XEMPLAR neuer Uranium Star
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Xemplar Energy (XE : TSX-V : $7.25), Net Change: 0.50, % Change: 7.41%, Volume: 2,149,994
Where there’s smoke, there’s Rio Tinto? Shares of Xemplar popped after the Sunday Express reported that Rio Tinto (RTP)
may be considering a bid for the company. Xemplar has accumulated an extensive package of uranium exploration holdings in
Namibia. The Warmbad project offers the potential of a uranium district with extensive radiometric targets to be drilled.
Additionally, the other Namibian uranium properties offer good exploration potential. The recent market capitalization of the
company indicates that the market is anticipating a discovery of a large Rossing-type deposit. The drill results are expected by
mid-January. The Sunday Express says, “Rio is understood to be watching events carefully and will decide on whether or not it
will make a move for the firm after the results come in.” The newspaper report goes on to say that Xemplar has found a site in
Namibia that may contain more uranium that Rio’s existing mine in that country. Rio Tinto has a 69% interest in the Rössing
uranium mine in Namibia. The mine currently produces about 7.55% of the world’s uranium.
Moderation
Zeitpunkt: 13.01.08 09:50
Aktion: -
Kommentar: Off-Topic - bitte in zukunft auch vorhandene threads benutzen - mfg peet
Zeitpunkt: 13.01.08 09:50
Aktion: -
Kommentar: Off-Topic - bitte in zukunft auch vorhandene threads benutzen - mfg peet
Xemplar - World Class Uranium Opportunity
Xemplar is exploring in Namibia for Uranium with over 760,000ha of license area
to investigate. The key focus of the company’s work is the Warmbad project with
a Rossing type uranium occurrence, containing 14 uraniferous alaskites identified
to date. We believe that the Warmbad license area could develop into a major
uranium mining district supplying a significant proportion of world supply. We
expect a major such as Rio Tinto, Areva (French Uranium Company) or a Chinese
to make an offer for the company as the projects are delineated.
Xemplar Price History (Jan 06-present) C$/share
-Potential valuation range of Warmbad uranium prospect could be US$2-7bln.
-World class uranium discovery that could lead to a major uranium district.
-Portfolio of major uranium projects that could be developed into several mines.
-Relatively quick to develop due to at surface nature of deposits.
-Warmbad infrastructure is good with nearby water and power, as well as
access by road or air.
-Peer group acquisitions indicate substantial upside in terms of valuation e.g.
Areva’s US$2.5bln acquisition of Uramin for the Trekkopje deposit.
-World scale uranium assets are of strategic importance to major mining
Companies in order to ensure sales agreements with consumers.
-Uranium prices appear strong in the medium term 1-5 years.
-Namibia has a well developed uranium mining industry and country risk is
seen as relatively low for this form of mining activity.
-Around 150m shares traded last year between C$3-4/share implying
good liquidity.
Xemplar Introduction
We feel that nearly all the value of Xemplar is being given by the market is for
Warmbad which has 14 uraniferous alaskites identified so far. We have used
Several methods to illustrate the potential value of this license area that
cumulatively could hold more uranium than any other deposit discovered to date. It
also has possibly the largest single uranium deposit (Aluriesfontein) within the
license area (see table 1 on page 3 for summary of deposits).
To illustrate the potential value that is within the license area we have compared
Warmbad to two uranium project being developed in Namibia:
-Trekkopje, which Areva obtained through the acquisition of Uramin for
US$2.5bln
-Valencia currently being developed by Forsys.
In addition we have carried out two DCF models, one of a major mining operation
producing around 30mmlbs per year of U3O8 and a smaller operation producing
11-15mmlbs per year. Both of these demonstrate that there is significant upside
potential in such a development. The license area also has the potential to
support more than one such operation.
Xemplar is the largest holder of uranium licenses in Namibia and has received
6 Exclusive Uranium Prospecting Licenses (EPLs) located in the Aus, Cape
Cross and Warmbad areas. The company is also applying for a further 5 EPLs
covering the Engo Valley Uranium deposit and Garub area have been applied for.
The significant land position in Namibia is attractive to investors and makes the
company an interesting target for acquisition by one of the larger players. The
company needs to progress its exploration program to add value, and had
US$11m of cash in October to fund this. It now has 5 drill rigs on site at Warmbad.
