Cost estimate for Rössing South

04 August 2009

Australia's Extract Resources has issued a preliminary capital and operating cost estimate for developing the Rössing South uranium project in Namibia. It shows that Rössing South could support a long-life, low-cost mine.



Rossing South deposit (Extract)
Rössing South (Image: Extract)

The company said that preliminary cost estimates on the granite hosted, uranium mineralization at Rössing South indicates that the project can support a viable open pit mining operation developed to feed a 15 million tonne per year agitated tank sulphuric acid leach processing plant. Annual production has been estimated at 14.8 million pounds U3O8 (5700 tU) with capital costs of $704 million and operating costs of $23.60 per pound U3O8.


Peter McIntyre, Extract's managing director, said, "The preliminary cost estimates report indicates a conventional open pit mining operation with an agitated tank leach process plant is expected to support a profitable and sustainable mining operation for over 20 years."


He added, "This report represents our base case study and we are continuing with our metallurgical test work and engineering optimization that will consider other options including a heap-leaching component."


Extract said that conventional open-pit bulk mining utilising contract mining services and owner operator are both being considered.


In January, Extract announced for Zone 1 of its Rössing South deposit - about seven kilometres south of the Rio Tinto-controlled Rössing mine - an inferred resource of 41,600 tonnes of uranium at an average grade of 0.0365%. These figures are compliant with the JORC and NI 43-101 standards.


However, in July the company upgraded its estimate of indicated and inferred resource for Zone 1 by 34% to 55,900 tU at an average grade of 0.0381%.  Inferred resources in Zone 2 are 47,000 tU averaging 0.046%U, making 103,000 tU averaging 0.041%U proven so far.  These figures are also JORC and NI 43-101 compliant.


The currently defined inferred and indicated resource at Rössing South formed the basis of the preliminary capital and operating cost estimate. Rössing South is part of the company's Husab project, which includes the Ida Dome further south.


McIntyre said, "The availability of infrastructure combined with the confirmed resource and the outstanding exploration potential still to be tested on the Husab project, should ensure a long and successful mining operation centred on Rössing South."


Extract launched the Rössing South feasibility study at the beginning of April. The study will be completed in two parts, commencing with a pre-feasibility study, followed by a definitive feasibility study. The company said that once the definitive feasibility study is completed the information would be sufficient to enable Extract to source finance for developing the project.


Mark Hohnen, chairman of Kalahari Minerals which holds a 40% stake in Extract, noted: "Namibia already hosts other world class uranium projects including Rio Tinto's Rössing and Paladin's Langer Heinrich uranium mines, located either side of Extract's project, therefore providing good infrastructure and knowledge of the sector, which would greatly assist in the development of Rössing South."


Extract said that it "now looks forward to working closely with the Namibian government to obtain the necessary permits to enable the mine to be developed in a timely manner."


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