Extract Resources Seeks Funding For Its Namibian Uranium Project

Published on Thursday September 15 2011

EXTRACT Resources has begun talks with potential lenders to its $US1.66 billion ($1.61bn) Husab uranium project in Namibia, in a major test of financiers' willingness to support new uranium mines following Japan's nuclear crisis. 

Perth-based Extract has approached several financing agencies and banks, seeking support for its plans to process 15 million tonnes of ore annually at Husab, which would make it one of the world's largest uranium mines.

"Extract intends to finance the development of Husab with a combination of debt and equity," chief executive Jonathan Leslie said in Extract's annual report.

Spot uranium prices continue to trade near lows reached soon after three Fukushima Daiichi nuclear reactors exploded. Long-term contract prices have fallen 12 per cent since Japan's March 11 earthquake and tsunami.

The long-term contract price is expected to stay in a $US60-$US75/lb trading band but analysts say spot uranium could fall to $US45.95/lb from the current $US52.75/lb on fears of weak demand in Japan and Germany.

The long-term price "should support development decisions at a number of advanced uranium development projects, particularly in Namibia," Sydney-based Resource Capital Research wrote in a report this month.

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