"Fantastic" Rossing South uranium grades continue to impress

Some more excellent grade figures for the Rossing South uranium project have been announced by operator Extract Resources.

LONDON - 

A perhaps over-confident announcement from Kalahari Minerals chairman, Mark Hohnen, said "Rossing South continues to yield fantastic results and, these latest set of results reconfirm that Rossing South is the highest grade granite hosted uranium deposit in Namibia and that it continues to evolve into one of the largest uranium deposits in the world." 

However, Hohnen can perhaps be forgiven his superlatives as the latest drilling results, announced by Extract Resources, in which Kalahari has a 38.6% stake, are adding some excellent data to what is already an extremely impressive potential resource, located just to the south of Rio Tinto's Rossing uranium mine.

Extract reports that it has seven drilling rigs working on defining the deposit and continues to encounter zones of massive high grade alaskite-hosted uranium mineralisation, and is now working on extending the resource to the west of Zone 1 and south of Zone 2.

The latest announced drilling results are indeed somewhat more than promising with good intersection thicknesses varying in grade between 485 ppm and 3,920 ppm. The defined NI 43-101 resource at Rossing South has already been estimated at 108 million lbs of U₃O₈ at a grade of 430 ppm using a cut-off of 100 ppm, which is in excess of the size and grade at Rio Tinto's Rossing operation which is one of the world's largest uranium mines.

Earlier this month Extract announced that it has appointed Australian engineering group, GRD Minproc, to conduct preliminary and definitive feasibility studies on the project.

Not surprisingly, Extract and Rossing South have been the subject of much interest with announced stakes in the company already having been taken up by Rio Tinto and Polo Resources. Rio also holds a significant stake in Kalahari as does a Polo associate by virtue of having the same chairman in Stephen Dattels, Emerging Metals. At some stage it looks as if a major take-over battle for Rossing South is likely to drive share prices higher - particularly as Namibian uranium finds have been carrying premium valuations.

The most likely winner would seem to be Rio Tinto with its neighbouring Rossing mine, although Rio has more pressing debt concerns to deal with at the moment. But under this scenario, if the price is bid up, Polo and Emerging Metals shareholders could make a killing too, as neither would seem to have the financial muscle to develop a mine there themselves!

Meanwhile Extract has also announced that the Namibian Government has extended the Exclusive prospecting Licence EPL3138, which covers the Rossing South ground, for two more years.

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