World scale uranium deposits are of strategic importance to major mining companies
that need to secure supply before they can sign contracts e.g. Areva’s US$12bln
deal with the Chinese for two reactors and uranium supply from Trekkopje.
Therefore the potential scale of Warmbad makes Xemplar an attractive target for a
major. There is already speculation that Rio Tinto may make a bid for the firm.
Namibia is of comparatively low political risk for an African country. It is sparsely
populated with 1.8m residents, as well as having an established mining industry
and infrastructure. The country became independent in 1990 and elected its most
recent president in 2004.
Valuation Discussion
We feel that Xemplar remains undervalued due to the potential value within the
Warmbad license area. This is despite the significant share price rise seen in
2007. Warmbad could become a world class uranium mining district. The license
area contains 14 significant uraniferous alaskite deposits, several of which are
could be equal or possibly larger than Rossing.
The license area abuts the Orange River and a major power line, ensuring power
and water which are two major key issues that affect the development of an
operation. From a logistical standpoint, new developments are not supposed to
be this easy.
In contrast, the development of Trekkopje (now owned by Areva following the take
over of UraMin), will require a US$140m desalinization plant to produce over
50million cubic metres of water, of which the mine will consume around 20 million
cubic metres, and the remainder to be distributed by state water operator NamWater.
The following table summarises the various uranium occurrences on the Warmbad
license area in terms of size and possible tonnages versus the resources of four
known deposits, Trekkopje, Forsys, Langer Heinrich and Rossing.
Table 1: Summary of Namibian Alaskite Deposits
Dimensions (km) Volume Tonnes grade U3O8
Length Width Depth million m3 million ppm mmlbs
Warmbad
L W D V T G MMLBS
Aluriesfontein 4.0 6.0 0.2 4,800 12,960 100 2,857
Sandfontein North 0.3 3.0 0.2 180 486 100 107
Big Yellow 0.3 3.0 0.2 180 486 100 107
Kink 0.3 3.0 0.2 180 486 100 107
Gaidip Sandfontein-SW 0.2 5.0 0.2 200 540 100 119
Gaobis 0.9 4.0 0.2 720 1,944 100 429
Energy Ridge 0.4 3.0 0.2 240 648 100 143
Leopard Trap West 0.3 2.0 0.2 120 324 100 71
East 0.3 1.0 0.2 60 162 100 36
Houms River North 0.3 2.0 0.2 120 324 100 71
Central 0.3 4.0 0.2 240 648 100 143
South 0.2 2.0 0.2 80 216 100 48
Girtis 1 2.0 0.7 0.2 280 756 100 167
Girtis 2 2.0 0.5 0.2 200 540 100 119
Total Warmbad 7,600 20,520 4,524
Trekkopje 563 126 60
Forsys 257 106 158
Langar Heinrich 103 600 136
Rossing 705 256 466
Total 1628 820
The tonnages calculated for Xemplar’s deposits have not been proven and are
based on the observed dimensions of the alaskites, the density of the rock
(generally accepted to be around 2.7t/m3) and assuming a depth of 200m.
Xemplar has identified the deposits through the use of a 23,000 line km helicopter
radio metric survey which picks up the gamma radiation emitted from the
uraniferous rocks, although the signature can be masked by as little as 20cm of
dirt. There could therefore be more deposits in the area.
In the table above we have conservatively used a figure of 100ppm for the grade.
On this assumption alone we have a number of significant uranium deposits, and at
least two that are world class e.g. Aluriesfontain and Gaobis. In addition, many of
these deposits are separated by just a few hundred metres or less, and the ore could
easily be processed by a central plant (see map in Warmbad property section).
Peer Group Comparison
Table 1 also shows the resources of four other significant ore major alaskite
deposits being mined or developed in Namibia. Warmbad could contain more
uranium than all of these projects combined. Current resources of Rossing,
Langer Heinrich, Valencia and Trekkopje amount to 820mmlb of uranium.
Even if further exploration work doubles the resources of these deposits,
Warmbad still has the potential to be orders of magnitude greater, with possible
4.5billion pounds of uranium in the ground. This is assuming that the alaskites
only go down 200m, which is conservative and with a grade of 100ppm which
could also turn out to be conservative, at least for significant sections. A field trip
showed large portions at surface that were in excess of this grade.
