Bannerman Energy Limited has announced a revised estimate for the pre-production capital costs for its Etango-8 uranium project in Namibia, reflecting an 11.3% increase from the previous estimate, this represents an increase of US$36 million (N$673 million).
The latest control budget estimate (CBE) has set pre-production costs at US$353.5 million (N$6.6 billion), up from US$317.5 million (N$5.9 billion) in the 2022 Definitive Feasibility Study (DFS).
“The transition from DFS to CBE has provided us with a more detailed and accurate cost outlook, ensuring that our project remains robust and viable despite the cost adjustments,” said Bannerman Executive Chairman Brandon Munro.
The increase includes US$21.6 million (N$404 million) due to design improvements such as increased freshwater storage, a redesigned secondary crusher circuit, and a new ripios disposal system.
Munro said these enhancements deliver cost efficiencies and reduce operating risks.
Meanwhile, inflation has added US$35.1 million (N$657 million) to costs, influenced by higher contractor rates and material prices.
“Cost increases attributable to inflation account for a significant portion of the rise in pre-production capital costs,” noted Munro.
Favourable foreign exchange impacts have reduced the overall increase by US$20.6 million (N$385 million).
“The revised long-term USD-NAD assumption represents a modest weakening against the previous estimate, contributing to the reduction in projected costs,” Munro said.
Furthermore, operating costs have been adjusted, with a 2.6% increase in the all-in sustaining cost to US$39.09 per pound of uranium.
Bannerman Chief Executive Officer, Gavin Chamberlain, said the early development of the Etango-8 project is progressing well, with positive outcomes from the FEED and CBE processes.
“The FEED work has confirmed the high quality of the technical evaluation and design, as detailed in the December 2022 DFS. Finalising the CBE has demonstrated the robustness of the DFS cost estimates, evidenced by the lack of significant increases in forecast construction or operating costs,” he said.
Additionally, he noted that the moderate increase in forecast pre-production capital is attributed to design enhancements that deliver cost efficiencies and reduce operating risks.
This comes as Bannerman has started detailed design works for Etango-8, with early works on the access road and construction water pipelines progressing well and slated for completion in July.
“The early development of our Etango-8 project is progressing well, with positive outcomes from the FEED and CBE processes,” said Chamberlain.
