Bannerman Resources

Developing one of the world’s largest uranium deposits

About This Project

The global uranium industry is in a state of flux. Suffering from a decade-low uranium price environment, new producers are prevented from entering the market unless they are sitting on exceptionally low-cost deposits. On the whole it is widely expected, if not assumed, that there will be substantial price increases for uranium between now and 2020, predominantly on the back of an aggressive Chinese nuclear expansion policy.  As a result, smart explorers and developers are positioning themselves to take advantage of the anticipated price rises.


The uranium developer in question here is the ASX-listed Bannerman Resources (ASX:BMN) (NSX:BMN). The Australian-led firm is in the process of developing one of the world’s largest undeveloped uranium deposits at the Etango mine, located in Swakopmund, Namibia. Having formed in 2006 specifically to pursue the Etango asset, Bannerman has now got an optimised, permitted, technically simple uranium mine ready to enter a rising market.


The Etango project went through a typical process of defining maiden resources, a scoping study, moving on to a pre-feasibility study and then in 2012 it reached some significant milestones, Bannerman Resources CEO Brandon Munro tells RGN.


“First of all we obtained an environmental clearance for the project and then we published our definitive feasibility study. That pushed us ahead of the pack in many respects because we had, not only a very large project in a premier mining jurisdiction, but a project that has a lot more maturity in terms of the key milestones than other uranium development projects.”


The 2012 definitive feasibility study confirmed to Bannerman and to the market that the Etango project was technically, environmentally and financially (at consensus long term uranium prices) viable.


However, 2012 was a difficult year for the uranium industry as it adjusted to the impact of the 2011 meltdown at the Fukushima-Daiichi nuclear power plant in Japan. Subsequent reactor closures in Japan and elsewhere led to a sharp drop-off in demand and sentiment for the uranium sector.  In the post-Fukushima era Bannerman actively moved against the grain.


“One thing Bannerman has done which continues to differentiate and distinguish us, was the board taking the decision to continue building on the first mover advantage we had back then. We have completed a great deal of additional technical work since then [Fukushima].”


The extra technical work includes the release of an optimised definitive feasibility study in September 2015. That study brought down the operating and capital costs significantly from the initial DFS in 2012. Operating costs in the first five years decreased to $33/lb U3O8 (from $41/lb) and average life of mine operating costs fell to $38/lb U3O8 (from $46/lb).  Pre-production capital costs were reduced from $870 million to $793 million including the mine fleet (a competitive capital intensity of $110/lb of annual U3O8 production).


The most recent development was the construction and successful operation of a heap leach demonstration plant or pilot plant. Munro says Bannerman has since spent the last 18 months proving the heap leaching flowsheet but also optimising reagent use and acid consumption.


“It was all with a view to removing potential financing risk factors. We now have demonstrable results on the heap leaching front and the successful pilot plant also enabled us to now start factoring a number of proven parameters into our costs with a view to further optimise the DFS and bring costs down.”


The Etango project ticks all the boxes for a world-class uranium mine, which off-sets the impact of being relatively low grade.  All of the technical, infrastructural, environmental and societal elements are there and they are supplemented by Munro’s local expertise.


Bannerman’s CEO has practical experience of operating a mining company in Namibia. Firstly, he worked as the general manager for Namibia while in his first stint at Bannerman between 2009-2011. Then in the post-Fukushima lull he went into the Namibian copper market, built up a company called Kunene Resources, acquired exploration licences, listed the company on the ASX then subsequently joint ventured the portfolio with First Quantum Minerals. He returned to Bannerman as CEO with a strong Namibian mining network and contacts in government, industry and environmental circles. Now he is confident that Etango is well positioned for success.


“Once you’ve accepted the grade is relatively low, absolutely everything else works strongly in its favour.”


Munro says principally this is because it is located in a very accommodating mining jurisdiction – he calls Namibia the ‘best uranium mining jurisdiction in the world’. Munro cites three key reasons: Namibia is a stable country with a good rule of law and well-developed mineral code – something you cannot take for granted in Africa. The country has a 40-year history of producing and exporting uranium so its regulatory system is well developed and effective.  Finally, Namibian society is comfortable with uranium and supports the industry because of the economic development it has delivered over four decades.


Also working very strongly in Etango’s favour is the project’s technical simplicity. Bannerman’s project is relatively straightforward and does not suffer from the complexity and cost associated with many of the world’s most prominent uranium mines.


