Omahola Project - December 2011

Conceptually the Omahola project comprises a processing plant located close to the Ongolo Alaskite deposit treating a blend of primary ore from the Ongolo and MS7 Alaskite deposits and the INCA uraniferous magnetite deposit (Figure 1).

The Omahola Project’s Resource base, the majority of which will be mineable by open pit methods, totals 40.7 Mt at an average grade of 413 ppm U₃O₈ for 37 Mlbs U₃O₈ (Table 1).  Resources at both MS7 and Ongolo are increasing through ongoing exploration success  which is expected to continue in 2012.  High level pit optimisation exercises on Ongolo and MS7 commenced at the end of 2011, with the objective of enhancing the effectiveness of the next phase of targeted exploration drilling (Figure 2). 

A Pre-Feasibility Study (PFS) commenced in 2010 based on the INCA deposit with supplemental feed from the lower grade Tubas Red Sand (TRS) deposit.  Interim results were released early in 2011 demonstrating the potential for an operation with:

• A 12-year mine life at a production rate of 2.2 Mlbs U₃O₈ per annum.
• Competitive capital costs of less than US$340 million, including a 10% contingency.
• Conventional processing with sulphuric acid leach and solvent extraction, followed by precipitation, drying and yellowcake packaging.
• Operating costs below US$26/lb U₃O₈.

Subsequently, additional testwork was commissioned on the INCA deposit to more accurately estimate the acid consuming carbonate content of the various ore lenses that comprise the deposit. (These tests are important as carbonate content has a major impact on process plant sulphuric acid consumption, a major operating cost factor.)

With the rapid increase in hard rock resources associated with the discovery of the Ongolo and MS7 deposits the low-grade TRS deposit is now seen as a stand-alone operation utilising Schauenburg technology (ASX 6 September 2011) and hence is no longer included in the Omahola Project.

An approved scoping Environmental Impact Assessment (EIA) is already in place for the INCA deposit and the final EIA report and draft Environmental Management Plan was submitted to the relevant Namibian government departments in November 2011.  A Mining Licence application has also been submitted to the Namibian Ministry of Mines and Energy which, if awarded, may enable earlier development work on the project.

Next Steps

Environmental Impact Assessment of the Ongolo-MS7 area will commence in 2012 once there has been sufficient resource definition and the likely location of the processing plant has been selected, limited sterilisation drilling has already been conducted.

It is envisaged that the pit optimisation exercises on Ongolo and MS7 will enable the company to increase the project resource base with the objective of achieving a minimum of 40 Mlbs from primary, open pit Alaskite mineralisation. (See Table 2 for the current project descriptions.) At that point, the project should have sufficient critical mass to enable a value engineering review before re-commencement of the Pre-Feasibility Study, focussing on the Alaskites. An aggressive feasibility study and development schedule, assuming project viability in the context of improving market conditions, could result in first production in 2015.