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Increase in global uranium price to boost Letlhakane Uranium Mine

As the world moves steadily away from fossil fuels for electrical power production and adopts clean nuclear as the best alternative, we will see the demand for large uranium deposits with significant upside in production such as the A-Cap Resources owned Letlhakane uranium project become an extremely important component of the nuclear builds.

Australian mining company, A-Cap Resources is excited about the large increase of new, better and upgraded uranium resource estimates from its continuing prospecting work at Letlhakane in the Central District, following the completion of a prospecting technical study completed during this year, the company CEO, Paul Thompson said in a statement.


A-Cap Resources is becoming well positioned in this important global demand. The company is reportedly now in a strong position to capitalize on a predicted increase in uranium price going forward as well as completing trial pits and pilot plant work as part of a bankable feasibility study to be completed in the first quarter of 2017. Construction of the mine is expected to commence in the first quarter of 2018.


An important catalyst aiding the expected increase in the uranium price increase is threefold, says A-Cap board chairman, Angang Shen. First, Japan is restoring nuclear reactors after the 2011 accident at Fukushima. Japan alone has an annual usage of 20 million pounds of uranium in its 54 nuclear reactors. Secondly, 66 new nuclear reactors are under construction worldwide, with 50% in Asia. Each reactor will use around 400 000 lbs of uranium per year.

Third, is the anticipated Chinese nuclear build offshore where China has also become the world leader in nuclear plant design and construction and is currently constructing or engaged in nuclear reactor supply contracts in South Africa, Kenya and the UK, with more expected later.

China accounts for two-thirds of all reactors under construction, while South Korea, Taiwan, Pakistan, India and Japan are building new ones. Vietnam, North Korea, Bangladesh, Indonesia and Thailand are all planning new ones.

It appears environmental concerns about uranium and its dangers involves a lot of misinformation because by comparison, coal burning is a 1800 technology that produces a lot of air pollution per kilogram of thermal coal  for just 30 mega joules of energy when burnt . Yet you get 500 gigajoules of energy per kilo of uranium, which is over 10 000 more efficacious as a fuel and can be moved in tomorrow if the political will exist, says former A-Cap Resources CEO Andrew Tanks.   

According to Shen, the Letlhakane uranium deposit is shallow, soft and amenable to inexpensive open pit mining using a mix of conventional and surface miners. Detailed studies have been completed to understand the effect of utilizing surface miners on the resource and understand the costs and productivity.

Extensive metallurgical test work has demonstrated excellent recoveries from acid leaching and supports a low cost heap leach processing route using solvent extraction to recover uranium. A drilling programme was completed in September 2014 focusing on shallow high-grade zones earmarked for early mining in the project life.

This drilling was designed to test the continuity and mine scale variability of mineralization in three main project areas: Kraken, Gorgon and Serule West, and to provide data for further resource modeling and mine planning. This drilling yielded excellent results and confirmed the presence and continuity of high grade mineralization within these areas.

Further metallurgical test work was completed to optimize the process design and provide geotechnical; geochemical and hydrological data for studies on heaps and waste products. Column leach tests of 2 and 4 meters were conducted at ANSTO labs in NSW, providing the basis for the Projects recoveries and processing costs.

On the other hand, the coal resources on our Bolau and Mea coal tenements add an extra dimension to A-Cap activities in Botswana. A maiden resource was announced at Bolau of sufficient tonnage to support a thermal power venture.

Discussions with third parties are currently underway to decide on the best way to progress these projects. The resource upgrade was completed using localized uniform conditioning (LUC) which takes into account mining and upgrade control selectively.

The drilling programme targeted the early optimized shekels which typically represent the earliest production potential and had highlighted some of the better uranium grade, which would be exploited early in the potential production.

The result of the drilling programme is said, increased confidence in these early production areas within Letlhakane, namely, Kraken, Gorgon South and Serule West. The total areas concerned covers 14 km long and 11 km wide and is divided into the aforementioned main prospecting areas.

The outcomes of the technical study that was disclosed to the Australian Stock Exchange (ASX) on the 12th September 2015, utilized the findings of the 2012 mineral technical resource assessment and findings to determine the results.

“Following the assessment and review, the 2013 resource estimate was found to be unsuitable for mining optimization studies”.  In comparison, new prospecting assessment method LUC revealed “a notable grade increase over prior resource estimations due to the incorporation of mining selectivity and the assessment of recoverable grade.

