Bannerman’s Etango uranium project in Namibia. (Image courtesy of Bannerman Energy.)
Bannerman Energy (ASX, NSX: BMN; US-OTC: BNNLF) and its Chinese partner CNNC Overseas have approved construction of the Etango uranium project in Namibia, with funding secured without project debt and first production targeted for 2028.
The development is expected to cost $353 million before production and deliver an average of 3.5 million lb. of uranium oxide annually. About $64 million has already been spent on early works, leaving roughly $289 million in pre-production spending, Bannerman said in its announcement Friday. The decision moves Etango into full-scale construction after years of studies and preparatory work.
“[The FID] is the culmination of more than two decades of exploration, study and disciplined de-risking, and it formally commits the JV to full-scale construction of the world-class Etango Uranium project,” Chamberlain said in a release.
“Etango is set to be a long-life, large-scale producer in Namibia’s Erongo region, a highly established uranium province, at a time when the world’s utilities increasingly need secure, diversified supply.”
The approval follows a September financing deal with CNNC Overseas, part of China National Nuclear Corp., that secured both construction capital and a buyer for most of Etango’s output. Bannerman owns 55% of the joint venture and CNNC Overseas holds 45%. The venture owns 95% of Etango.
Bannerman shares fell 4.2% to A$3 apiece in Sydney on Friday, valuing the company at roughly A$748 million. Ahead of the construction decision, UBS retained its Buy rating but cut its price target 17% to A$4.39 to reflect dilution from recent equity raisings, FNArena reported. The bank considered Etango fully funded.
CNNC main buyer
Under the financing arrangement, the Chinese partner invested $320.4 million, including $294.5 million in the joint venture. It will buy 60% of Etango’s lifetime production on market-based terms without price floors or ceilings. Bannerman retains independent marketing rights over the remaining 40%.
The venture held about $295 million in cash at Sept. 30 to cover remaining pre-production spending. Bannerman separately held about A$175 million, which it said fully funds its remaining share of working capital through construction, ramp-up and targeted commercial production. The capital estimate carries a range of plus or minus 10%.
Etango’s approved design calls for an open pit and heap-leach operation processing 8 million tonnes annually.
Namibia awarded the mining licence in December 2023, and environmental approvals cover the proposed mine and supporting infrastructure. Bannerman’s September construction update put bulk earthworks at 99% complete. About 86% of concrete for the first two contracted packages had been poured, while the first stage of the permanent water pipeline was about 90% complete.