34 RESOURCES

INDUSTRIAL MINERALS prevails

Development of new mines continues in the uranium sector despite current low prices for the commodity, reports Roger Murray

he and devel- tors closed (six permanently) – after On the supply side, Kazakhstan opment sector is locked into Japan’s March 2011 earthquake/ has provided some stability by this T survival mode, with cuts to tsunami seriously damaged the year pledging not to raise produc- mine production, development Fukushima nuclear plant – have tion above the 28,000t of U3O8, rep- delays and exploration spending restarted; as more come back into resenting 39% of global uranium freezes as companies struggle to operation, this will provide another output, that it produced last year. balance the books and cope with the upward impetus to demand. drop in the uranium spot price to an However, it is China’s purchase SALAMANCA SHINES 11-year low of US$24/lb for uranium of nuclear fuel for its expanding One mining development proceed-

Bannerman oxide (U3O8) as of September. nuclear-plant network (an average ing is Salamanca in west-central Resources’ The principal cause of supplier six new reactors are due on line each Spain, where Berkeley Energia has heap-leach woes is continued weak demand. year until 2020) that provides the already begun initial site infrastruc- uranium Western utilities remain well-stocked main upside. Analysts see China’s ture works, with mine start-up cur- demonstration with inventory, although it is antici- continued inventory accumulation rently scheduled for 2018. plant on its pated that some at least will resume as the leading factor likely to spark Salamanca’s location in a Etango project buying activity in the next two years. a recovery in uranium in the next two first-world jurisdiction with well- in So far, only a few of the 54 reac- years. established infrastructure nearby is

November 2016 www. .com RESOURCES 35

seen as a key advantage by Berkeley. upside potential from the higher- with waste and treated ore to mini- The initial development stage is fully grade Zona 7 deposit. mise land disturbance. funded; Berkeley had A$11 million The DFS confirmed that the Sala- Processing will comprise heap ($8.4 million) in cash and no debt as manca project will be a low-cost pro- leaching/solvent extraction with no “The of end-June 2016, and to fund the ducer capable of generating strong on-site sulphuric acid needed as estimated US$96 million up-front after-tax cash flow through the cur- supplies are available from regional principal capital cost the firm is seeking a rent low point in the uranium price smelters. Managing director Paul cause of minority equity investment from a cycle. Over an initial 10 years, annual Atherley says that inclusion of Zona supplier strategic partner for a price reflect- steady-state output would be 7, the most recently discovered ing Salamanca’s US$532 million post- 4.4Mlb (1,996t)/y U3O8 at a deposit, has “transformed the eco- woes is tax net present value (NPV). US$13.30/lb cash cost, below even nomics of the Salamanca project and continued MDM Technical Africa, a wholly the currently depressed spot-market provided the basis for us to com- owned subsidiary of the AMEC price. Over the 14-year life of mine mence development”. weak Foster Wheeler group, has been (LoM), output would be 3.5Mlb Zona 7 currently accounts for just demand. appointed to undertake the front- (1,588t)/y at a 15.06/lb cash cost. over 40% of Salamanca’s measured Western end engineering design (FEED) Salamanca is projected to generate and indicated resource at a higher based on the definitive feasibility an average annual net profit after grade of 0.7-0.8% U3O8, with an utilities study (DFS) that AMEC completed tax of US$116 million during steady- extensive drill programme targeting remain in July 2016. state operation. Zona 7 extensions and similar depos- Measured and indicated resources Mining will start at Retortillo, one its under way. well- for the DFS were 60Mlb (27,215t) of of three shallow Salamanca deposits Berkeley aims to conclude long- stocked” contained uranium grading an aver- and where a central processing plant term uranium offtake contracts age 516ppm (0.05%) U3O8, with a is to be located, using a continuous from now until Salamanca starts up 30Mlb (13,608t) inferred resource mine-rehabilitation process involving and, in September, signed its first not taken into account, and further progressive lining and backfilling such agreement with European

www. .com November 2016 36 RESOURCES

Husab in Namibia is the largest single open-cast mine built in the past two decades. Near right: 3-D layout plan

