Full speed ahead for Etango early works

Early works completed safely, on-time and on-budget 

You may recall that following the receipt of the Etango Mining Licence in December 2023, we swiftly awarded two early works contracts to a Namibian contractor. These contracts were for the construction of an access road to the Etango site as well as a temporary water supply pipeline. I am pleased to report that both these workstreams have now been successfully completed, on time and on budget.

The water reservoir completed in July 2024 has a diameter of 11.7m and can hold up to 700m3 of water.

I would highlight that the delivery quality and outcomes here have been excellent. We have extended our thanks to our local Namibian partners, who have not only completed these two contracts without any safety incident but also produced a high-standard work promptly and efficiently (within a brisk eight months of contract award).

2-year bulk earth works contract awarded 

With the Etango access road and temporary water pipeline constructed, we have now placed the key bulk earth works contract. 

Bulk earth works are one of the crucial first steps in the construction of large-scale projects, where contractors utilise heavy machinery to perform precise excavation, grading and reshaping of terrain across the project site. These works directly facilitate full-scale construction, mining and facilities installation. I know this is a euphemism used quite often in this industry, but in this case, we really are laying the groundwork for our future project development.

This body of work is anticipated to take 24 months and is one of the cornerstone workstreams to keep us on schedule for the targeted commencement of operations and production of U3O8 during 2027.

We are currently tendering the power contract and have placed the order on a Namibian contractor for the construction of the internal access roads within the Etango site boundary.

Construction team formation 

We have commenced the first stage of detailed design works for Etango, with Wood PLC appointed as lead engineering consultant, working in conjunction with CREO (the Namibian technical owner’s team consultant). The current technical team working on the design is in the order of 70 people and growing.

Our Project Director, Jeff Pipe is overseeing the formation of the team from the Johannesburg office, where he is based. Assembling the right team is a crucial component of project success later down the line, and fortunately, a part of the project development process with which I am highly familiar given my professional history to date.  

The Wood PLC design team at work on the Detailed Design of our Etango Uranium Project in Namibia

Successful equity raising delivers assurance

Our capacity to progressively approve and fund the commencement of these staged works through H2 2024 (and beyond) was significantly enhanced via the two-tranche A$85 million equity placement we undertook during June.

While we are always cautious with respect to any decision to seek new equity, this funding injection offers Bannerman two key strategic advantages.

Firstly, it fully funds our early works programs and the ordering of key long lead items. This delivers us comfort on targeted timelines, but also attractive flexibility in how these programs and orders are phased.

Secondly, it provides Bannerman the financial stability that enables us to remain highly disciplined with respect to key external workstreams. As long-term fundamentals in the uranium market continue to drive in a positive direction, the art and practice of ‘Strategic Patience’ is as important as ever.

Looking through the noise

It has been an interesting period for uranium markets. We appear to be exiting a relatively brief but subdued period of activity in which many major market participants seem to have been figuratively holding their breath – watching and waiting, if you will.

Recently shaking up this ‘holding pattern’ of behaviour was last week’s announcement from Kazatomprom lowering its projected 2025 production volumes from 30,500 - 31,500 tU to between 25,000 and 26,500 tU (100% basis). While it states that it can comfortably meet its near-term contractual obligations, Kazatomprom’s existing inventories are rapidly depleting. This confluence of events will serve to exacerbate supply chain uncertainty and put increasing pressure on already tight spot and term uranium markets.

What is a factual reality is that current spot and (upper) term yellowcake prices are both now above US$80/lb. If you recall, this price was actually the upper-case scenario in our Etango Definitive Feasibility Study (released in December 2022).

Irrespective of short-term market fluctuations, this should deliver ready evidence that Etango is an industry-leading uranium mining and processing development that is shovel-ready and being rapidly advanced during the most exciting period for nuclear energy’s outlook in decades.

We are fully funded for our early works and key long lead orders, and strategically positioned to advance Etango towards targeted commencement of production at a highly opportune time in global nuclear and uranium markets.