Namibia's Husab Uranium Mine Project Could Be Global No. 3

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Extract Resources (ASX:EXT) (Perth, Australia) expects to extend the mine life of its Husab uranium project in Namibia when the Mine Optimization and Resource Extension (MORE) program has been completed later this year.

The resource at Husab is the fourth-largest primary uranium deposit in the world, and the mine is expected to produce 15 million pounds of uranium oxide a year. The final development decision on the $1.66 billion project will be made when funding has been finalized and the mining license has been granted.

A detailed project schedule was developed as part of the definitive feasibility study. The schedule indicates an engineering and construction period of 33 months, from project approval to hot commissioning.

In July, the project was given environmental approval from Namibia's ministry of environment and tourism for the linear infrastructure, covering access roads, electrical power, telecommunications and a water supply to service its proposed uranium mine. The government has assured Extract that proposed changes in Namibia's minerals policy would not affect the project and current license applications would continue to be assessed on their own merit.

Extract's projects manager, Andrew Penkethman, said that the company was confident that MORE would extend the mine life from the initial 16 years to at least 20 years and even longer. Reductions in the project's operating costs also were expected, partly due to reductions of up to 15% in the anticipated strip ratio. Operating costs of about $28.50 a pound are anticipated. At the end of August, the uranium spot market price was $48.85 per pound, which represented a decline of 13.5% from the $56.50 range over the last quarter.

Extract has another resource upgrade scheduled for the first half of 2012. The company expects that, after the upgrade is completed, additions to the initial 513 million-pound resource inventory will push Husab to No. 3 in the global uranium mine league, after McArthur River and Cigar Lake, which are both in Saskatchewan, Canada.

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