Star Minerals moves into uranium elephant country

Star Minerals is firing up the drills to progress the Cobra uranium project in Namibia after sealing its earn-in agreement.

Junior explorer inks earn-in at large Namibian project. Pic: Getty Images

• Star Minerals has signed an earn-in agreement to acquire up to 51% of the Cobra uranium project in Namibia by spending US$3.95 million over three years.

Special Report: Star Minerals is firing up the drills to progress the Cobra uranium project in Namibia after sealing its earn-in agreement with Madison Metals.

• Cobra currently has a foreign equivalent resource estimate of 15.6Mt at 260ppm uranium oxide (U3O8) for 9 million pounds of U3O8, and is located within 25km of the two largest operating uranium mines in Namibia.

• Star plans to grow the highly prospective project by first ensuring JORC compliance then upgrading the resource estimate.

Following the announcement of the farm-in and joint venture to acquire up to 51% of the project from the Canadian listed company last Thursday, Star Minerals (ASX:SMS) is now planning to upgrade the project’s resource estimate.

This stands at an already significant 15.6 million tonnes at a grade of 260 parts per million for 9 million pounds of uranium oxide, and Star aims to grow this in the near term.

The first step towards this goal will be some confirmation holes and modelling to ensure the project complies with the latest JORC standards. The resource is currently designated as a foreign equivalent estimate after its compilation by SRK Consulting (UK) in 2015 to JORC 2012 standards.

To tick this box, Star already has permission to drill at least six holes at the huge 297km2 tenement and has more targets lined up at the project.

Director Ashley Jones has several years’ experience in Namibia and at the huge Letlhakane uranium project in neighbouring Botswana.

He is confident of growing the project given its historic drill results, and that mineralisation is still open at depth and along strike to 1.5-2km in highly prospective territory.

Pounds in the ground

Cobra, only 10km from Rossing is one of the world’s largest uranium deposits and longest-operating mines, as well as being within 25km of the globally significant Husab mine and in the same region as the Langer Heinrich mine, placing it firmly in uranium elephant country.

Notable historic drill intercepts from Cobra include: 60m at 333ppm uranium oxide (U3O8) from only 6m, including 10m at 732ppm U3O8 from 38m; and 7m at 971ppm U3O8 from 38m, including 2m at 2,883ppm U3O8 from 38m.

“It’s a very attractive entry to pounds in the ground for Star,” Jones says. “Cobra was drilled in 2015, post the last uranium boom in 2006-2008, and since then the uranium price has been depressed so it hasn’t really been explored.

“It’s a huge tenement, it’s all prospective geology, and it’s close to roads, a deep water port and international airport, so it’s a big growth opportunity for us.”

Jones says Namibia, which accounts for approximately 11% of global uranium production, is a great place to mine uranium due to the supportive and stable government.

“We are also buoyed by excellent long-term fundamentals for uranium and its role as a sustainable and carbon free energy source for the future,” Jones says.

How the earn-in works

Under the agreement, Star can earn itself a 51% stake by spending US$3.95 million over three years, including staged progress payments to Madison.

The exploration spend requirement for the first year is US$750,000 and up to US$2.425 million over the three years, with the agreement subject to a minimum A$2 million capital raising.

Star will be the operator of the project and work with Madison, which has an experienced team based in Namibia.

Scope at Tumblegum

Meanwhile, Star will continue to advance its efforts to monetise the Tumblegum South Gold Project following the update of the positive Scoping Study in April this year for open-pit mining and third-party toll treatment.

The project in Western Australia’s Goldfields hosts a Mineral Resource of 616,000t at 2.28 grams per tonne (g/t) gold for a total of 45,000oz of contained gold and includes an Indicated Mineral Resource of 337,000t at 2.52 g/t gold for 27,000oz of gold.

The company also plans to add value to its highly prospective West Bryah copper gold Project in Western Australia.

This article was developed in collaboration with Star Minerals, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

Originally published as Star Minerals moves into uranium elephant country