Above: aerial view of Husab plant

Above right: covered ore stockpile at Husab

Right: Husab site at night

commodities trader Interalloys Trad- for nuclear fuel, which may lead to N$147 billion (US$11.5 billion) in ing. An initial letter of intent should higher spot-market and long-term 2015 – by some 7% and expand be finalised into an offtake contract contract prices. export earnings (US$4 billion) by “At full by the end of 2016; both parties about US$0.5 billion. capacity, “contemplate” an average price of HUSAB MEGA MINE Despite the unfavourable market, US$41/lb U3O8 – well above the cur- But before Salamanca kicks in as construction of the US$2.2 billion Husab is rent spot-market price. The firm Europe’s first new uranium mine, the mine, processing plant and associ- projected to intends to use a combination of much larger Husab mine in - ated infrastructure, has been unaf- fixed and market-related pricing to ia’s central Namib Desert will be pro- fected and works completed to increase ensure positive operating margins ducing, predominantly to supply schedule by the Husab Project Joint Namibia’s in the initial years of production. Chinese nuclear power plants. Venture (HPJV), the engineering, GDP by Berkeley’s view of the market Husab is the largest single open- procurement and construction man- is that while prices may stay flat cast mine (two pits) built in the past agement (EPCM) joint venture of some 7%” in the near term, from 2018, when two decades or more and has also AMEC and Tenova Bateman. Most Salamanca is expected to start up, been the biggest 21st century mine- Husab product will be sold to a demand will be increased by US utili- construction project in southern guaranteed market in China with ties looking to re-contract coupled Africa. At full capacity, Husab is pro- only some 10-15% expected to be with Chinese new reactor demand jected to increase Namibia’s GDP – sold on the open market.

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View of Originally known as Rössing South Bannerman’s due its proximity to Rio Tinto’s long- Etango established Rössing mine just to the demonstration north, Husab has been developed in plant from the just over 10 years since the deposit entrance was first discovered in early 2008 by Australia’s Extract Resources. Husab has huge, relatively high-grade reserves in two main resource areas, Zones 1 and 2. Proven and probable reserves total 320Mlb (145,150t) of contained yellowcake, grading 0.6%

U3O8 proven and 0.5% probable. Commissioning was due to have been completed during October, with ramp-up to full capacity of

15Mlb (6,800t)/y of U3O8 expected during 2017, Swakop Uranium’s CEO, Zheng Keping, confirmed at the September annual symposium of the World Nuclear Association (WNA) in London. Swakop U is 90%- owned by Taurus Mineral, a subsidi- ary of China General Nuclear Power Corp and China-Africa Development Fund; Namibian state-owned Epan- gelo Mining Co has a 10% free-car- ried interest. Mining and load haul of ore from Husab’s two open pits began in 2014 to build up a stockpile ready for of the workforce is Namibian and the March 2015 have demonstrated or immediate processing once the proportion is due to reach the 95% simulated the heap leaching and plant becomes operational, with an target by the year-end. solution recycling aspects of the average 50Mt/y of ore due to be processing route, validating DFS treated by conventional acid-tank ETANGO DEMO PLANT assumptions. leaching/solvent extraction. Also in Namibia, Australia’s Banner- Phase 5 aimed to optimise the So far, Husab has deployed a large man Resources has successfully com- process parameters and showed that mining fleet of 26 Komatsu 960E- pleted five stages at the heap-leach processing more coarsely ground “Husab is 2KT AC haul trucks, six Caterpillar demonstration plant on its 100%- material at reduced acid consump- employing hydraulic face and rope shovels and owned Etango project near to tion could contribute to further six drill rigs. Husab, and in October announced reductions in capital and operating 1,600 Two innovative designs, installed that it would proceed with an addi- costs. permanent to maximise environmental protec- tional sixth phase. CEO Brandon Munro comments tion and minimise wind-blown dust, The plant was commissioned in that the two-year programme has workers are a covered ore stockpile with a September 2015 with the purpose provided a “superb” return on and 400 large over-all triangular roof and a of demonstrating the potential for investment and “has now been contractors, fully lined tailings storage facility achieving substantial capital and extended into a sixth phase, such is (TSF). An onsite acid plant will pro- operational cost savings compared the extent of the positive impact on with a duce 1,500t/d, while Swakop U has with a 2012 Etango DFS. This is part capital and operating costs we strong also built a US$2.5 million onsite lab- of the firm’s strategy to leverage expect to attain”. oratory to analyse 70,000 ore sam- Etango to take advantage of a rising Phase 6 (results due by due by focus on ples per month. uranium price environment at which end-November 2016) is focused on training Infrastructure includes a 22km per- point a development decision would using a conventional tertiary crushing and manent surfaced road through the be taken. circuit, coarser particle size distribu- surrounding mountains to connect Based on the DFS, annual produc- tion of material going into the heap develop- with the main B2 tarred highway, tion is planned to be 7-9Mlb (3,175- and a reduction in binder addition