“It’s a very large, geologically simple, mineralogically consistent ore body that can be mined from surface using conventional large scale, open pit mining methods.”


One of the most important elements of the Etango project, the pilot plant, now enables Bannerman to prove the leaching dynamics of the ore are ‘fantastic’.


“[Etango ore] leaches exceptionally quickly, we obtained 93% recovery in only 22 days. The acid consumption is very low as we have virtually no carbonates to speak of in our ore body.”


On top of that, all of the necessary infrastructure is already in place. There is a Class 7 radioactive handling plant, a deep water port 40km away, a power line runs right past the licence, an existing desalination plant with easy access and there is also rail and road access to the project. Bannerman won’t be relying on any further significant capital works to build the project, according to Munro.


While there are many positives for Etango there is a major barrier to entering the market that is out of their control. At current uranium prices the Namibian project would not be economical and therefore not possible – however, as mentioned, there is an industry-expected spike to come.


“We have a very robust view of where we see uranium going in the medium term and because of that we have continued to invest in the project and we think it will be an outstanding project.


“Because of its scale as one of the largest undeveloped uranium deposits in the world, it is very well leveraged to a uranium price recovery.”


In predicting the price increase, Munro takes the view that it is going to come from substantial developments in China’s approach to nuclear energy, coupled with the implementation of India’s nuclear programme.


“The Chinese demand, both domestic and export demand, is going to increase substantially between now and 2030, there’s a well-documented nuclear build occurring in China and that has a substantial requirement for uranium.”


Although, Munro says this is just the beginning. China has made international commitments to 20% clean energy usage (a doubling of current levels) and Munro feels that hydro, renewables and gas can only scale so far and that nuclear will have to make up a lot of that number.


On the supply side uranium faces some uncertainty looking forwards. Because of the sensitive nature of uranium mining, especially following Fukushima, Munro says that uranium production is inextricably linked with the geo-political stability of the host country, the project’s environmental performance and the societal acceptance for mining the uranium.


“For example, Scandinavian nuclear utilities carefully assess the environmental and social credentials of uranium supply because their constituents don’t want their power from a source that may be alienating communities or not respecting the environment.


“Namibia has proven itself as having a preferred brand of uranium for all those reasons.”


Bannerman will provide key benefits to Namibia as a host country. Primarily the benefits to Namibia will come once Etango is in production in the form of highly-skilled and highly-paid jobs for Namibians as well as royalties and taxes for the government, but Munro wants to position Bannerman as a leader in Africa in the delivery of CSR projects, a strategy that can’t wait until production.


“We are certainly regarded by the Namibian mining industry as being the gold standard for exploration and development companies in terms of what we can achieve.”


Munro does not hesitate to recognise the key work than has been completed by the suppliers for the Etango project.


“Amec Foster Wheeler have been with us throughout, doing our engineering associated with the various feasibility studies and the optimisation work. Optiro have been close to us on the specialist technical work. Coffey have been important in our resource work, supporting our internal resources. Almost all of the drilling was undertaken by a Namibian company, that we assisted in expanding to meet the task, Metzger Drilling. On the environmental side we’ve used SLR in a co-ordinating role with ERM as a peer review.”


As the industry waits for the uranium price rise to provide a unilateral boost, Bannerman are ensuring they are ready to take advantage. Munro is pressing forward with optimisation work which has come about from the opportunities presented by the pilot plant and are in the process of extending the pilot plant into a sixth phase. On the project side Munro says there are still opportunities to add tens of millions of dollars in net present value to Etango through reducing the operating and capital costs of the project.


Munro is expecting a price correction for uranium in the medium term and he expects that to mirror the 2005-2007 prices which exceeded $80/lb U3O8.  This correction is based on prices anticipating a well-documented supply shortfall to occur in 2021.  However, after five years of under-investment following Fukushima and with uranium mines being difficult to bring into production, Munro says there are few mines in the world that can respond to the supply shortfall and only modest scale can come from the few mines on care and maintenance which can react quickly to a price shift.


“The dynamics mean that as the price starts to rise it is going to be difficult for supply to respond. Bear in mind there are less than a handful of uranium development projects with the level of technical work and permitting we have. So apart from optimising the financial parameters of our project, we are further positioning ourselves to be ready for that recovery in uranium prices so that we can be one of the projects capable of delivering into the anticipated shortage of supply… and therefore the aggressive price rises we are anticipating.”

Bannerman Resources




+61 8 9381 1436

Australia, uranium