Definitive study shows Husab viability

06 April 2011

A definitive feasibility study (DFS) has confirmed that the Husab uranium project in Namibia can be viably developed to become one of the world's largest uranium mines.

According to project owner Extract Resources, the DFS has demonstrated the technical and economic viability of developing Husab, described as the world's fifth-largest uranium-only deposit. The study envisages mining of 15 million tonnes of ore per year from two separate open pits to feed a processing plant producing 15 million pounds U3O8 (5770 tU) per year.

Based on the current resource model, capital costs are estimated at $1.480 billion, which includes initial mine fleet, process plant and supporting infrastructure. Including pre-strip and other pre-production operating costs, the project cost is estimated at $1.659 billion. Production costs are estimated at $28.5 per pound U3O8, not including royalties, marketing and transport and cost escalation. With those considerations factored in, the operating costs rise to an estimated $32.0 per pound.

Based on maiden resource estimates, the mine could sustain such a rate of production for 16 years. However, Extract says it expects to define additional reserves enabling it to extend the mine life substantially beyond the current mine plan. Indeed, an updated resources estimate scheduled for release during the second quarter of 2011 is expected to do just that. The company has also embarked on a mine optimisation and resource extension program that includes possible process enhancements to increase recovery rates and will look at the potential for other potential opportunities, such as the on-site production of the sulphuric acid used in the leaching process.

Extract Resources CEO and managing director Jonathan Leslie described the study as an important milestone for the company. "The DFS results demonstrate that Husab is capable of being developed into one of the largest uranium mines in the world with a low-risk conventional open pit mine supported by a proven flow sheet," he said.

An application for a mining licence for Husab was lodged with Namibia's Minister of Mines and Energy in December 2010, and in January 2011 the Ministry of Environment and Tourism gave environmental approval for the mine. According to the DFS, "hot" commissioning would take place 33 months after the project is approved.

Extract recently announced that it was holding discussions with Rio Tinto over the possibility of jointly developing Husab along with the nearby Rössing uranium mine. China Guangdong Nuclear Power Corporation (CGNPC) has also been in discussions over a possible cash offer for Extract's 43% shareholder, Kalahari Minerals. While Extract says it is continuing with the partnership process, it says its cash balances of $86.5 million are expected to be enough to fund envisaged drilling, optimisation and initial development activities. It is also "reviewing its options" for financing a standalone development of Husab.


Researched and written 

by World Nuclear News