The first test results from the plant are due in June and will be closely watched by the uranium sector and investors.
Bannerman completed the official opening of the Heap Leach Demonstration Plant at the Etango Project which is timely given increasing demand for uranium from China and India and their reactor plans.
In March 2015, the company announced a Share Purchase Plan (SPP) to raise maximum gross proceeds of up to $2 million.
The SPP closed on 14 April 2015, raising $407,500.
Following the close of the SPP, the company sought to place the shortfall under the SPP with interested investors.
This was successful and it received placement commitments for the entire shortfall under the SPP from the following investors:
- $860,000 from existing shareholder, Resource Capital Fund VI L.P. (RCF VI);
- $250,000 from existing shareholder City Natural Resources High Yield Trust PLC; and
- $482,500 in aggregate from the directors of Bannerman (also shareholders): Len Jubber ($400,000), David Tucker ($20,000) and
chairman Ronald Beevor ($62,500).
The funds raised will be used to conduct the heap leach demonstration program and for general working capital purposes.
The take up by RCF VI is a strong endorsement of Bannerman and Etango as the fund is a uranium "bull" and its view of the development potential and potential profitability of Etange when in development appears strong.
In addition the take up by existing shareholder City Natural Resources High Yield Trust and the participation by Len Jubber, the MD of Bannerman who is investing $400,000 of his own money are positive signals.
The shortfall placement has to be approved by shareholders.
The size and scale as well as strategic location of Etango implies it is likely to be one of few uranium significant projects that can be brought into production to meet demand in the next two years.
Etango is one of the largest undeveloped uranium deposits globally with Ore Reserves of 119 million pounds U3O8. Etango is anticipated to produce between 7 million and 9 million pounds of U3O8 per annum initially when in production with a long mine life.
The Etango heap leach demonstration program is a key plank toward project de-risking, financing and possible development.
The results of the heap leach plant demonstration plant in June are also a price catalyst as good results will rank Etango as even further advanced on path to development.
Significantly, the Etango project is located near to Rio Tinto's (NYSE:RIO) Rössing uranium mine, Paladin Energy's (NYSE:PDN) Langer Heinrich uranium mine and CGNPC's Husab uranium mine - under construction.
All likely not lost on its major shareholders as well as Asian energy groups.
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