UraMin raises US$60 m for mine at Trekkopje

LONDON – British Virgin Islands-registered UraMin Inc, with access to potential uranium resources of 112 million kg of uranium oxide in Namibia and South Africa, raised £34 million (N$380 million) via a placing of 50 million ordinary shares at a price of 68.5 pence on London’s Alternative Investment Market (AIM) at the end of last month.

After expenses, the estimated net proceeds were US$54 million, and following completion of the placing its entire share capital was admitted for trading on AIM, giving it a market capitalisation – at the placing price – of some US$209 million. The shares initially rose strongly to 90 p, but have subsequently traded at around 85 p, resulting in a higher market capitalisation of some US$265 million.UraMin – one of whose two non-executive co-chairmen is Sir Sam Jonah, the former chief executive of AngloGoldAshanti (AGA) – holds mineral rights in Namibia, South Africa and Chad, and has also recently secured an option to acquire up to a 50 per cent interest in mining claims in the Athabasca Basin in Alberta, Canada.Chief executive is John Stalker, a former Gold Fields group vice president and AGA managing director.Namibia’s Trekkopje uranium project is the most advanced project, and should the company’s current application to the Ministry of Mines and Energy for a two-year exclusive prospecting licence (EPL) over the area prove successful, it intends to devote most of the proceeds from the AIM listing to bring Trekkopje into production.Pending approval of the EPL – which was applied for in February 2006 – the company has been assured by the Ministry that its existing mineral deposit retention licence (MDRL) remains in force, according to the AIM listing document prepared by stockbrokers Canaccord Adams.Following a request for a renewal of the MDRL, which expired in November 2005, The Ministry informed UraMin in writing in December 2005 that the MDRL could not be recommend for renewal and it was given a period of three months to apply for an EPL, requiring a higher level of prospecting expenditure.The company owns a 100 per cent interest in the 37 400 ha Trekkopje licence area via its wholly owned subsidiary UraMin Inc Namibia, previously known as Gulf Western Trading.Trekkopje, located some 65 km northeast of Swakopmund and 20 km north of the Roessing mine, contains large, but very low-grade uranium reserves and associated vanadium, with a total ore resource of 568 million tonnes, containing an estimated 55 000 tonnes of uranium oxide at an average grade of 0.01 per cent and 18 000 tonnes of vanadium.The area covers two deposits in close proximity – Trekkopje itself and Klein Trekkopje/Arandis – with 74 per cent of the ore stated to be at shallow depth and suitable for straightforward open-cast mining.To the east the area adjoins Hakskeen farm, where Australia’s Reefton Mining got into trouble with the Government last year by prematurely starting a drilling programme on a potential uranium find before it was entitled to.Although Mines and Energy Minister Erkki Nghimtina recently announced that Trekkopje would commence production at the end of this year, the listing document makes it clear a longer development period is envisaged.Once the EPL has been granted, UraMin says it will carry out a feasibility study over the next 18 months, to be followed by construction of a mine and process plant, assuming the results of the study are favourable.Production is envisaged as starting in the latter part of 2008 for a total capital cost of US$181 million.As well as the feasibility study, UraMin plans to carry out further drilling to confirm the extent of the mineable resource.Some 90 per cent of the ore body is currently categorised as inferred reserves – the least proven category – with an indicated (proven) resource of 41 million tonnes, containing 6 000 tonnes of uranium oxide at a slightly higher 0,015 per cent average grade.Nevertheless, UraMin is confident of providing sufficient additional reserves to make a mining operation feasible.A conceptual technical and economic study of Trekkopje by South Africa’s Turgis Consulting – based on a uranium spot price of US$38.5/lb (which has since risen to around US$50/lb) – indicates a 20-year mine life, at an annual production rate of 14,4 million tonnes of ore, and average recoveries of 1 430 tonnes per year of uranium oxide and 740 tonnes per year of vanadium.Operating costs were calculated at US$15.60/lb, providing for a 44 per cent project internal rate of return (at the then uranium price).UraMin holds several South African prospecting grants (via a 70 per cent owned subsidiary Mago Resources) and has applied for around 50 others over uranium deposits near Beaufort West in the Karoo Basin – located mainly in northeast Western province and the south of Northern Cape province – and at Springbok Flats, on the border of Mpumalanga and Northern provinces.The total resource is estimated at 213 million lb uranium oxide and 69 million lb molybdenum.Karoo mineralisation comprises irregular shaped pods or lenses of varying size, with the Ryst Kuil channel containing an estimated 79 MlbU308.UraMin’s current prospecting grant there is subject to South African government approval of a transfer of the rights originally granted to Ngondo Mono Seuns Boerdery Trust which is stated to be under contractual obligation to Mago.UraMin acknowledges that there is a risk that some or all of the additional 13 prospecting rights applied for may not be granted.In Canada, UraMin has an option with Red Dragon to acquire a 50 per cent interest in the Rea property, comprising 20 mining permits covering 446,000 acres overlying the western