“This is a positive outcome for the economics of the Project and will be used as the basis of future mine schedules, optimizations and financial modeling”, says Thompson. The resources contain more tones and more grades in recoverable proportion.

This year has been one of the most unpredictable in the resource sector in recent memory, where not one or two commodities have dropped in value but almost all have severely declined, says Shen. Most of the company’s important work has been completed at the Letlhakane Unranium Project. An incredible amount of technical work has been completed on the project which has culminated in the submission to the government of Botswana of a mining license application in August 2015.

The company’s planned activities for the 2016 financial year will focus on planning, appraisals and the development of the Letlhakane Uranium Project.  A-Cap has successfully secured the funding necessary to complete the feasibility work required for a Mining License Application for the Letlhakane Uranium Project through the financial support of its shareholders.

Following the completion of the feasibility work, the Mining License application was submitted to the Botswana Department of Mines in August 2015, consistent with the Company’s strategy of preparing the project for early development and production so that we can take full advantage of an expected recovery in the uranium market and the forecast increase in the price of uranium.

“We have been successful in securing the funding necessary to complete the feasibility work required for a mining license application for our Letlhakane Uranium Project”. The current price of uranium has been flat, but A-Cap fully expects the Uranium market to turn.

With Japan restarting their nuclear program, commencing with the Sendai No. 1 Reactor, coupled with an additional 66 new nuclear.  A-Cap has positioned itself to have the project ready to take advantage of a forecast supply shortage and a rising uranium price.

The technical study required for the Mining License application comprehensively incorporated all of the work completed to date, providing a strong framework for the development of the project, based on shallow open pit mining and heap leach processing to produce up to 3.75 million pounds of U3O8 per annum over an 18 year plus mine life.

The results of the study indicate encouraging project economics in a rising uranium market and highlight a number of distinct advantages with competitive CAPEX and OPEX cost estimates.

The Environmental and Social Impact Assessment (ESIA) was completed and submitted to the Department of Environmental Affairs (DEA) in May 2015 in line with the Botswana Government requirements. All major infrastructures is in place with the project located adjacent to a main highway, railway line, national power grid with water supply already identified and permitted, and enabling capital costs to be kept to a minimum.

Shen says the Letlhakane Uranium Project is one of the world’s largest undeveloped Uranium Deposits. The Project lies adjacent to Botswana’s main North-South infrastructure corridor that includes a sealed all-weather highway, railway line and the national power grid, all of which make significant contributions to keeping the capital cost of future developments low.

In August 2015, A-Cap submitted the Mining License application for PL 45/2004 (Letlhakane) to the Botswana Department of Mines. The application was based on the results of a technical study and financial modeling.

The technical study was based on shallow open pit mining and heap leach processing to produce up to 3.75 million pounds of uranium per annum over a mine life of 18 years, incorporating the most up to date metallurgical results and process route, optimized mineral resources, mining, capital and operating costs developed by feasibility specialists in Australia and internationally.

The technical study confirms that the Project has the right mix of a good resource, low capital and operating costs and is well positioned to be taken into early production, reaping the benefits of projected shortfalls in supply in the uranium market and forecast rising uranium prices.

The outcomes of the technical study released to the market in September 2015 highlighted the following: Positive economics based on forecast uranium average contract price Initial construction CAPEX of US$351 million Initial working capital of US$40 million, Pre-tax NPV of US$383 million at a discount rate of 8% and IRR of 29% Operating costs of US$35/lb U3O8 over first 5 years, approximately $40/lb U3O8.
 

The Technical Study results and production targets reflected in this annual report are preliminary in nature as conclusions are drawn partly from indicated mineral resources and partly from inferred mineral resources. The Technical Study is based on lower level technical and economic assessments and is insufficient to support estimation of ore reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the Technical Study will be realized.

There is a low level of geological confidence associated with inferred mineral resources and there is no certainty that further exploration work will result in the determination of indicated mineral resources or that the production target itself will be realized.

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MD, Board in BBS battle for supremacy

12th April 2021

Botswana Stock Exchange (BSE) moved swiftly this week to suspend BBS Limited from trading its securities following a brawl between Board of Directors and Managing Director, Pius Molefe, which led to corporate governance crisis at the organisation.

