Tuesday, September 8, 2009

African Energy looking to develop Zambia uranium project

By: Esmarie Swanepoel, 4th September 2009

PERTH (miningweekly.com) - Australian uranium explorer African Energy Resources on Friday reported that it could bring its Chirundu uranium exploration project, in Zambia, into production within a year's time, once construction has started.

MD Frazer Tabeart said that explorer was currently undertaking its feasibility study and was awaiting the results of its mining licence application. It was also updating its environmental plan for the Chirundu project. Once this has been completed, the environmental plan would be handed to the relevant authorities.

Tabeart said at the African Downunder conference that the Chirundu project had a measured and indicated resource of around 7,4-million pounds of uranium, which would support an initial life-of-mine of between five and six years. However, Tabeart noted that the company was hoping to increase the life-of-mine to ten years, and as such, would undertake further exploration activities to increase the resource base.

Under the current resource base, the Chirundu mine would have the capacity to produce between 1,2-million and 1,4-million pounds of uranium a year from an openpit design.

The Chirundu project consisted of two deposits, namely the Njame and the Gwabe project. Tabeart noted that the Njame deposit would be developed first, and would consist of an openpit mine and a processing plant. An initial cash cost of $70-million would be needed to develop the mine, with operating costs averaging between $22/lb and $25/lb.

Tabeart noted that a further $25-million would be sourced from cash flows to build on the Gwabe deposit at Chirundu. The ore from this openpit operation would be trucked to the Njame processing facility in order to focus spend on one project.

By trucking the ore to the Njame site, African Energy Resources would have the opportunity to use the same transport methods for any other possible uranium deposits that could be identified by the exploration programme.

Tabeart stated that the company would now concentrate on a follow-up exploration project within trucking distance of its Chirundu site, as well as its other joint-venture site.