Bannerman Energy announced on Tuesday that it had completed the Etango-8 Front-End Engineering and Design (FEED) and Control Budget Estimate (CBE) processes.
The Etango Uranium Project is in the Erongo Region of Namibia, 30 kilometres southeast of Swakopmund.
Detailed design works for Etango-8 have also commenced, initially focused on earthworks and civils.
The company has started the first stage of detailed design for Etango-8 with the lead engineering consultant, Wood, and the Namibian technical owner’s team consultant. CREO is proceeding with finalising the bulk earthworks design.
Early works on the Etango access road and construction of water pipelines are proceeding well, with both due for completion in July.
Bannerman is undertaking these early works construction activities in parallel with offtake marketing and strategic financing workstreams.
Bannerman Energy says the definitive feasibility study pre-production capital estimate at Etango-8 has increased by US$36 million from US$317.5 million to US$353.5 million.
Total mining operating cost based on competitive contract tenders decreased by 2.1% from US$2.36/t material mined in the DFS (US$857M LOM) to US$2.31/t material mined in the CBE (US$839M LOM).
The tender quotations accounted for updated costs of mining consumables, including diesel.
Total processing operating costs increased 2.8% from US$6.92/t (US$785 million LOM) in the DFS to US$7.11/t (US$807 million LOM) in the CBE.
Cost increases attributable to inflation, including escalation of contractor rates and inflation in the price of critical materials, account for a US$35.1 million increase in pre-production capital costs.
The CBE continues to apply the total DFS contingency of US$27.3 million, noting that the estimation accuracy has improved to +/-10% (from DFS +/-15%).
The dominant factor affecting variable processing costs was that acid costs increased by 1.0% due to a revised acid consumption rate.
Other consumables costs increased by 9.6%, with power costs rising by 24.1%, including a 26.5% increase in the underlying quoted cost of grid power (no change in solar energy) and a 7.7% increase in total power consumption.
The water costs increased by 15%, including a 14.0% increase in the water costs quotation and an 8.6% increase in water consumption.
Maintenance costs increased by 62.1%, primarily attributable to maintenance associated with servicing/replacing the Ripios conveyor.
Diesel costs increased by 232%, driven by a 213% rise in diesel consumption and a 5.7% increase in the underlying cost per litre.
The significant increase in consumption is attributed to the expansion of the mobile plant fleet, primarily related to the dozing of conveyed rips in the disposal area.
The general and administration and external infrastructure costs increased by 26%, due largely to additional access road dust suppression and general inflation.
Fixed processing costs were reduced overall, with increases in labour costs offset by other reductions, including removing ripios trucking costs following the design change from ripios trucking to conveying.
The operating cost based on competitive contract tenders decreased by 2.1% from US$2.36/t material mined in the DFS (US$857 million LOM) to US$2.31/t material mined in the CBE (US$839 million LOM).
Bannerman Chief Executive Officer Gavin Chamberlain said the early development of our 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 need for significant increases in forecast construction or operating costs.
“The moderate increase in forecast pre-production capital is also attributed to design enhancements that deliver cost efficiencies and reduce operating risks,” Chamberlain said.