In an interesting series of events that unfolded this week, incumbent board Chairperson, Pelani Siwawa-Ndai moved to expel Molefe together with board Secretary, Sipho Showa, who also doubles up as Head of Marketing and Communications.  It is reported that Siwawa-Ndai in her capacity as the board Chairperson wrote letters of dismissals to Molefe and Showa.

Following receipt of letters, the duo sought and was furnished with legal opinion from Armstrong Attorneys advising them that their dismissals were unlawful hence they were told to continue to report to work and carry out their duties.

Documents seen by BusinessPost articulate that in the meeting which was held on the 1st of April, the five outgoing board members, unlawfully took resolutions to extend their contracts by a further 90 days after April 30 2021 as they face tough competition from five other candidates who had expressed interest to run for the elections.

Moreover, at the said meeting, management explained that neither management nor the board have the authority to decline nominations submitted by shareholders or the interested parties which is in line with Companies Act and also BBS Limited constitution.

Molefe also revealed that as management they cautioned the board that it was conflicted and it would be improper for it to influence the election process as it seems they intended to do so.
“Nonetheless, in a totally unprecedented move in the history of BBSL, the board then collectively passed the unlawful resolutions below. Leading to the illegitimate decisions, the board had brazenly directed that its discussions on the Board elections should not be recorded totally violating sound corporate governance,” reads the statement released by management this week.

When giving their legal advice, Armstrong Attorneys noted that notice for the AGM should state individuals proposed to be elected to the board and directors have no legal authority to prevent the process.

Armstrong Attorneys also noted that, “due process” cited by board members are simply to ensure that the five retiring Directors avoid competition from interested candidates to be appointed to the BBS Limited board.  The law firm further opined that the resolution of the 90 day extension of term of the five directors pending re-election or election was unlawful.

Molefe expressed with regret that BBS has been suspended from trading by BSE until the current matter has been resolved. “I am concerned by this development and other potentially harmful actions on the business. As management, we are engaging with stakeholders to mitigate any negative impact on BBS Limited,” expressed a distressed Molefe.

He assured shareholders and the rest of Management that they are working very hard to ensure that the issues are being dealt with in a mature manner.  BBS which hopes to become the first indigenous commercial bank has seen its shares halted barely four months after BSE lifted the trading suspension of shares for BBS following submission of their published 2019 audited financial statements.

According to Chief Executive Officer (CEO) of the local bourse, Thapelo Tsheole said the halting of shares of BBSL is to maintain fair, efficient and orderly securities trading environment. “The securities have been suspended to allow BBS to provide clarity to the market concerning the recent allegations which have been brought to the attention of the BSE relating to the company’s Board of Directors and senior management,” said Tsheole.

Meanwhile in their audited financial statements for the year ended 31 December 2020, BBS recorded a loss of P14.6 million as at 31 December 2020 compared to the loss of P35.7 million for the comparative year ended 31 December 2019. According to Molefe the year under review was the most challenging for the bank, its shareholders and customers endured the difficult economic environment and the negative impact of the coronavirus.

He revealed that as the bank, they were forced to put in place several measures to ensure that the business withstands the impact of coronavirus and also to cushion mortgage customers from the effects of the pandemic. “Since April 2020 up to the end of December 2020, BBS assisted 555 mortgage customers with a payment holiday,’’ he said.

This is the bank whose total balance sheet declined by 12 percent from P4, 626 billion for the year ended. 31 December 2019 to P4, 088 billion as at 31 December 2020. As if things were not bad enough, total savings and deposits at the bank declined by 14 percent from a balance of P2, 885 billion as at 31 December 2019 to P2, 494 billion as at 31 December 2020.

On a much brighter side, BBSL mortgage loans and advances improved from P3, 401 billion to P3.408 billion with impairment allowance significantly improving to P78, 648 million from P102, 532 million for the year under review, representing a positive variance of 23 percent. BBS maintained a strong capital base with capital adequacy ratios of 26.32% for the year ended 31 December 2020.

Molefe was optimistic and anticipated a positive outcome during the implementation of the new BBS corporate strategy, whose main drive is commercialization of operations, which is in full force.
“It will be spurred on by the positive results we have achieved for the year ended 31 December 2020, and our planned submission of our banking license application to Bank of Botswana which we anticipate to operate as a commercial bank in the third quarter of 2021,” he alluded.

