(21 February 2011)

News / Announcements


Extract Resources Says Husab Uranium Mine in Namibia to Cost $1.7b

This week's Newsletter starts with a look at mining exploration company Extract Resources' proposed $1.7 billion uranium venture in Namibia - a move towards stimulating activity in the industry after Japan's nuclear crisis. Extract Resources, an explorer proposing a $1.7 billion uranium venture in Namibia, expects to overcome difficulties confronting the industry after Japan's nuclear crisis and successfully fund the mine. Extract's Husab uranium deposit will be developed because of its "strategic importance," Chief Executive Officer Jonathan Leslie said today on a conference call with reporters. We now shift attention to news that grabbed headlines in the South African mining industry.

South Africa
De Beers is courting controversy with the proposed sale of its 86-year-old Namaqualand diamond mine after the company applied to the state to alter the mine's closure costs and stands accused of failing to consult transparently with communities around the mine sites. Mining company Coal of Africa (CoAL) announced Monday that the integrated water use licence for the company's Vele Colliery has been granted by the South African Department of Water Affairs. The Vele coking coal project is located in the Limpopo Province. Platinum Group Metals Ltd. on Monday announced the receipt of consent to commence underground development for the Project 1 Platinum Mine. A positive record of decision for the Company's detailed underground development plans and environmental management program.

The following news snippets cover mining news from across the rest of the African continent.

Botswana Diamonds has begun bulk sampling the BK5 diamondiferous kimberlite in Orapa, Botswana, to estimate value per tonne in the ground. A total of 5,500 tonnes will be collected from BK5 and processed through a refurbished ten tonne-an-hour plant.

The World Bank Board of Directors on March 31 approved a $25million credit to support the Malawi Government improve management and governance of its nascent mining sector. The funds will be provided through the Mining Governance and Growth Support Project.

Pan African Resources, the African focused precious metals producer, has been awarded a mining licence on its Manica exploration project by the Mozambican government. The licence, which was converted from a prospecting licence, grants Pan African the opportunity to move the Manica Project to development stage.

A high-powered African Diamond Producers Association delegation comprising Kimberley Process Certification Scheme chairperson Mr Martin Kabuelulu is in Zimbabwe to get firsthand information on diamond mining in Marange. The visit is in preparation for an ADPA Heads of State Summit to principally deal with the Zimbabwe issue.

Sierra Leone
UK-based Sable Mining Africa has acquired an 80 per cent stake in Sierra Leone's Red Rock Mining, it has been announced. Red Rock holds a 50-year lease at the Bagla Hills iron ore deposit in the south-east of Sierra Leone. Bagla Hills lies about 52 kilometres from Kenema, and forms a continuation of the Western Cluster iron ore deposits across the border with Liberia.

Rio Tinto - Extract - Rössing media release


Extract Resources media release


AFR Online - Extract confirms talks with Rio on uranium
PUBLISHED: 21 Feb 2011 09:13:35

Angela Macdonald-Smith

Extract Resources, holder of the huge Husab uranium deposit in Namibia, on Monday confirmed discussions with Rio Tinto on the potential joint development of the resource with Rio's neighbouring Rossing deposit.

Rio, a minority shareholder in Extract, has long been seen as a natural partner for Husab given the proximity of Husab to the existing Rossing processing facilities and the weighty capital requirements to develop the resource, seen at more than $US1 billion.

Extract confirmed also that it's in talks with its biggest shareholder Kalahari Minerals “to explore various options that might simplify the Extract/Kalahari shareholding structure.” The discussions were flagged by The Australian Financial Review in today's Street Talk column.

Rio Tinto chief executive Tom Albanese has been voicing his optimism recently about the outlook for uranium and the company is known to be focused on potential opportunities at Rossing rather than at its majority controlled Energy Resources of Australia unit which runs the Ranger mine in the Northern Territory.

But while speculation has focused on Rio potentially bidding for Extract, Monday's announcement seems to back the view that the two are more likely to form a joint venture to develop Husab, which Extract wants to bring into production by 2014 at a rate of 15 million pounds per year or uranium oxide.

The surge in the uranium spot price, to over $US70 per pound from about $US40 mid-2010, has increased optimism about the potential for the development of new mines.

Extract also announced Monday that it will again seek to adjourn a general meeting of shareholders at which investors were due to vote on a placement of 7.3 million shares to Kalahari Minerals to raise $60.9 million.

The placement would increase the stake in Extract held by London-listed Kalahari to about 43 per cent. Extract said the adjournment, which would be for eight days to March 1, was in shareholders' interests given the partnership talks.