Bannerman Resources Ltd (ASX:BMN) has received results from Phase 5 of its heap leach demonstration plant program for the Etango uranium project in Namibia.
Phase 5, aimed at optimising the metallurgical process, has delivered potential for substantial capital and operating cost savings.
This further de-risks the uranium project, which will assist Bannerman in its search for project partners.
Bannerman will now move on to the final Phase 6 of the program, which will look to lower crushing and binder costs.
Brandon Munro, CEO, commented: “Our team has continued to deliver superb return on investment at the Etango heap leach demonstration plant.
“The two-year program has now been extended into a sixth phase, such is the extent of the positive impact on capital and operating costs we expect to attain.”
Background
Bannerman’s principal asset is its 100%-owned Etango Project located near Rio Tinto Ltd’s (ASX:RIO) Rössing uranium mine, Paladin Energy Ltd’s (ASX:PDN) Langer Heinrich uranium mine and China General Nuclear Power Corp’s Husab uranium mine currently under construction.
A definitive feasibility study (DFS) has confirmed the technical, environmental and financial (at consensus long term uranium prices) viability of a large open pit and heap leach operation.
Since 2015, Bannerman has conducted a large scale heap leach demonstration program to provide further assurance to financing parties and generate process information.
Based on the DFS, production is expected to be 7-9 million pounds U3O8 per year for the first five years and 6-8 million pounds U3O8 per year thereafter.
Current mine life of 16 years has significant expansion potential through the conversion of existing Inferred Resource as well as the deposit being open at depth.
Phase 5 results
The main objectives of this phase were to test different particle sizes and crushing methods as well as different binder addition rates.
The consistent results observed from Phase 5 indicate the low technical risk and further potential cost savings for the Etango Project.
An average uranium extraction of 93.6% within 22 days was achieved for the eight columns. This compares with the DFS projections for a scaled-up heap of 86.9%.
The average acid consumption is also lower than the DFS projected value of 17.6kg/t. The Phase 5 average acid consumption was 14.4 kg/t.
Heap Leach Demonstration Plant (Phases 1-5)
The plant program is an integral step towards the Etango project’s detailed engineering and financing phases.
Phase 1 - Commissioning (complete)
Phase 2 - Reproducibility (complete)
Phase 3 - Solution Recycle (complete)
Phase 4 - Solvent Extraction (complete)
Phase 5 - Value Engineering (complete)
The Phase 5 test work indicates further potential for optimisation and cost savings.
As such the team has formulated an additional Phase 6, which has commenced - results are expected to be available by the end of November 2016.
Analysis
Phase 5 test work has confirmed optimisation potential exists, which significantly de-risks the uranium project, both technically and financially.
Overall results and observations from Phase 5 were in-line with those obtained for all the
preceding phases, validating the value of the findings to date.
Furthermore, testing is able to give credit to the DFS projections and inputs used, both the average uranium extraction and acid consumption demo results are better than the estimates used.
These results continue to demonstrate that the plant program has been, and is, a success.
It removes one of the key potential risks a financing party or lender would be concerned about; heap leaching is not used often in uranium, although proposed adoption of heap leaching at Olympic Dam validates its suitability.
This advances Bannerman’s unique position as owning one of the world’s largest undeveloped uranium projects that is development ready as soon as the uranium market shows signs of recovery.
The board has made a strong decision to continue advancing the project in this challenging uranium price climate, which demonstrates confidence in the project.
The outcome of this success is that Bannerman is primed to benefit when uranium prices turn.
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