Marenica Energy builds two-pronged uranium strategy, has “first-mover advantage” when prices improve
Among other benefits, Marenica claims its patented technology can cut capital and operating costs to process surficial uranium in half.
Uranium company Marenica Energy (ASX: MEY) has outlined the strategic advantages of its Namibian and Australian asset portfolio in a new presentation.
The company included a map underlining its recent discovery of an extensive new uranium system at Hirabeb in Namibia.
Considering the Hirabeb paleochannel was found to be 36km long is impressive in itself;, the extra touch was to superimpose the length on a map of southern England and Northern France showing the paleochannel is equivalent to the width of the English Channel between Dover and Calais.
Within that 36km, uranium mineralisation has been intersected over a distance of 30km.
The illustration and presentation underlines Marenica’s position — with an already advanced project (some might call it “shovel-ready”) and a suite of other uranium assets in Namibia and Australia, as the company is lining up to become a long-term uranium supplier in the future.
Patented uranium beneficiation technology
Plus, Marenica owns a patented technology, U-pgrade, which it describes as a “disruptive beneficiation process”.
The company claims the process can “revolutionise surficial uranium processing by reducing processing capital and operating costs by approximately 50%, thereby improving the economics of all uranium projects which process surficial uranium and specifically, making lower-grade projects much more competitive and financially viable”.
The process rejects 95% of mass prior to the leaching process and has been demonstrated to increaseits Marenica project ore grade 93 parts per million to about 5,000ppm uranium oxide. U-pgrade also reduces acid consumption.
Poised for price impact when supply problems hit
In its latest presentation, the company describes itself as “positioned to take ‘first-mover advantage’ ahead of other greenfield developments”.
Moreover, and as several other uranium hopefuls have noted, the market conditions are right — one might also say “ripe”.
There are 54 nuclear power stations now under construction and it’s expected that a total of 321 new plants are expected to come into production by 2040.
Also, well-chartered is the fact that the United States’ utilities have been running down their stockpiles and, for them, the supply crunch is only one or two years away when they will need to go back into the market.
In addition, on present global production, there may not be enough uranium to meet their needs.
The simple fact is, as Marenica points out, many uranium projects remain uneconomic at current low uranium prices.
The latest spot price indicates uranium has slipped below the key US$30 per pound (A$41.83/lb) and was last reported at US$29.45/lb (A$41.06/lb).
Seven uranium projects in Australia added to portfolio
Marenica has a large land position in the Erongo uranium province in Namibia, a country with an established and long running uranium mining industry. It has three project areas: the Namib, Mile 72 and Marenica uranium projects.
Marenica has a large inferred uranium resource of 61 million pounds (27,670 tonnes).
Late last year, the company snapped up projects in Australia.
The wholly-owned projects are Angela with a resource of 31Mlb (14,061t), Minerva (high-grade uranium and gold), Thatcher Soak with 11Mlb (4,990t), and Oobagooma with a historical resource which cannot be reported. The first two projects are in the Northern Territory, the last two in Western Australia.
Marenica also has minority interests in three NT projects controlled by Energy Metals (ASX: EME).
It holds 21% of the Bigrlyi uranium-vanadium ground with 21Mlb (9,525t), 23% of Walbiri with 16Mlb (7,257t) and between 21% and 24% of additional smaller deposits with a total resource of 3.6Mlb (1,633t).
New resources enhanced by own technology
As the company has noted, these mineral resources are “significant in their own right but could be dramatically enhanced when coupled with Marenica’s U-pgrade beneficiation process”.
In its 2020 annual report, Marenica chairman Andrew Bantock pointed to a year in which the company added 48Mlb (21,772t) of high-grade uranium resources located in Australia to its asset base.
In Namibia, it has added new ground and discovered high-grade mineralisation within an extensive paleochannel system, and discovered the new system at Hirabeb.
The company now has more than 90Mlb (40,823t) of uranium oxide resources and, in the nuclear fuels sector, it is the largest holder of uranium exploration rights in Namibia.