Bannerman slumps on $609m Etango cost

Shares in Bannerman Resources closed down 28 per cent after the release of prefeasibility study results pegged the capital cost of the Etango uranium project in Namibia at $US555 million ($A609 million).

The uranium outfit said the "robust" economics demonstrated in the study has prompted a decision to move to a definitive feasibility study.

Expected operating costs for the Etango operation, which is forecast to have a mine life of 16 years, is $US41 a pound of uranium oxide at an output of between 5 million tonnes to 7mt of uranium oxide each year.

Pre-tax internal rate of return is forecast at 22 per cent and payback for the project is four years based on a long-term uranium price of $US70/lb.

Production is estimated to start in late 2013.

Bannerman chief executive Len Jubber said Bannerman will progress talks with potential strategic partners and financing providers to explore various funding options for the development of Etango.

Shares in Bannerman closed down 32 cents to 83c today.