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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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Botswana records first trade surplus since January

7th October 2021
Botswana-records-first-trade-surplus-

Botswana has recorded its first trade surplus for 2021 since the only one for the year in January.

The country’s exports for the month of July surpassed the value of imports, Statistics Botswana’s July International Merchandise Trade data reveals.

Released last Friday, the monthly trade digest reports a positive jump in the trade balance graph against the backdrop of a series of trade deficits in the preceding months since January this year.

According to the country’s significant data body, imports for the month were valued at P7.232 billion, reflecting a decline of 6.6 percent from the revised June 2021 value of P7.739 billion.

Total exports during the same month amounted to P7.605 billion, showing an increase of 6.1 percent over the revised June 2021 value of P7.170 billion.

A trade surplus of P373.2 million was recorded in July 2021. This follows a revised trade deficit of P568.7 million for June 2021.

For the total exports value of P7.605 billion, the Diamonds group accounted for 91.2 percent (P6.936 billion), followed by Machinery & Electrical Equipment and Salt & Soda Ash with 2.2 percent (P169.7 million) and 1.3 percent (P100.9 million) respectively.

Asia was the leading destination for Botswana exports, receiving 65.2 percent (P4.96 billion) of total exports during July 2021.

These exports mostly went to the UAE and India, having received 26.3 percent (P1. 99 billion) and 18.7 percent (P1.422 billion) of total exports, respectively. The top most exported commodity to the regional block was Diamonds.

Exports destined to the European Union amounted to P1.64 billion, accounting for 21.6 percent of total exports.

Belgium received almost all exports destined to the regional union, acquiring 21.5 percent (P1.6337 billion) of total exports during the reporting period.

The Diamonds group was the leading commodity group exported to the EU. The SACU region received exports valued at P790.7 million, representing 10.4 percent of total exports.

Diamonds and Salt & Soda Ash commodity groups accounted for 37.8 percent (P298.6 million) and 6.2 percent (P48.7 million) of total exports to the customs union.

South Africa received 9.8 percent (P745.0 million) of total exports during the month under review. The Diamonds group contributed 39.9 percent (P297.4 million) to all goods destined for the country.

 

In terms of imports, the SACU region contributed 62.7 percent (P4.534 billion) to total imports during July.

The topmost imported commodity groups from the SACU region were Fuel; Food, Beverages & Tobacco, and Machinery & Electrical Equipment with contributions of 33.3 percent (P1.510 billion), 17.4 percent (P789.4 million) and 12.7 percent (P576.7 million) to total imports from the region, respectively.

South Africa contributed 60.1 percent (P4.3497 billion) to total imports during July 2021.

Fuel accounted for 32.1 percent (P1.394 billion) of imports from that country. Food, Beverages & Tobacco contributed 17.7 percent (P772.0 million) to imports from South Africa.

Namibia contributed 2.0 percent (P141.1 million) to the overall imports during the period under review. Fuel was the main commodity imported from that country at 82.1 percent (P115.8 million).

During the months, imports representing 63.5 percent (P4.5904 billion) were transported into the country by Road.

Transportation of imports by Rail and Air accounted for 22.7 percent (P1.645 billion) and 13.8 percent (P996.2 million), respectively.

During the month, goods exported by Air amounted to P6, 999.2 million, accounting for 92.0 percent of total exports, while those leaving the country by Road were valued at P594.2 million (7.8 percent).

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Business

The 2021/2022 Stanford Seed Transformation Program Begins

7th October 2021

Founders from twenty companies have been accepted into the program from Botswana, Namibia, and South Africa

The 4th Cohort of the Stanford Seed Transformation Program – Southern Africa (STP), a collaboration between Stanford Graduate School of Business and De Beers Group commenced classes on 20 September 2021. According to Otsile Mabeo, Vice President Corporate Affairs, De Beers Global Sightholder Sales: “We are excited to confirm that 20 companies have been accepted into the 4th Seed Transformation Programme from Botswana, Namibia, and South Africa. The STP is an important part of the De Beers Group Building Forever sustainability strategy and demonstrates our commitment to the ‘Partnering for Thriving Communities’ pillar that aims at enhancing enterprise development in countries where we operate in the Southern African region”. Jeffrey Prickett, Global Director of Stanford Seed: “Business owners and their key management team members undertake a 12-month intensive leadership program that includes sessions on strategy and finance, business ethics, and design thinking, all taught by world-renowned Stanford faculty and local business practitioners. The program is exclusively for business owners and teams of for-profit companies or for-profit social enterprises with annual company revenues of US$300,000 – US$15million.” The programme will be delivered fully virtually to comply with COVID 19 protocols. Out of the 20 companies, 6 are from Botswana, 1 Namibia, and 13 South Africa. Since the partnership’s inception, De Beers Group and Stanford Seed have supported 74 companies, 89 founders/CEOs, and approximately 750 senior-level managers to undertake the program in Southern Africa.