Xemplar Price History (Jan Big Yellow outcrop at surface
Since this is theoretical and very little drilling has been done with which to
calculate a resource applying a 90% discount still leaves us with 452mmlbs of
U3O8, that would still place the district in the top three globally (see table 2),
although the grades could turn out to be lower than the majority of other deposits
being mined or developed.
Our figure of a possible 4.5 billion pounds of uranium implies that this is the single
largest uranium only resource in the world, albeit split across a number of
adjacent deposits. Aluriesfontein with a potential 2.857 billion pounds could be
the single largest deposit (see table 2 comparing world top 15 uranium deposits).
With so many deposits, it would seem entirely possible that if the overall grade
was only 100ppm, there would be sufficient higher grade zones of 150-200ppm
to amount to at least another Trekkopje and possibly much more as an
economic resource.
467mmlbs after 90% discount
applied to theoretical resource
Conservative assumptions used
Warmbad could contain
4.5billion pounds of U3O8 to
200m depth
Xemplar
Table 2:
Top 15 Pure Uranium Deposits
Ore Resource Grade U3O8
Deposit Country Status Mt ppm mmlbs
Aldansky Russia Conceptual 227.000 1,500 751
McArthur River U Canada Operating 1.392 163,200 501
Rössing Namibia Operating, exp/plans 705.200 300 466
Inkai Kazakhstan Prefeasibility 351.400 500 387
Jabiluka Australia Construction 33.890 4,800 359
Cigar Lake Mine Canada Construction 0.814 189,800 341
Ezulwini U South Africa Susp, restart plans 140.740 800 248
Dominion U South Africa Operating 255.760 400 226
Arlit Niger Operating 28.300 3,300 206
Ranger Australia Operating, exp/plans 70.470 1,300 202
Mynkuduk (West) Kazakhstan Prefeasibility 140.000 500 154
Kharassan Kazakhstan Conceptual 55.000 1,200 146
Itataia Brazil Conceptual 72.300 900 143
Langer Heinrich Namibia Construction 102.700 600 136
Jahodna Slovakia Conceptual 9.000 6,600 131
Two recent developments that are worth comparing Warmbad to are the
Trekkopje and Valencia deposits, being developed by Areva and Forsys
respectively.
Areva is developing Trekkopje having acquired Uramin in July 2007 for
US$2.5bln dollars. Areva effectively paid US$15.86/lb uranium in the ground for
a project with a measured indicated and inferred resource of 563mt at a grade of
130-140ppm, or 158mmlbs of uranium.
Discounting by 90% the theoretical uranium in the ground at Warmbad shown in
table 1, and using the figure paid by Areva or Trekkopje, then Warmbad could be
worth US$7.175bln to a major uranium producer such as Areva.
Comparison to Valencia
Forsys is developing the Valencia uranium project, and currently has a market
capitalisation of around US$260-270m. With total resources of 60.2mmlbs of
uranium (measured, indicated and inferred), then the market value’s it at
US$4.4/lb in the ground.
Using the same basis as the comparison to Trekkopje, then we could assume that
Warmbad could be worth US$1.973bln once it has completed significant
exploration and prepared Environmental Impact assessments and technical
reports for development. It would probably require a spend of around US$40-50m
on exploration and analysis at Warmbad to get to the same stage as Valencia.
Note that this is discounting the theoretical uranium content (4.5billion pounds)
shown in table1 by 90%.
The Warmbad license area also has many advantages over Valencia e.g. water,
nearby power lines and potentially much larger.
Peer Group Conclusion
On the measures discussed previously, it is clear that to either a major or the
market there is clearly significant upside to come from the Warmbad licence area
if drilling results return economic grades. However, it should be emphasised that
very little drilling has been done to date, and no results have been published.
Consequently making the above assumptions carries risk. A recent site visit, the
two diamond drill holes demonstrated the presence of significant intersections of
uraniferous alaskite from Big Yellow and Gaobis.
The results of ongoing exploration will drive the potential value within these
properties as work confirms economic grades of uranium within the alaskites.
