By Hilary Mare
ASX-listed Bannerman Resources has raised N$41,5 million through a share placement to institutional and sophisticated investors to advance work at the Etango uranium project.
Some 133.3-million shares, at a price of 31c each, were issued to raise the capital.
Bannerman said that the placement price represented a 13.5 percent discount to the 15-day volume-weighted average price of Bannerman shares.
“We are delighted with the strength of the response to our placement offering. It is a testament to the quality of the Etango project and its outstanding position to capitalise on an expected rebound in uranium market prices over the coming years,” said Bannerman CEO Brandon Munro. The Etango Uranium Project is one of the world’s largest undeveloped uranium projects. It is located in the coast of Namibia. Etango is one of the few uranium projects in the world with a completed Definitive Feasibility Study (DFS) and environmental permitting and will be a top 10 producer once developed. Morgans Corporate Limited and Patersons Securities Limited acted as joint lead managers to the placement. Funds raised from the placement, together with existing cash reserves, will be primarily used for internal and external engineering designed to assess and quantify opportunities to reduce Etango project operating and capital cost estimates that have arisen from the company’s Heap Leach Demonstration Programme, and for general working capital.
Based on average yearly production of 7.2-million pounds of uranium oxide over an initial mine life of 15.7 years, the Etango project is expected to have a net present value of N$4,3 billion and a post-tax internal rate of return of 15 percent.
The placement will be completed in two tranches with approximately 116.6 million shares issued in the first tranche, pursuant to the company’s capacity under ASX Listing Rule 7.1 and 7.1A. Settlement is expected to occur this month and will rank equally in all respects with the existing fully paid ordinary shares. The remaining 16,666,667 new shares to Resource Capital Fund VI L.P. is subject to shareholder approval to be sought at an extraordinary general meeting to be held as early as practical.
Based on a Definitive Feasibility Study (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. It will have a minimum mine life of 16 years with significant expansion potential through the conversion of existing Inferred Resource as well as the deposit being open at depth and along strike.
Etango is considered by Bannerman to be a low technical and environmental risk project, with conventional open pit mining and sulphuric acid heap leaching at 20 million tonnes per annum.
The Etango licence area (EPL 3345) is approximately 500 square kms.
Bannerman Resources Limited is an ASX and NSX listed exploration and development company. Its principal asset is its 100 percent-owned Etango Project situated near Rio Tinto’s Rössing uranium mine, Paladin’s Langer Heinrich uranium mine and CGNPC’s Husab uranium mine currently under construction.
A DFS has confirmed the technical, environmental and financial (at consensus long term uranium prices) viability of a large open pit and heap leach operation at one of the world’s largest undeveloped uranium deposits. Since 2015, Bannerman has conducted a large scale heap leach demonstration programme to provide further assurance to financing parties, generate process information for the detailed engineering design phase and build and enhance internal capability.
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