WINDHOEK: Bannerman Resources and the State-owned Epangelo Mining Company have cancelled a previously announced deal that would have allowed Epangelo to own a stake in Bannerman’s Etango Uranium Project.
Etango is located 38 kilometres east of the coastal town of Swakopmund in the Erongo Region.
Bannerman’s Chief Executive Officer (CEO) Len Jubber announced in a media statement issued and published on its website last Thursday that the deal was called off after the companies could not reach a common acceptable agreement regarding the commercial substance of the term sheet.
The term sheet, which outlines the material terms and conditions of a business agreement, required that certain conditions be satisfied within four months (ending last Thursday).
These included a condition that Epangelo complete its due diligence investigations and obtain its acquisition finance.
“Since that time, Epangelo has completed technical due diligence investigations to its satisfaction and confirmed its recognition of the importance of the Etango Project to Namibia. However, the parties have been unable to complete a mutually acceptable agreement reflecting the commercial substance of the term sheet,” Jubber noted.
Bannerman is an Australian uranium development company.
Epangelo, under the term sheet, would initially own five per cent in Bannerman’s 80 per cent interest in the Etango Uranium Project, with an option to acquire another five per cent at a later stage.
Bannerman is in a solid position in the current weak equity and uranium markets, with good cash reserves (Australian dollars 9.6 million as at 30 June 2012) and a recently-completed Definitive Feasibility Study on the Etango Uranium Project.
According to Jubber, monthly expenditures will now be low and, whilst Bannerman “is under no compulsion to transact the Etango Project at cyclically low prices, Bannerman will continue to pursue local Namibian and international development partners in a manner which will deliver fair value to shareholders”.
The Etango Uranium Project is one of the world’s largest undeveloped uranium deposits.
A Definitive Feasibility Study has found that the Etango Uranium Project is expected to produce about seven to nine million pounds of Triuranium octoxide (U3O8) annually for the first five years and around six to eight million pounds every year henceforth.
The life of the project is calculated to be a minimum of 16 years with good potential for expansion via the conversion of the existing inferred resource.