margin of Athabasca basin which hosts high-grade unconformity-type deposits currently accounting for some 30 per cent of globally mined uranium.In Chad, UraMin holds mineral rights over four areas (740 km2) although most previous exploration data has been lost and ground work was carried out only in one (Madagzang).The shares initially rose strongly to 90 p, but have subsequently traded at around 85 p, resulting in a higher market capitalisation of some US$265 million.UraMin – one of whose two non-executive co-chairmen is Sir Sam Jonah, the former chief executive of AngloGoldAshanti (AGA) – holds mineral rights in Namibia, South Africa and Chad, and has also recently secured an option to acquire up to a 50 per cent interest in mining claims in the Athabasca Basin in Alberta, Canada.Chief executive is John Stalker, a former Gold Fields group vice president and AGA managing director.Namibia’s Trekkopje uranium project is the most advanced project, and should the company’s current application to the Ministry of Mines and Energy for a two-year exclusive prospecting licence (EPL) over the area prove successful, it intends to devote most of the proceeds from the AIM listing to bring Trekkopje into production.Pending approval of the EPL – which was applied for in February 2006 – the company has been assured by the Ministry that its existing mineral deposit retention licence (MDRL) remains in force, according to the AIM listing document prepared by stockbrokers Canaccord Adams.Following a request for a renewal of the MDRL, which expired in November 2005, The Ministry informed UraMin in writing in December 2005 that the MDRL could not be recommend for renewal and it was given a period of three months to apply for an EPL, requiring a higher level of prospecting expenditure.The company owns a 100 per cent interest in the 37 400 ha Trekkopje licence area via its wholly owned subsidiary UraMin Inc Namibia, previously known as Gulf Western Trading.Trekkopje, located some 65 km northeast of Swakopmund and 20 km north of the Roessing mine, contains large, but very low-grade uranium reserves and associated vanadium, with a total ore resource of 568 million tonnes, containing an estimated 55 000 tonnes of uranium oxide at an average grade of 0.01 per cent and 18 000 tonnes of vanadium.The area covers two deposits in close proximity – Trekkopje itself and Klein Trekkopje/Arandis – with 74 per cent of the ore stated to be at shallow depth and suitable for straightforward open-cast mining.To the east the area adjoins Hakskeen farm, where Australia’s Reefton Mining got into trouble with the Government last year by prematurely starting a drilling programme on a potential uranium find before it was entitled to. Although Mines and Energy Minister Erkki Nghimtina recently announced that Trekkopje would commence production at the end of this year, the listing document makes it clear a longer development period is envisaged.Once the EPL has been granted, UraMin says it will carry out a feasibility study over the next 18 months, to be followed by construction of a mine and process plant, assuming the results of the study are favourable.Production is envisaged as starting in the latter part of 2008 for a total capital cost of US$181 million.As well as the feasibility study, UraMin plans to carry out further drilling to confirm the extent of the mineable resource.Some 90 per cent of the ore body is currently categorised as inferred reserves – the least proven category – with an indicated (proven) resource of 41 million tonnes, containing 6 000 tonnes of uranium oxide at a slightly higher 0,015 per cent average grade.Nevertheless, UraMin is confident of providing sufficient additional reserves to make a mining operation feasible.A conceptual technical and economic study of Trekkopje by South Africa’s Turgis Consulting – based on a uranium spot price of US$38.5/lb (which has since risen to around US$50/lb) – indicates a 20-year mine life, at an annual production rate of 14,4 million tonnes of ore, and average recoveries of 1 430 tonnes per year of uranium oxide and 740 tonnes per year of vanadium.Operating costs were calculated at US$15.60/lb, providing for a 44 per cent project internal rate of return (at the then uranium price).UraMin holds several South African prospecting grants (via a 70 per cent owned subsidiary Mago Resources) and has applied for around 50 others over uranium deposits near Beaufort West in the Karoo Basin – located mainly in northeast Western province and the south of Northern Cape province – and at Springbok Flats, on the border of Mpumalanga and Northern provinces.The total resource is estimated at 213 million lb uranium oxide and 69 million lb molybdenum.Karoo mineralisation comprises irregular shaped pods or lenses of varying size, with the Ryst Kuil channel containing an estimated 79 MlbU308.UraMin’s current prospecting grant there is subject to South African government approval of a transfer of the rights originally granted to Ngondo Mono Seuns Boerdery Trust which is stated to be under contractual obligation to Mago.UraMin acknowledges that there is a risk that some or all of the additional 13 prospecting rights applied for may not be granted.In Canada, UraMin has an option with Red Dragon to acquire a 50 per cent interest in the Rea property, comprising 20 mining permits covering 446,000 acres overlying the western margin of Athabasca basin which hosts high-grade unconformity-type deposits currently accounting for some 30 per cent of globally mined uranium.In Chad, UraMin holds mineral rights over four areas (740 km2) although most previous exploration data has been lost and ground work was carried out only in one (Madagzang).