppm uranium, 18 metres grading 1,419 ppm uranium and 53 metres grading 1,265, ppm uranium.
“These latest exceptional assay results underline the enormous potential of the Rössing South project ... additionally and highly significantly, the exploratory drilling on the western limb of the Rössing South anteform is also yielding extremely encouraging results and demonstrates the potential for the entire Husab Project which we believe will be one of the world's largest economic deposits...Extract is clearly highly focussed on the rapid development of the project,” said Executive Chairman of Kalahari Mark Hohnen.
Earlier this month, Hong Kong-listed natural resource focused investor APAC Resources (HK: 1104) has agreed to acquire a 7.1% stake in the company for £1.85 per share, giving Kalahari funds of £29.6 million along with “further support for strong institutional backing” and increased exposure to the growing Chinese market. The sale price represented a slight premium to the company’s previous day’s closing price of 1.82 pence.