2006-08-03Staff Report 2 By Wezi Tjaronda WINDHOEK Just four months after Uramin Namibia announced it had renewed its license to mine the Trekkopje uranium deposit in Arandis, another company has done pre-feasibility studies to mine another deposit close to Langer Heinrich. The Valencia Uranium project has been having talks with the country's water utility Namwater for the provision of water for its activities. The Valencia project is located 35 km along the geological strike to the RÃÆ'Æ'Æ'ÃÆ''šÃ‚¶ssing Uranium Mine and 40 km from Paladin's Langer Hienrich uranium deposit. Its recently completed National Instrument 43-101 by Snowden concluded that the project represents an advanced stage uranium project that has potential for development as an economically viable mining operation. Namwater's Manager: Corporate Communications, Johannes Shigwedha confirmed the utility had been having talks with Valencia and Trekkopje for the provision of water to these mines once they start operations. Shigwedha said provision of the water would mean putting up pipelines, which is a costly venture. He could however not say when the water would be needed as the mines are still at feasibility stages. Efforts to get comment from the Ministry of Mines and Energy proved futile yesterday as the Permanent Secretary Joseph Iita was locked up in meetings for a great part of yesterday. The project is said to be one that has potential for commercial production. Historically, work on the project was conducted by Goldfields Namibia between 1973 and 1977 which included borehole drilling, chemical analysis, radiometric sorting tests on bulk ore samples in 1979 followed by two preliminary feasibility studies in 1981 and 1989. But due to low uranium prices at the time, Goldfields concluded the project was uneconomical. Forsys recently completed a transaction to acquire 90 percent interest in the deposit, while the remaining 10 percent is owned by Ongopolo Mining & Processing. The project has completed a National Instrument 43-101 compliant technical report verifying the historical work of Goldfields Namibia between 1973 and 1986, which outlines a historical resource of greater than 20 million pounds of uranium oxide. According to information posted on the Internet, a Valencia official said the deposit could be moved rather quickly into a production scenario. If this project reaches production stage, Namibia's position of being a leading producer of uranium will be further strengthened. Already, when Langer Heinrich starts production in September and Trekkopje comes into force, Namibia's position as not only one of the world's but also Africa's largest producer of uranium would shift upwards. It would become Africa's largest uranium producer and also shift upwards from its ranking as the seventh largest uranium producer in the world, a Ministry of Mines and Ener-gy official said recently. At the moment, Namibia comes second to Niger, which produces nine percent of the world's uranium, followed by South Africa, whose production is two percent. Namibia has eight uranium deposits mainly in the Namib Desert along the coastal areas of the Erongo region, namely Trekkopje, Klein Trekkopje, Engo Valley, Valencia, Klein Spitzkoppe, RÃÆ'Æ'Æ'ÃÆ''šÃ‚¶ssing and Langer Heinrich The ministry has received many applications for prospecting as well as mining, while many were also doing prospecting and some of the companies conducting uranium prospecting or exploration include: Extract Resources, Forsys Metal Corporation, Westport Resources Namibia (Pty) Ltd, Galahad Gold, Paladdin Resources, RÃÆ'Æ'Æ'ÃÆ''šÃ‚¶ssing Uranium Ltd, Uramin Inc, Namura Resources (Proprietary) Ltd, Xemplar Energy Corporation, Australian United Gold Ltd and Bannerman Resources Ltd. However, where water costs are high, uranium mining can become costly and uneconomic, meaning that the mine would require a pipeline. For example, the current pipeline to the RÃÆ'Æ'Æ'ÃÆ''šÃ‚¶ssing uranium mine has millions of cubic metres of water pumped through it annually. The Langer Heinrich also has a pipeline to pump the precious liquid in order to mine the uranium. There have however been concerns over producing uranium at less than $20/pound. But some estimate that even if it reaches as low as $12/pound, considering that uranium spot prices may top $40 per pound, any production costing under $20/pound, in sufficient quantities, could be bankable. Based upon the rising monthly value in his company's potential asset, brought about by soaring spot uranium prices, a Valencia official was quoted as saying that the company felt that they had a situation whereby they can fast-track a pre-feasibility stage by conducting some limited amount of verification drilling and geo-tech drilling, and then make a formal decision to move immediately into a bankable feasibility stage. 2006-08-03Staff Report 2
