09/04/2009 - 15:27

Impact looks to Mega deal for options

09/04/2009 - 15:27


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Perth-based Impact Minerals said it is considering a range of options to advance its WA uranium project following the recent $US49 million deal to farm-out a nearby uranium deposit.

Impact looks to Mega deal for options

Perth-based Impact Minerals said it is considering a range of options to advance its WA uranium project following the recent $US49 million deal to farm-out a nearby uranium deposit.



The announcement is below:


A range of development and ownership options are being considered for one of Western Australia's more prominent uranium projects - Nowthanna - with a view to accelerating its progression to commercial operation.

Majority holder of the deposit's uranium resources, Perth-based Impact Minerals Limited, (ASX code: "IPT") said today the commencement of a scoping study later this year was one of the current considerations although "all options remain on the table".

"The options at this stage of our assessment announced recently include invigorated exploration schedules through 2009 to prove up further resources and reserves, implementing a scoping study, consolidating the ownership of the deposit, or at the other end of the scale, a sale of the asset," Impact's Managing Director, Dr Michael Jones, said.

"A scoping study would provide early direction on whether Nowthanna's oxide resource could be treated via a mobile or a central processing plant," Dr Jones said.

"There has been no firm decision as to the preferred course at this point in time other than all owners recognise the need to reach a consensus and discussions are in progress to ensure this happens."

Nowthanna is a calcrete-hosted uranium deposit located 70 kilometres southeast of Meekatharra in Western Australia. The project in part straddles the boundary between Impact's 100%-owned Quinns Lake (E51/1075) uranium project and the 20%-owned Yarrabubba (E51/1072-1073, E20/563-567) project, which is in joint venture with CITIC Nickel Australia Pty Ltd (60%) and a group of individuals (20%).

At a cut-off grade of 0.2 kg/t (200 ppm) uranium oxide, the Nowthanna deposit contains about 10 million tonnes of uranium oxide at an average grade of 0.45 kg/t (450 ppm), for a contained 4,600 tonnes or 10 million pounds of uranium oxide. The ownership structure gives Impact a net entitlement to 40% of this JORC compliant Inferred Resource.

Dr Jones said the review process for Nowthanna's immediate future and on-ground work programs had also now to take into account the recent Mega Uranium transaction on another nearby WA calcrete-hosted uranium project - Lake Maitland.

Under that deal, Toronto Stock Exchange-listed Mega Uranium agreed to farm-out 35% of its Lake Maitland uranium deposit for US$49 million to a consortium of Japanese nuclear power production companies.

Lake Maitland is 250 kilometres east of, and is geologically similar to, Nowthanna.

"This agreement has put something of an indicative value on comparable WA uranium projects and is one of the first major deals to value and commercially rate the State's uranium deposits since the pro-uranium mining election outcome," Dr Jones said.

"At a 200 ppm cut-off grade and an exchange rate of A$1 to US$0.70, the Mega agreement values the uranium oxide in the Lake Maitland deposit at about A$11 per pound," Dr Jones said.

"By comparison with Impact's recent share price of around 6.5 cents and on the basis that no value is ascribed to the Company's other African and Australian uranium, gold and nickel interests - Impact's total enterprise value is less than 80c per pound of uranium oxide for our Nowthanna entitlement.

"This suggests considerable value is still to be unlocked from Impact's part-ownership of the deposit at a time when Mega is flagging a planned production start-up at Lake Maitland by late in 2011.

"The Mega deal therefore has a very positive influence on future exploration and development options for Nowthanna and for the uranium industry in Western Australia as a whole."

Dr Jones said Impact's Board believed that world capital and commodity markets would continue to be unpredictable for some time as investors waited to see the effects of the stimulus packages announced by governments around the globe.

"Many of these packages have focussed on infrastructure development which is commodity intensive and should underpin a fresh and robust level of demand for metals," he said.


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