By: OrePulse

Bannerman Energy and CNNC Overseas, a unit of the Chinese state-owned China National Nuclear Corp, took a final investment decision to build the $353 million Etango uranium project in Namibia's Erongo region, the companies said. Construction funding was put in place without project debt, and the partners are targeting first production in 2028, roughly two years after the decision was made.

Gavin Chamberlain, Bannerman's chief executive and managing director, said in a statement that the decision formally commits the joint venture that owns Etango to full-scale construction. He described the milestone as "the culmination of more than two decades of exploration, study and disciplined de-risking," adding that Etango was set to become "a long-life, large-scale producer in Namibia's Erongo region."

The project is held through a joint venture in which Bannerman owns 55 percent and CNNC Overseas owns 45 percent; that venture in turn holds 95 percent of Etango itself. The partners said the structure was finalized under a financing agreement reached in September, through which CNNC Overseas contributed a total of $320.4 million to the project, including $294.5 million paid directly into the joint venture.

In return, CNNC Overseas obtained the right to purchase 60 percent of everything Etango produces for as long as the mine operates, with pricing pegged to prevailing market benchmarks rather than a fixed minimum or maximum, the companies said. Bannerman will handle sales of the other 40 percent of output on its own, separately from its partner.

Once in operation, Etango is designed to yield an average of 3.5 million pounds of uranium oxide a year. The mine will be an open pit feeding a heap-leach processing circuit built to handle 8 million tonnes of ore annually, according to the project's design parameters. Namibia granted the project's mining license in December 2023, and the companies said environmental approvals were in place covering both the mine itself and its supporting infrastructure. The investment decision thus arrived nearly three years after that license was issued, following an extended period of engineering studies and project financing work.

Bannerman put Etango's pre-production capital cost at $353 million, with an accuracy range of plus or minus 10 percent. Bannerman said roughly $64 million of that sum had already gone toward early works, with about $289 million of the budget still ahead of the company before the mine reaches commercial production.

The joint venture held approximately $295 million in cash as of September 30, the companies said. Bannerman separately reported holding about A$175 million in its own accounts, an amount it said was sufficient to cover the remainder of its share of the project's working-capital needs without further contributions.

A September construction update from the companies showed work well advanced: bulk earthworks were 99 percent done, concrete pouring on the first two contracted packages had reached about 86 percent, and the initial phase of a permanent pipeline to supply the site with water was roughly 90 percent built.

Bannerman is listed on the Australian Securities Exchange and the Namibian Stock Exchange under the ticker BMN, and trades in the United States over the counter under the symbol BNNLF. Following the announcement, Bannerman's shares fell 4.2 percent to A$3.00 in Sydney trading, leaving the company with a market value of about A$748 million.

UBS kept a Buy rating on Bannerman's stock after the announcement but cut its price target by 17 percent, to A$4.39, citing dilution from the company's recent equity raisings. The bank said it regarded the Etango project as fully funded following the financing arrangement with CNNC Overseas, even as it trimmed its valuation of the shares to reflect the larger share count.