African Energy Resources (ASX: AFR) is boosting African based exposure to uranium with the 100% acquisition of two uranium based projects in Zambia.
The two projects, Chirundu Uranium and Kariba Valley, were initially part of a joint venture with Albidon (ASX: ALB).
African Energy is funding the acquisition from existing cash reserves, with working capital funded by a partial drawdown of the $5 million convertible loan facility with Macquarie Bank (ASX: MQG).
Uranium has already been discovered, with Chirundu containing the Njame and Gwabe deposits, which collectively contain a total of 11.1 million pounds in U3O8 in Measured, Indicated and Inferred Resources.
African Energy is looking to move the acquisitions forward quickly, and is evaluating a number of additional exploration targets at Chirundu and Kariba Valley tenements with the aim of boosting the resource.
A Pre-Feasibility study was completed at Chirundu in May 2008, which gave African Energy a 70% interest in the project.
Following this in 2009, there was a further boost to the project when the Zambian Ministry of Mines and Minerals Development granted a Large Scale Mining Licence for the development of Chirundu.
At Kariba Valley, which was the company's second joint venture with Albidon, and prior to acquiring the 100% interest, African Energy held a 30% stake and could have earned up to a 70% interest by completing a Pre-Feasibility study and delivering an Indicated resource.
Already at the project, numerous targets have been identified which African Energy said require systematic evaluation to prioritise for drilling.
Kariba is strategically located, about 250 kilometres from Lusaka by road, and 50 kilometres south-west of Denison Mines’ (TSX: DML) (NYSE AMEX: DNN) tenement which contains the Dibwe and Mutanga uranium deposits.
At Mutanga, Denison said based on 45,600 metres of development drilling, Measured resources are estimated at 2 million pounds of U3O8, Indicated 5.8 million pounds of U3O8, with Inferred resources exceeding 13 million pounds of U3O8.