Extract shares rise on Husab price tag

Extract Resources has put a $US1.48 billion ($A1.43 billion) price tag on its Husab uranium project in Namibia, which it says will be one of the world's three largest uranium mines.

Shares in the Perth-based company were up 29 cents, or 3.63 per cent, at $8.27 at 1212 AEST.

Extract released a definitive feasibility study for Husab today, based on mining 15 million tonnes of ore per annum, with a provessing plant producing 15 million pounds of uranium each year.

Capital costs were estimated at $US1.48 billion, while production costs, excluding royalties, marketing and transport were estimated at $US28.50/lb.

Extract said on Tuesday its cash balance of $86.5 million was enough for drilling, optimisation and initial development and is also was reviewing financing options.

"Any such financing is likely to involve a combination of new equity and debt," Extract said in a statement.

Extract Resources chief executive Jonathan Leslie said the release of the study was an important milestone for the company.

"The DFS results demonstrate that Husab is capable of being developed into one of the largest uranium mines in the world with a low-risk conventional open pit mine supported by a proven flow sheet," Mr Leslie said.

"While the DFS has demonstrated the economic viability of the project, additional exploration and resource definition drilling is expected to continue to increase the already large resource inventory to enable significant extensions to the mine life.

"We have initiated a programme to investigate this potential, as well as the potential for mine plan optimisation and process modifications to enhance the project's expected operating and financial performance."

Extract also said it had spoken with potential customers to assess demand for product from the Husab project and was confident it would become an attractive supplier to end users, due to Husab's ability to offer geographic diversification and long term output.

The company said its feasibility study (DFS) on zones one and two at Husab showed it would be a viable, low-risk open pit mine, producing about 15 million pounds of uranium oxide equivalent per year.

"While the DFS has demonstrated the economic viability of the project, additional exploration and resource definition drilling is expected to continue to increase the already large resource inventory to enable significant extensions to the mine life," Extract chief executive Jonathan Leslie said.

"We continue to work closely with the Namibian Government to obtain the necessary permits to enable the mine to be developed in a timely manner."

Extract and its 14.7 per cent shareholder, mining giant Rio Tinto Ltd, recently held talks about the joint development of Husab with Rio's neighbouring Rossing uranium mine.

Separately, Extract's 42.79 per cent shareholder, Kalahari Minerals plc, is the subject of a takeover bid by Chinese state-owned CGNPC Uranium Resources Co Ltd.

Extract last month said it would oppose the bid unless a full bid was also made for Extract.