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Mphathi promises people centred, environmentally sensitive new BCL

12th April 2021
CEO of Premium Nickel Resources Botswana: Montwedi Mphathi

Chief Executive Officer (CEO) of Premium Nickel Resources Botswana (PNRB), Montwedi Mphathi, has said his company will resuscitate the formerly owned BCL assets and deliver a new, sustainable and cutting edge mining operation.

The new mine which will leverage on modern and next generation technology, will be environmentally sensitive and cognisant of the needs of its people and that of the communities around the area of influence.

In a statement last week, Premium Nickel Resources Botswana and its parent company, the Canadian headquartered Premium Nickel Resources announced that they have now completed the Exclusivity Memorandum of Understanding (MOU) with the Liquidator.

The MOU will govern a six-month exclusivity period to complete its due diligence and related purchase agreements on the Botswana nickel-copper-cobalt (Ni-Cu-Co) assets formerly operated by BCL Limited (BCL), that are currently in liquidation.

On February 10, 2021, Lefoko Moagi, the Minister of Mineral Resources, Green Technology and Energy Security of Botswana, affirmed in Parliament a press release by the Liquidator for the BCL Group of Companies, stating that PNR was selected as the preferred bidder to acquire assets formerly owned by BCL.

“This is encouraging for the company and for Botswana. Our ambition in this new project dubbed “Tsholofelo” is to redevelop the former BCL assets into a modern, environmentally sensitive, efficient NI-Cu-Co-water producer where sustainability and the people are at the forefront of the decisions we make,” said Mphathi in a statement last Thursday.

“We also understand that no matter how successful we are at building the “New BCL” , our success will only be measured at our ability to create local wealth , skills and support the continued transition of local economy to a longer term sustainable base.”

The next step during the exclusivity period will be the completion of the definitive agreement. Simultaneous to this the PNRB will be conducting additional investigative work on site to further its understanding of the potential of these assets.

Specifically the company will complete an environmental assessment, a metallurgical study, a review of legal and social responsibilities, a review of the mine closure and rehabilitation plans and an on-site inspection of the legacy mining infrastructure and equipment that has been under care and maintenance.

Mphathi said they continue to monitor the global Covid-19 developments noting that they are committed to working with health and safety authorities as a priority and in full respect of all government and local Covid-19 protocol requirements. PNRB has developed Covid-19 travel, living and working protocols in anticipation of moving forward to on site due diligence.

“We will integrate these protocols with the currently applicable protocols of Ministry of Health & Wellness as well as District Health Management Team ( DHMT) and surrounding communities,” reads a statement released by the Gaborone based Premium Nickel Resources team.

PNRB is looking to become a catalyst in participating and building a strong economy for Botswana, with a purpose where respect and trust are core to every single step that will be taken. “Our success will mean following international best-in-class practices for the protection of Botswana’s environment and the focus on its people, building partnerships and earning respect, through cooperation and collaboration,” explains PNRB on its website.

“We are committed to Governance through transparent accountability and open communication within our team and with all our stakeholders.” Mphathi, a former BCL Executive, is widely celebrated for achieving unprecedented profitability at the mine during his tenure as General Manager.

The Serowe-born mining guru obtained a Diploma in Mining Technology from Haileybury School of Mines in Canada. He later obtained a B.Eng. Mining degree from the Technical University of Nova Scotia. Mphathi went on to City University in London, UK and obtained a M.Sc. in Industrial and Administrative Sciences.

Before ascending to the top country managerial role of Premium Nickel Resources. Mphathi was General Manager of Botswana Ash (Botash), Southern Africa’s leading salt and soda ash producer.
He was at some point linked to Debswana top post, which is still to date not substantively filled following the death of Managing Director, Albert Milton, in August 2019.

With Mphathi out of the race and now leading the rebuilding of his former employer, the top post at De Beers- Botswana joint venture is likely to be filled by current acting Managing Director Lynette Armstrong, a seasoned finance executive with unparalleled experience in the extractive industry.

“We are happy to hear that former General Manager of BCL, Mr Montwedi Mphathi, has a relationship with the new Company that intends to resuscitate the mine, he is an experienced Mining Executive who knows BCL better, we want the mine to be brought back to life so that our people can be employed ” said Dithapelo Keorapetse Member of Parliament for Selibe Phikwe West recently in Parliament.

