Albidon and African Energy upbeat about Zambian uranium project
mineweb.com
Albidon and African Energy, who are progressing the Chirundu Uranium Project in Zambia, say the mine will be a low-cost mine with high returns.
Author: Rodrick Mukumbira
Posted: Friday , 09 May 2008
WINDHOEK -
Joint venture partners in the Chirundu Uranium Project in Zambia, Albidon Ltd. and African Energy Resources are upbeat that commercially viable mining is possible following a pre-feasibility study that upped the project's inferred resource estimate.
The completion of the study, which was undertaken by African Energy, ensures that the Perth-based exploration and development company earns 70% from the project, while AIM and ASX-quoted Albidon would earn the rest.
Shares in African Energy were three cents higher at 29 cents on Friday, while Albidon had gained six cents to A$4.02 in afternoon trade on Thursday, as the major partner - African Energy - moved the project, which comprises the Njame and Gwabe deposits, into the Bankable Feasibility Study stage.
In an announcement on the AIM Friday, Albidon said marketing discussions for uranium sales contracts were already underway with interested parties and work was well advanced in environmental and community programmes for the project areas.
The pre-feasibility study pegged the project's size at 14.0 million tons. Uranium ore will be delivered to the leach pads at a rate of approximately 2.25 million tons per year to produce, on average, approximately 1.3 million pounds per year of U3O8 over an initial mine life of just over 5 years.
The study is based on an open pit mining operation initially targeting the Njame deposit, with mining and heap leaching expected to commence at the Gwabe site once Njame has been exhausted. Uranium recovery has been estimated at 85 to 90% for Njame and over 70% for Gwabe, where the presence of approximately 2% calcite in composite samples was reported.
"Comminution tests indicate that the ore is very soft and is not abrasive and is amenable to mining by continuous surface mining equipment at costs equal to or less than drill and blast," said Albidon's Chief Financial Officer, Nicholas Day, in an announcement to the AIM.
Capital costs were estimated at US$68 million for pre-production expenses to cover the construction leach pads, leach ponds, a processing plant, a packaging plant, first fills, power supply, and mining equipment, as well as an additional US$21 million in deferred costs.
"African Energy has estimated that operating costs will be in the range of US$30 to US$40 per pound recovered U3O8. Based on these operating cost estimates, the project has good returns at the study price of US$65 lb," said Day.
His company now has 60 days to decide whether it wishes to contribute to the Bankable Feasibility Study costs in proportion to its interest in the JV, he said.
Both joint venture partners say they believe that there is good potential for locating additional uranium resources that could be processed at the Njame facility through extensions to known mineralisation and from exploration in the Chirundu JV project and the nearby Kariba Valley JV Project which is currently owned 100% by Albidon, with AFR sole-funding expenditure to earn an initial 30% interest. |