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Minergy overcomes challenges – improves revenue and produces record breaking coal sales to date

7th October 2021
Minergy

Minergy, the coal mining and trading company with the Masama coal mine, this week released results for the year ended 30 June 2021. The company achieved revenue of P193 million (2020: P81 million) with significant improvement in sales volumes surpassing 415 000 tonnes sold for the year.

The performance was divided into two distinct periods with very different operating environments. The first eight-month period (July 2020 – February 2021), was negatively impacted by delayed funding, COVID-19 impacts and excessive rain; and the last four-month period (March – June 2021), was a more stable production environment moving toward nameplate capacity.

According to Minergy CEO, Morné du Plessis, production and sales initially recovered in July and August 2020 with the easing of COVID-19 restrictions and recoveries were further bolstered by the successful launch of the rail siding. Delays experienced in concluding the funding contributed to contractors limiting operations to manage arrears.

“However, the heavy rains we experienced from December 2020 through February 2021 flooded the mine pit making access difficult and impacting both production and sales. Fortunately, the rain subsided in March 2021, and we entered a more stable environment, with a positive impact on operations. Good recoveries in production and sales were experienced during the last four-month period of the year, with the mine moving closer toward a breakeven position.”

“Despite these operational constraints, including the effects of COVID-19 on logistics and manning of shifts, we expect to reach consistent nameplate capacity in the 2022 financial year,” du Plessis added.

FINANACIAL REVIEW

In addition to the revenue reported above, the company incurred costs of sales of P256 million (2020: P150 million) with operating costs of P23 million (2020: P31 million). This effectively resulted in an operating loss of P86 million (2020: P100 million). Finance costs of P51 million (2020: P17 million) were incurred, bringing the net loss before taxation to P136 million (2020: P117 million).

Du Plessis explains that the adverse conditions in the first eight-month period contributed to 86% of the gross loss, while the more stable four-month period alone contributed to 50% of total sales value, helping to decrease monthly gross losses, albeit below breakeven levels.

The company benefited from a strengthening in the South African Rand (“ZAR”) supporting higher back-on- mine sales prices.

“As announced, we’re pleased to have secured P125 million of additional convertible debt funding through the Minerals Development Company Botswana (Proprietary) Limited (“MDCB”). Minergy remains grateful for this support.”

He added that the first tranche of additional funding provided by the MDCB had been received in December 2020, which allowed Minergy to settle the majority of the contractor’s arrears and allowed their teams to be remobilised. The second and final tranche was paid post the financial year-end and will allow the business to reach nameplate capacity in the new financial year.”

COAL SALES AND MINE PERFORMANCE

Sales volumes increased by 110%, supported by increased sales in Botswana and internationally in South Africa and Namibia. Sales for June 2021 exceeded 56 000 tonnes, a record since the inception of the mine, with pricing increasing late in the financial year on the back of buoyant international prices and a strengthening ZAR.

Minergy also concluded a further 12-month off-take agreement to the existing off-take agreement, with a further agreement finalised post year end.

Overburden moved during the reporting period increased by 86% and extracted coal by 50%. Coal mined in June 2021 alone exceeded 100 000 tonnes. “This is a good performance considering the challenges faced such as sacrificing pre-stripping activities for a period to manage arrears, excessive rain and COVID-19,” du Plessis indicated.

“The wash plant was initially starved of coal due to the factors noted already. Despite this, overall plant throughput performance was 37% higher than 2020. Consistent output was supported by the completion of the Stage 2 rigid crushing section as well as the water saving dewatering screen with filter press contributing to a reduction in water usage of 60% per tonne of coal. A record throughput of more than 84 000 tonnes was achieved in March 2021 and this consistency has been maintained.”

OUTLOOK

According to du Plessis, the completion of Stage 4 of the Processing Plant, the rigid screening and stock handling section, remains a key optimisation step, which has associated benefits. “The completion was unfortunately delayed by a southern African wide shortage of structural steel but was commissioned post year-end.”

Minergy expects the positive momentum in international coal pricing for southern African coal to remain in place. Higher coal prices have resulted in coal being withdrawn from the inland market in favour of lucrative international markets. Du Plessis added that the regional market is currently under- supplied with sized coal, which supports higher pricing and new customer opportunities for Minergy.

“Our objective for the 2022 financial year is to achieve nameplate capacity by completing final ramp-up of operations. This will enable the company to generate sufficient cash flow to stabilise the business at breakeven or better. The bullish coal market is also providing support. COVID-19 will still be closely managed, and we look forward to the lifting of the State of Emergency, as announced, and trust that vaccination programmes will achieve herd immunity in Botswana during the next 12 months.”

Du Plessis expressed his excitement on prospects stating that, “The Eskom due diligence process is continuing, and we are hopeful of receiving feedback during the current financial year. In addition to this opportunity, Minergy is also investigating participation in the request by the Government of Botswana to provide a 300MW power station for which the company has been shortlisted.”

The approved process to issue shares for cash is showing positive leads and he concluded by saying that a listing in London is still being investigated.

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