ment” and a 65km water pipeline from the 4,082t) U3O8 for the first five years without compromising heap stability. coastal town of where and 6-8Mlb (2,722-3,629t) thereafter it connects to the AREVA-owned over a 16-year minimum LoM. Etango U-PGRADE TUMAS DEAL desalination plant to the north. would be potentially Namibia’s sec- Still in Namibia, Australia’s Deep Yel- On the staffing side, Husab is ond-biggest uranium mine. Ore low and Marenica Energy have exe- employing 1,600 permanent workers reserves total 280Mt grading an aver- cuted a binding technology licence

and 400 contractors, with a strong age 194ppm (0.19%) U3O8 for 119Mlb agreement for use of the latter’s pro- focus on training and development. (53,977t) of contained uranium. prietary U-pgrade process at Deep Last year, 350 mining and process The five demo-plant work phases Yellow’s Tumas project (See MM operators were trained. Some 93% completed since commissioning in September 2014).

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GREEN LIGHT FOR LETLHAKANE In Botswana, Australia’s A-Cap Resources has been granted a min- ing licence for its Letlhakane project, located near Francistown in the northeast. Formal confirmation was received in early September from the department of mines and the licence is valid for 22 years. A-Cap obtained final environmen- tal approvals and land-board pro- ject surface rights in mid-2016. It is sufficiently funded to continue pro- ject optimisation works and a PFS, and intends to seek a listing on the Hong Kong stock exchange and raise development capital for Bot- swana’s first uranium mine in early 2018. Its largest investor is Chinese private firm Jiangsu Chixiang Preci- sion Gear Co, which raised its equity interest to a 41.7% share- holding in September. The total resource (Gojwane/Ser- ule deposits), covering a 14km x 11km area, totals 269Mt grading

an average 0.03% U3O8 for 190Mlb (86,182t) at a 200ppm cut-off according to an October 2015 resource upgrade using a localised The firms announced in Septem- Deep Yellow will fund all project- uniform condition. This takes ber that U-pgrade would be used development expenditure including account of mining and grade-control at Tumas is in return for a long term costs associated with a pilot plant selectivity. licence fee (over the life of the pro- and further test work. A heap-leach process is under ject) equating to 25% of Tumas’ The Tumas palaeochannel strad- consideration, using two-stage acid estimated NPV under a range of dles Deep Yellow’s two wholly leaching, solvent extraction and ion “possible development scenarios”. owned licence areas and comprises exchange. The most recent drilling Deep Yellow noted that the three zones. The current resource programmes have targeted the early agreement follows the recent con- is 14.8Mt grading 366ppm (0.4%) optimised shells. This typically repre- clusion of a successful test work U3O8 for 11.9Mlb (5,398 t) of con- sent the earliest production poten- programme on Tumas ore and has tained yellowcake. tial; these are the Kraken, Gorgon The Husab been structured to share the eco- A Zone 1 infill drilling programme South and Serule West prospect tailings storage nomic benefits of the resource/ completed at the end of 2014 and a areas. facility technology combination under “var- subsequent geophysical modelling ious conditions”. The agreement exercise have provided additional initially comprises a series of lump- confidence in the resource. sum payments and then ongoing In emailed comments, Cochran fees once an U-pgrade pilot plant notes that the licence agreement has met specific performance indi- “means that we can move forward cators. very rapidly with a pre-feasibility The test work demonstrated study (PFS), resource extension drill- that processing Tumas ore using ing and further metallurgical test U-pgrade can reject up to 98% of work, which (funding permitting) the mass while recovering over 82% could be completed by the middle of the uranium content, which could of next year with a DFS completed substantially reduce both capital just a year later”. and operating costs, so enabling He added: “The process offers development at a lower uranium substantial benefits over conven- incentive price. tional processing routes and will see Deep Yellow’s managing director, a dramatic reduction in both capital Greg Cochran, said: “We have been and operating costs, which will carefully managing numerous paral- move the Tumas project forward in lel elements in regard to the Tumas the industry’s development cycle. project and have long been confi- I’d see us in commissioning just dent that those efforts would soon when the market is due to really be rewarded.” take off late in 2019.” www. .com November 2016