Theoretical Mine Development
As a further method to demonstrate the possible value at Warmbad, we have
modeled two scenarios for the development of a mine. One is for a major
operation milling around 100mtpa of ore, and the other of 25mtpa of ore. The
larger we have assumed mines at lower grades. Both use a discount factor of
12% and start producing in mid 2011.
Our base case assumptions used for both mines use a long term uranium price
of US$65/lb. Both developments envisage positioning a milling and processing
center located near to big yellow that is fed by a number of different alaskite ore
bodies near by (see map on page 2). Such a strategy would allow selective
mining, and therefore good grade control. We have used low strip ratios, starting
at 0.5, and rising to 1, since it appears that there is plenty of resource at surface.
Large Mine Scenario (100mtpa)
For our larger hypothetical mine at Warmbad, that mines 100mtpa of ore, we
have assumed grades of 200-130ppm, producing around 30mmlbs per year. This
would be a major mine, possibly the largest pure uranium mine in the world. It
would produce a similar amount of uranium as BHP’s expanded Olympic Dam
mine that is expected to produce around 33mmlbs pa (15ktpa), as well as
500ktpa of copper.
For this scenario we have assumed a capital cost of just over US$2bln (inclusive
of US$60m exploration spend) to get into production, which we feel is a
conservative number, but does include the use of contract mining. The capex has
been derived largely from using the Forsys June 2007 technical report on
Valencia which was written by Snowdon. The report assumes a capex of
US$230m to develop 13mtpa of ore to plant operation. We have assumed that
there will be economies of scale with a larger operation.
Concerning, operating costs we have used assumptions similar to Valencia which
uses US$10.34/t of ore mined. Although we expect economies of scale to once
again offer some potential for savings and are using a figure closer to US$8.5/t
of ore mined, or US$25/lb of U3O8. We have also modeled a 4 year tax holiday
before a 30% tax rate comes into affect. We have assumed that the operation
continues into perpetuity, since even at 100mt of ore mined per year, we think it
will take decades to deplete the ore within the property (refer to table 1 for
potential tonnages or ore).
Using these assumptions and a long term uranium price forecast of US$65/lb, we
derive a value for the project if all debt funded of US$1.327bln to share holders,
if all debt funded. The property will need to be extensively drilled to confirm
uniformity of grade etc.
The following table summarizes our base case:
Table 3: Major mine scenario earnings summary
2008 2009 2010 2011 2012 2013 2014 2015 2016
U3O8 price US$/lb 80 80 80 70 65 65 65 65 65
Uranium Produced mmlbs 0 0 0 22 40 37 33 33 33
Grade Mined ppm 0 0 0 200 180 170 150 150 150
Capex spend US$m -20 -294 -953 -778 -16 -16 -16 -16 -16
Revenue US$m 0 0 0 1,235 2,192 2,192 1,935 1,935 1,935
Royalty US$m 0 0 0 -25 -44 -44 -39 -39 -39
Opex US$m 0 0 0 -432 -851 -851 -851 -851 -851
D&A US$m 0 0 0 -199 -200 -202 -205 -207 -210
PBT US$m 0 0 0 580 1,097 1,095 840 838 834
Tax US$m 0 0 0 0 0 0 0 -251 -250
PTP US$m 0 0 0 580 1,097 1,095 840 586 584
Free cash US$m -20 -294 -953 0 1,282 1,282 1,029 778 779
Smaller Mine scenario (25mtpa)
The size and potential of the Warmbad license lends itself to supporting a
major mining operation of strategic importance to a major mining company.
However, it is worth investigating the development of a smaller operation that
could be undertaken by a junior. For this we have developed a scenario of a
25mtpa of ore being mined at a higher grade of 300-200ppm, leading to
production of 11-15mmlbs per year of U3O8. A smaller operation should be
able to mine more selectively, hence the higher grades used.
We have once again used information from the Forsys technical report on
Valencia to come up with our assumptions that leads to an operating cost of
US$8.7/t (US$17-22/lb U3O8), and a capital cost of US$550m. Other
assumptions concerning tax, royalties etc remain unchanged between the
different scenarios.
