Bannerman Resources (BMN-A) Welwitschia uranium project in Namibia is named after a rather ugly plant found exclusively in the Namib Desert of Southwestern Africa where the company is actively drilling.
But Bannerman doesnt take its inspiration from the leathery, lifeless-looking Welwitschia plant, which survive for a surprising 400 to 1,500 years.
Rather, the company is looking to Rio Tintos 30-year-old Rossing uranium mine, 20 km northeast of its own growing deposit, as a more realistic example to emulate.
Similar grades, host rocks and Rossings tried and tested processing methodology makes the path to production already quite smooth, and could bring Bannermans goal of becoming one of the worlds top 10 uranium producers within reach.
What Bannerman needs next is U3O8 volume. An updated resource is promised by the end of the year. That will be followed by a bankable feasibility study in mid 2008, but a scoping study that came out in September gives an idea of what Bannerman thinks it can achieve.
Bannerman sees construction for an open pit mine by late 2009 and wants to be producing as much as 4,000 tonnes (8.8 million lbs.) U3O8 per year by 2011.
So far, the company has reported an interim inferred resource of 55 million tonnes grading 0.0210% (219 parts per million (ppm)) U308, or 27 million lbs. U3O8, using a cut off of 0.01% . Bannerman managing director Peter Batten is reluctant to broadcast this number.
It has done nothing but confuse the market, Batten says in the living room of a spacious villa in Swakopmund, a Namibian tourist haven where the golden desert sand dunes collide with the rough Atlantic.
Swakopmund is 25 km from Goanikontes. The rented home doubles as the companys Namibian office and a home away from home for the Australian management.
A lot thought 27 million lbs. was all we had — they didnt know we had an aggressive drill program, Batten says. But we can only consider what we know.
The deposit includes a 21-million-tonne core grading 0.0308% (308 ppm) U3O8 and is based on drilling to an average depth of 80 metres over a 1.4-km strike length. Since then, the strike has been extended to at least 2.3 km, and drilling has extended beyond 300 metres deep.
In a years time, Bannerman has done nearly 3,500 metres of diamond drilling and more than 40,000 metres of RC drilling.
Right now the company has four drill rigs in action on a 100-metre by 100-metre spacing, with another two on their way. The focus is Goanikontes Anomaly A, which is one of 10 anomalies found in the area known as the Palmenhorst Dome. The company plans to explore the other anomalies next year.
A total of 257 holes were drilled on Anomaly A during the 1970s and 1980s. Bannerman has validated 40% of those by drilling comparative diamond holes and twinning historical holes.
Bannerman has also done more than 6,000 metres of RC drilling at its nearby Swakop River project.
Scoping Study Details
The study found that the alaskite material that hosts the uranium mineralization is very similar to the alaskite mined and processed at the Rossing mine. The dominant uranium minerals are uranite, pitchblende and uranophane.
So far the resource has only been modeled on alaskites, not sediments, but Batten is quick to point out that 40% of Rossing uranium production comes from sediments.
The Rossing mine has a reserve of 37,000 tonnes U3O8 and a resource of 135,000 tonnes U3O8. Rio Tinto produced 3,600 tonnes U3O8 in 2006 with a goal to increase to 4,000 tonnes this year, eventually increasing capacity of 4,500 tonnes U3O8 per year.
Bannermans scoping study used grades of 0.0219% and 0.03% U3O8 as the final resource wont be ready until early 2008.
With a conceptual mineral resource of 100 million lbs. U3O8 and a mine life of 12 to 15 years, the study looked at a 15 million-tonne per year mining operation.
The operation would produce a maximum of 4,000 tonnes U3O8 each year and a minimum of 2,900 tonnes U3O8, using a uranium price of US$45 per lb.
Operating costs were estimated at US$27.18 per lb. U3O8, which includes the cost of contract mining.
Capital costs were put at a maximum of US$400 million with an accuracy of +/-30%.
The mine would be a conventional open pit, drill and blast followed by load and haul with a waste-to-ore stripping ratio between 1.5 and 2. The project would include the same conventional acid leach process used at the Rossing mine, which gets a 90% recovery rate.
The processing plant would incorporate communition, acid leach, solvent extraction, and precipitation and calcinations circuits.
The company looked at both dry and wet communition circuits the water-saving dry circuit uses a two-stage crush producing a 1.3 millimetre product compared to a 425-nanometre product through the wet circuit, which uses a conventional single stage crush followed by an SAG ball mill circuit.
High pressure grinding rolls (HPGR) is the process fundamental to dry communition, and is commonly used in the cement and diamond industries, but until recently has not be commonly used in other mineral processing.
The scoping study found that there are more than 500 operations worldwide that use HPGR to some degree, which include the Cerro Verde copper mine in Peru, run by Phelps Dodge, now a subsidiary of Freeport McMoRan Copper and Gold (FCX-N) and Adanac Molybdenums (AUA-T, AUAYF-O) Ruby Creek molybdenum mine in British Columbia.
