Bannerman Energy Limited has announced significant further de-risking of its Etango uranium development in the Erongo Region through the completion of the Front-End Engineering and Design (FEED) and Control Budget Estimate (CBE) processes.
The company said the completion of FEED and the CBE has refined the outcomes of the Definitive Feasibility Study (DFS) undertaken in late 2022, delivering enhanced accuracy and key cost estimates.
Bannerman is currently undertaking early works construction activities for Etango-8, in parallel with offtake marketing and strategic financing works streams.
Commenting on these outcomes, Bannerman Chief Executive Officer, Gavin Chamberlain, said: “The early development of our Etango-8 project is progressing well, with positive outcomes from the FEED and CBE processes. The FEED work has confirmed the high quality of the technical evaluation and design, as detailed in the December 2022 DFS. Finalising the CBE has demonstrated the robustness of the DFS cost estimates, evidenced by the lack of significant increases in forecast construction or operating costs. Additionally, the moderate increase in forecast pre-production capital is attributed to design enhancements that deliver cost efficiencies and reduce operating risks.”
The company said Bannerman has now commenced the first stage of detailed design for Etango proceeding with finalising the bulk earthworks design.
“Early works on the Etango access road and construction water pipelines are proceeding well, with both due for completion in July. These two contracts are seen as natural enablers for the subsequent placement of the bulk earthworks contract.”
The Etango-8 CBE was undertaken concurrently with the FEED process to further increase the estimation accuracy of the capital and operating cost forecasts in the December 2022 DFS and to update those forecasts to current market conditions.
The progress from DFS to CBE resulted in increases in pre-production capital costs, with the DFS pre-production capital estimate of US$317 million increasing by US$36 million or 11.3%, to US$353 million.
Total mining operating cost based on competitive contract tenders decreased by 2,1% from US$2,36 per ton.
In terms of foreign exchange, the long-term foreign exchange forecasts were revised to reflect changes in exchange rates over the last 18 months and updates to long-term forward contracts and consensus pricing, with the primary impact arising from changes to the Namibian Dollar exchange rate (which is pegged to the South African Rand).
The company said the revised long-term US dollar/ Namibia dollar assumption of 19,28 represents a modest weakening of 9,8% against the previous estimate (US$: Namibia Dollar, 17,56).