Table 4: Smaller mine scenario earnings summary
2008 2009 2010 2011 2012 2013 2014 2015 2016
U3O8 price US$/lb 80 80 80 70 65 65 65 65 65
Uranium Produced mmlbs 0 0 0 7 15 15 14 14 13
Grade Mined ppm - - - 300 280 270 250 250 235
Capex spend US$m -20 -86 -248 -196 -4 -4 -4 -4 -4
Revenue US$m 0 0 0 370 853 871 806 806 758
Royalty US$m 0 0 0 -7 -17 -17 -16 -16 -15
Opex US$m 0 0 0 -88 -217 -217 -217 -217 -217
D&A US$m 0 0 0 -50 -50 -51 -52 -52 -53
PBT US$m 0 0 0 225 569 586 522 521 473
Tax US$m 0 0 0 0 0 0 0 -156 -142
PTP US$m 0 0 0 225 569 586 522 365 331
Free cash US$m -20 -86 -248 79 615 633 569 413 380
Our valuation for the above scenario using our long term price of US$65/lb gives us
a DCF of US$1.4bln.We have assumed that the operation continues into perpetuity
mining 200ppm ore. Again the deposit needs to be drilled to confirm grades.
Sensitivity Evaluation
Two key elements that will have the most effect on the value of a project being
developed are uranium prices, and grade, the following table summarizes the
possible NPV using different grades or uranium prices to illustrate the sensitivity
and possible values in developing such a project.
Table XX: Smaller mine scenario Table 5: Valuation Sensitivity of Major Mine scenario US$000’s
Uranium Price US$/lb
55 Base case 65 75 85 95
Grade change -10% -761 469 1600 2780 3960
Base Case -39 1327 2583 3895 5206
10% 682 2185 3567 5009 6452
20% 1403 3043 4550 6124 7698
Percentage impact to base case
Grade change -10% -157% -65% 21% 109% 198%
Base Case -103% 0% 95% 194% 292%
10% -49% 65% 169% 277% 386%
20% 6% 129% 243% 361% 480%
Table 6: Valuation Sensitivity of Smaller Mine scenario US$000’s
Uranium Price US$/lb
55 Base case 65 75 85 95
Grade change -10% 652 1121 1562 2016 2471
Base Case 930 1452 1941 2446 2952
10% 1208 1782 2320 2876 3432
20% 1486 2112 2699 3305 3912
Percentage impact to base case
Grade change -10% -55% -23% 8% 39% 70%
Base Case -36% 0% 34% 68% 103%
10% -17% 23% 60% 98% 136%
20% 2% 45% 86% 128% 169%
The above tables demonstrate that the riskier but potentially more rewarding
development would be a major mine. The major mine shows a possible 480%
upside versus our base case if grades are 20% higher than modeled and long
term uranium prices are at US$95/lb. In comparison the same assumptions for a
smaller mine reflect only 169% upside to the base case.
Conclusion
In summary despite Xemplar’s rapid improvement (almost 8 fold) over the course of
2007 we think that there remains significant upside in the share price from the
Warmbad assets. As shown above this is viewing the assets from three perspectives:
1. What a major uranium producer is prepared to pay for a world class asset
e.g. Trekkopje.
2. What the market is prepared to value a small independent miner developing
a project to feasibility level e.g. Forsys.
3. Theoretical DCFs on just one mine operating, and this region has the scope
to support at least one, and possibly two or three significant operations.
The biggest risk at the current time is that the grades from the exploration
programme at Warmbad will disappoint and make the deposits uneconomically
viable. However, we feel that the potential of Warmbad justifies the risk. We have
tried to factor in grade risk in options 1 and 2 through the use of discounting the
theoretical uranium content by 90%.
In option 3, the two central plant models leave scope for selective high grade mining
from different ore bodies. It could therefore become possible to improve grades
above those outlined in the scenarios (see Sensitivity Evaluation on page 9).
Although our base case DCF valuation for the smaller mine at US$1.4bln is
slightly more than the large operation at US$1.327bln (the result of higher
grades), a major company will be keen on the larger operation due to the strategic
importance and securing larger market share and as shown in the comparison
tables. There is also greater potential for upside value (and downside) as shown
in the sensitivity analysis.
The potential of the Warmbad province is particularly appealing to major mining
companies since significant world scale uranium deposits are of strategic
importance to majors. They cannot sign contracts with uranium consumers, or to
build power stations unless they can guarantee supply.