The ability to use less water is a major positive aspect of this technology for use in water-scarce environments like Namibia, Batten says.
Bannerman says it could save up to US$28 million by using radiometric sorting to reduce flow through the circuit by up to 23%, or, 11.6 million tonnes per year. This in turn would reduce the amount of acid and other reagent consumption, water usage, crushing requirements and power costs.
The processing methods will be tested in the bankable feasibility study.
Infrastructure
The drive from Swakopmund to the Goanikontes deposit is one done best with the windows rolled up.
Wide and flat, the gravel roads are so well-maintained that motorists travel at highway speeds though with the arid conditions the ensuing dust is more like a thick beige fog.
Aside from good roads, railway infrastructure is in place that links the area to Namibias only deepwater port in Walvis Bay, just 40 km away.
Much more of a concern than transport is water and power.
Bannerman has begun discussions with the government power utility NamPower. The project would require 30 megawatts of power, which the company plans to get from the national grid on a tie-in basis. For this, the company will need an 11-km long, 66-kilovolt line.
Currently, Namibia imports most of its power from ESCOM in South Africa but with supply shortages there, the Namibian government plans to build a 400-600 megawatt power line link from Zambia that is supposed to be ready by late 2009.
Bannerman is also counting on NamWater, the government water utility, to supply it with 3.45 to 5.25 million cubic metres of water per year.
Notes urging guests to conserve water are found in the nicest hotel bathrooms in the capital city of Windhoek on account of ongoing drought-like conditions, as a reminder of the countrys inadequate water supply.
NamWater has promised to build a 25 to 30-million-cubic-metre water desalination plant on the coast 38 km north of Swakopmund for use by the uranium industry by late 2009. Bannerman would need to construct its own pipeline to carry the water 40 km to Goanikontes.
Forsys Metals (FSY-T) has signed an offtake agreement with NamWater, to supply its Valencia uranium project by then end of 2009, which will require up to 3 million cubic metres of water per year.
Thats a full year before Bannerman would begin production.
Should it become apparent in early 2009 that NamWater cannot supply water there is ample time to undertake alternative arrangement so sign third party agreements for water, Batten says.
NamWater is already obliged to supply the Rossing mine and Paladin Res
ources (PDN-T, PDN-A) Langer Heinrich mine, which went into production last March. Together, the mines currently require about 7.5 million cubic metres of water per year. NamWater will need an alternative source for these two mines from 2010, and the only viable option will be desalination.
Uramin, a subsidiary of Areva (ARVCF-Q), has been making plans to construct its own desalination plant that would produce 15 million cubic metres water per year, at last count. The company says it will need about 12 million cubic metres of water per year to produce 3 million lbs. u3O8 at its Trekkopje project by the end of 2008.
Safety
The dusty desert sands can be dangerous to inhale on their own but in an already highly radioactive area, alpha radiation is something that Bannerman is even more concerned about.
When radioactive particles are ingested into the body, the radiation can be very destructive within a short range.
The potential is minuscule but its the perception, Batten says, as a group of analysts, journalists and geologists adjust their disposable dust masks and safety glasses.
Bannerman insists on a strict procedure for its personnel. Drillers and other workers are picked up and dropped off at the companys core shack where they must shower and change their clothes before and after work. Each day they are supplied with a clean set of coveralls.
What we do is overkill, Batten says.
But the companys actions minimize the threat associated with handling reverse-circulation drill core in the blustery unsheltered desert.
Namibia
Batten says that generally speaking, its easier to operate in Namibia, compared to Western Australia where the company is based.
Mining companies now complain of getting tangled in green and red tape in WA, where uranium mining is not allowed, and the exploration and mining of all other minerals has become difficult.
It used to be the case that you could apply for a licence and be confident that you would be able to be exploring in the following field season, Batten says. I have previously had an application in the process for over 5 years awaiting Native Title Clearance, he says.
He rants of pour infrastructure for shipping and exporting that the government has been reluctant to upgrade.
Batten says you cant compare the two, but is quite positive about working in Namibia, which was rated no. 2 behind Sweden in
Although our licences in Namibia were originally refused and we had to access the appeal process, our licences were granted in twelve months, Batten says.
Australia was at the top of the list in 2004 but fell to eighth place in this years survey. Canada was rated no. 4 while Pakistan finished in as the riskiest country at no. 32.
Outlook
Up next, Bannerman plans to list on the Toronto Stock Exchange by November and will then tender for the bankable feasibility study followed by a financing to fund it.
The company is confident in what the feasibility study will bring — all based in the success its had up until now.
We have delivered on schedule despite the project now being several times larger than our original assessment, fact proving far better than fiction, Batten wrote in an email. The only reason we may be delayed in meeting any of our targets will be the increase in size of the project and the work required to define the resource limits.
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