BCL was liquidated in October 2016 following a series of losses and government bailout occasioned by low Copper prices and allegedly poor Investment decisions and maladministration. Recently PNR CEO, Keith Morrison said his team of seasoned experts both from Canada and Botswana are committed to resuscitate the BCL assets and deliver a high performance mining operation.

“The World, Botswana and the mining industry have changed dramatically since mining first started at the former BCL assets in the early 1970s. The nickel-copper-cobalt resources remaining at these mines are now critical metals, required for the continued development of a decarbonized and electrified global economy,” he said.

Morrison added: “As we move forward, it is our goal to demonstrate the potential economics of re-developing a combination of the former BCL assets to produce Ni-Cu-Co and water in a manner that is inclusive of modern environmental, social and corporate governance responsibilities.”

He explained that to attain this, extensive upgrades to infrastructure will be required with an emphasis on safety, sustainability and the application of new technologies to minimize the environmental impact and total carbon footprint for the new operations.

“Our team remains committed to working with the local communities and all of the stakeholders throughout this period and we encourage anyone with questions or feedback to reach out to us directly,” he noted.

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Lucara extends sales deal with Belgian diamond cutter

12th April 2021
Lucara extends HB Antwerp’s contract Signum technologies

Lucara Diamond Corporation, the Canadian 100% owners of iconic Karowe mine, this week announced the extension of its supply deal with Belgian diamond midstream giant HB Antwerp.

The definitive supply agreement is in respect of all diamonds produced in excess. of 10.8 carats in size from its rare gem producing Karowe diamond mine located in the Boteti district of Botswana.
Large, high value diamonds in excess of 10.8 carats in size account for approximately 70% of Lucara’s annual revenue.

Though the Karowe mine has remained fully operational throughout the COVID-19 pandemic, Lucara made a deliberate decision not to tender any of its +10.8 carat inventory after early March 2020 amidst the uncertainty caused by the global crisis.

Under the terms of this novel supply agreement with HB, extended to December 2022, the purchase price paid for each +10.8 carat rough diamond is based on the estimated polished outcome, determined through state of the art scanning and planning technology, with a true up paid on actual achieved polished sales thereafter, less a fee and the cost of manufacturing.

“Lucara is beginning to see the benefits of this strategy in accessing a broader marketplace and delivering regular cash flow based on final polished sales,” said Lucara CEO, Eira Thomas on Wednesday.

“We believe these early results warrant an extension of the arrangement for at least 24 months to determine if superior pricing and market stability for our large, high-value diamonds can be sustained longer term.”

The Canadian junior miner initiated a supply agreement with HB for large stones from its Botswana Karowe mine in July 2020, after pausing its tenders shortly after the Covid-19 pandemic began.
The deal enables Lucara to sell the rough diamonds to HB at a price based on an estimate of the polished outcome, which the companies determine using diamond scanning and planning technology.
Once HB sells the goods, it adjusts the price that Lucara receives based on the actual selling price of the polished, minus a fee and manufacturing costs.

The extended supply deal will follow the same payment terms as the initial agreement, and will be in effect through to December 2022. Lucara said in a statement this week that the agreement also provides increased tax revenue and beneficiation opportunities for the government of Botswana, and creates a streamlined supply chain for Karowe’s rough.

“More than a supply agreement, this collaboration structurally embeds a new transparent and sustainable way of working in the diamond-value chain,” said HB CEO, Oded Mansori.
“For the first time, different partners of the value chain are fully aligned, sharing data and information throughout the process from mine to consumer.”

Mansori added: “We are truly proud with this innovative and straightforward collaboration that has proven itself through the volatile and uncertain reality of 2020. We are confident to achieve even better results during the term of this new contract and demonstrate the power of a true partnership.”

Lucara, which early this year secured extension of Karowe mining license to 2040, announced over P2.4 billion funding for Karowe underground mining expansion project a fortnight ago. The Vancouver headquartered top large diamond producer says this supply agreement deal extension with HB will bring about regular cash flow for Lucara using polished pricing mechanism. Furthermore, the company says the deal has potential revenue upside, particularly suited for Lucara’s large, exceptional diamonds.

In the main, Botswana will benefit increased tax revenue and additional beneficiation opportunities for the Government and communities around Karowe mine. A streamlined supply chain that achieves alignment between Lucara and HB to maximize the value of each +10.8 carat diamond produced at Karowe.

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