An example of the need to secure supply is Areva’s US$12bln deal with China
Guangdong Nuclear Power Corp to build and supply two new nuclear reactors
with 600tpa of uranium, as well as a further 23kt of uranium. To get this contract,
Areva needed to buy Uramin. As part of this, the Chinese have agreed to buy
35% of whatever is produced from Trekkopje.
Warmbad also presents the opportunity for one or more major operations that
could be comparatively quick to develop. The ore bodies are at surface, large,
there is water, and power lines in the area, in addition the low political risk is a
further benefit. We feel there is a strong possibility that more than one major
could make a bid for the company in order to secure long term contracts with the
various nuclear power stations planned for the coming years.
Risks
Geological/exploration risk: We view grades as the greatest risk to Xemplar.
Should the exploration program disappoint and grades are too low to be
economic then Warmbad might not be developed. Initial indications are that there
should be enough economic alaskite on the property to lead to a mine, although
the results from the exploration program will be key in confirming this.
Commodity Risk: Uranium prices have performed well in recent years, and we
would expect ongoing strong prices as there has been insufficient development of
new resources over the years, and supply is struggling. Additionally there is growing
momentum to build new plants around the world as nuclear energy becomes
increasingly in comparison attractive to fossil fuels, and is the only alternative
currently available to support base load power demand. Uranium miners also tend
to lock in long term contracts as part of the development of new resources.
Political risk: Political risk in Namibia is low, the company has a well established
mining legislative structure, with diamond and uranium mining being the largest
contributors to the countries GDP. There is growing pressure for land reform, with
the acquisition of white owned farms starting in 2005 as the government aims to
resettle several thousand landless citizens.
Xemplar Projects
The following lists the various projects that Xemplar has in its portfolio.
Warmbad Province (approx 4,700km2)
This is Xemplar’s flag ship operation located in the South of Namibia along the
north side of the Orange River and has the potential to become a major uranium
mining district with 11 significant alaskite uranium occurrences, discovered to
date. Since the radiation signature for the deposits can be hidden by as little as
20cm of dirt, there could be more deposits in the area.
various deposits. The company is keen to secure more to accelerate the drilling
program, however the securing of rigs is an issue.
High radiation patters extend over most of the area, and 11 uranium occurrences
have been identified along a linear feature over around 30km.
Uraniferous alaskite samples have yielded assay results ranging from 0.09% to
0.472% U3O8. Southern Sphere Uranium investigated the region in 1980, and a
report by Swanson concluded that there is extraordinary high background
uranium content within the alaskite examined and that the area could be have
economic potential.
Houms River (Warmbad) – Sample Results
U3O8 ThO2 Counts U/Th
No % ppm Material Per sec Ratio
1 0.095 70 Alaskite 400 14:1
2 1.400 10 Quartz vein 8000 1400:1
3 0.324 10 Alaskite 2000 324:1
4 0.009 30 Alaskite 150 3:1
5 0.472 260 Alaskite 1500 18:1
6 0.060 200 Alaskite 750 3:1
7 0.029 15 Alaskite 250 19:1
8 0.051 10 Alaskite 350 50:1
The company feels that this is a Rossing type occurrence and there is a good
likelihood of an equivalent with several possible economic ore bodies. A further
benefit to the license area is the nearby Orange River which would provide a
ready source of water for an operation. The exploration program includes:
-Checking of all uranium anomalies and ground sampling program.
-Completed 23,000 line km helicopter radiometric survey.
-Drilling commenced since October 07.
-Log all boreholes with calibrated radiometric logging system to estimate
equivalent uranium grades. Assay RC chip samples.
-Obtain estimates of possible tonnages and grades for the deposits.
Aus/Garub Uranium project
Located to the North of Warmbad, the Xemplar feels that the licence area of
3,276km2 has the potential to host a Langer Heinrich type deposit. The area has
extensive calcrete deposits some of which contain uranium weathered from
granite intrusions. A radon survey is scheduled to locate mineralised areas.
The exploration programme includes:
-Detailed interpretation of all data.
-A large scale radon survey over the entire property has been completed.
-Testing of anomalies by drilling and trenching.
-Log all boreholes with calibrated radiometric logging systems to estimate
equivalent uranium grades. Assay RC chip samples.
