Bannerman gambles on uranium spot price
Bannerman Resources is placing all its bets on an anticipated rise in the spot price of uranium to advance its Etango project. The Etango project will become the seventh biggest uranium project in the world. This was the indication given by Bannerman Chairman, Ronnie Beever.
Commenting on movements in the industry, Beever said, “Activity in the term market which historically trends 20% above the spot price is starting to increase as utilities realise that the price will rise in anticipation of the inevitable tightening and the shortfall in future supply.”
At a presentation held this week, Bannerman anticipates a looming deficit in the supply of uranium in 2020. Total demand for uranium oxide in 2020 is expected to come in at just under 210 Mlbs per year uranium oxide while total supply is expected to come in at 200 Mlbs per year.
Added Beever, “The recovery in the uranium market is proving slower than generally anticipated, Bannerman remains strongly placed with the important advantages of a completed Definitive Feasibility Study.” The completion of the study according to Beever puts Etango in a good position, ensuring its early mover advantage ahead of other uranium mines still in the planning stage. A rebound in the spot price will potentially bring various Namibian projects into fruition, namely Valencia, Norasa, Omahola and Rossing’s Z20 deposit. “Numerous companies have stated that a uranium price in the region of US$70 to US$80 per pound is required to incentivise the restart of mothballed operations or the development of new projects.” said Beever.
Bannerman’s efforts have been bolstered by the construction of a heap leach demonstration plant, expected to be completed in the first quarter of 2015. He added, “Our plan to demonstrate the acid heap leach concept encapsulated in the Etango Definitive Feasibility Study (DFS) has been widely received by all key stakeholders including shareholders, investors, the Namibian government and [Bannerman’s] employees. The program scheduled for 2015 should confirm the design and operating assumptions incorporated in the DFS and thereby further de-risk the Etango project.” In 2015, Bannerman will have its hands full maintaining and building project knowledge around its demonstration plant all in an effort to support its Definitive Feasibility Study.