-Obtain estimates of possible tonnages and grades for the deposits.
-Begin work on the Garub Uranium project
Cape Cross
Towards the North of Namibia in an area that was previously explored in the late
70s, Xemplar has secured a license area of 3,855km2. Prospecting has been
directed at secondary uranium mineralization associated with calcrete palaeo
channels.
An anomalous uranium zone running across the license area with a strike length
in excess of 60km has been identified. There are also other areas that are clearly
mineralized within the property that have yet to be examined. Radon surveys are
to be carried out over sand and calcrete areas within the license area.
The exploration program includes:
-Interpretation of airborne radiometric data has been completed.
-Carry out a large scale radon survey over the entire property, first results
have been received.
-Testing of anomalies by drilling and trenching.
-Log all boreholes with calibrated radiometric logging system to estimate
equivalent uranium grades. Assay RC chip samples.
-Obtain estimates of possible tonnages and grades for the deposits.
Uraniferous Alaskitic Bodies
Orange River
Aluriesfontein
Sandfontein-North
Gaobis
Energy Ridge
Big Yellow
Gaidip-Sandfontein-SW
Kink
Leopard Trap
Houms River
Girtis-One
Girtis Two
Gaidip-Sandfontein-NE
Engo Valley
To the far Northwest of Namibia within an EPL of 1,239km2, historical information
has identified an ore reserve of approximately 6mt at 0.04% U3O8. Considerable
drilling is necessary to prove these reserves.
The company believes that the source of the uranium mineralization is from
tectonic granites. The exploration target is mineralized sandstone belonging to
the Dwyka and Engo formation. Xemplar is considering the potential for an In Situ
Leach (ISL) type operation.
The exploration program includes:
-All historical borehole and sampling data has been acquired.
-Airborne and geophysical data has also been acquired.
-Data gathered so far has been interpreted.
-A large scale radon survey over the entire property is to be carried out.
-Drilling of all radon anomalies will follow.
-Log all boreholes with calibrated radiometric logging system to estimate
-Equivalent uranium grades. Assay RC chip samples.
-Obtain estimates of possible tonnages and grades for the deposits.
By Charlotte Mathews
08 Jan 2008 at 08:55 AM GMT-05:00
JOHANNESBURG (Business Day) -- Diversified global mining group Rio Tinto [NYSE:RTP; LSE:RIO; ASX:RIO], the target of a merger proposal from rival BHP Billiton [NYSE:BHP; LSE:BLT; ASX:BHP], could be preparing an offer for Namibian uranium explorer Xemplar Energy Corp. [TSX-V:XE], London-based investment group Fairfax analyst Marc Elliott said yesterday.
Other potential bidders for Xemplar - which is listed on the Toronto venture capital, Frankfurt and Namibian stock exchanges - could include Areva or a Chinese company, he said.
Rio Tinto spokesman Nick Cobban said Rio Tinto had no comment to make. “We never comment on market rumour or speculation,” he said.
Xemplar’s main asset is its Warmbad property in Namibia, which is on the southern border with South Africa, where it believed it had “effectively discovered a new uranium province”, it said last month . It has identified 14 large deposits close to the surface in an area about 40 kilometres by 28 kilometres, and this month it will step up its exploration activities with the arrival of two more drill rigs.
Elliott said the company could be valued as highly as $6 billion after positive exploration results and the publication of a feasibility study and resource statement.
Xemplar’s market capitalisation is about C$737 million ($736 million). Its shares have soared more than sixfold from C$1 in August to C$6.75 yesterday.
Xemplar was the largest holder of uranium licences in Namibia, and the Warmbad property could host the world’s single biggest uranium deposit, Elliott said. Xemplar’s significant land holdings made it an attractive acquisition target and world-scale uranium deposits were needed by major mining companies before they could enter into supply contracts.
Rio Tinto owns the Rössing uranium mine in Namibia, which made a profit of N$304 million ($44 million) in 2006.
The life of the mine was recently extended to 2016, but plans are under way to extend this to 2021, according to the company’s website.
Rio Tinto’s other assets in southern Africa include copper mine Palabora Mining, a mineral sands operation, Richards Bay Minerals, and the Murowa diamond mine in Zimbabwe.
About 4% of its operating assets are in Africa.