A-Cap Resources Limited

Published : November 02nd, 2015

Quarterly Report & Appendix 5B – September 2015

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Quarterly Report & Appendix 5B – September 2015

Microsoft Word - 151030 A-Cap Sep-15 Quarterly Report & App 5B V5


ASX RELEASE

Friday 30th October, 2015


QUARTERLY REPORT AND APPENDIX 5B FOR THE QUARTER ENDED 30TH SEPTEMBER 2015

A-Cap Resources Limited ('A-Cap' or 'the Company') (ASX: ACB) is pleased to provide its Quarterly Activities Report for the quarter ended 30th September 2015.


HIGHLIGHTS


The Letlhakane Mining Licence Application was submitted to the Botswana Department of Mines on the 18th August 2015; Positive economics from the technical study based on forecast uranium average contract price;

Initial construction CAPEX of US$351 million and initial working capital of US$40 million; Targeting up to 3.75 million lb U3O8 p.a. over first 5 years;

Pre-Tax NPV of US$383 million at a discount rate of 8% and IRR of 29%;

Operating costs of US$35/lb U3O8 over first 5 years and approximately $40/lb U3O8 over 18 year process life.

Uranium resource upgrade completed utilising Localised Uniform Conditioning incorporating excellent results from the 2014 drilling programme;

Better grade definition at the mining scale based on using surface miners and grade control methodology; A large increase in lbs of uranium at a 300ppm cut-off;

Submission of 2015 Financial Statements, confirmation of short-term funding plan.


QUARTERLY ACTIVITIES


A-Cap reached an important milestone during the quarter ended 30th September 2015, with the Letlhakane Uranium Project's Mining Licence Application (MLA) submitted to the Botswana Department of Mines on the 18th August 2015. The feasibility work required to prepare a technical study for the MLA highlighted positive economics for the project based on a forecast uranium average contract price. A new Letlhakane uranium resource upgrade was completed, resulting in an uplift in the Project's grade, pounds and continuity, rounding off a successful period for the Company.


A-Cap's 2015 Financial Statements were finalised and released to the market at the end of September 2015, which also set out the Company's funding plan to meet its short-term working capital requirements.


LETLHAKANE URANIUM PROJECT


The Letlhakane Uranium Project is one of the world's largest undeveloped Uranium Deposits. The Project lies adjacent to Botswana's main North-South infrastructure corridor that includes a sealed all-weather highway, railway line and the national power grid, all of which make significant contributions to keeping the capital cost of future developments low.


The project has the distinct advantage of having all the major infrastructure in place and is one of the few major undeveloped uranium projects in the world capable of being in production in 3 years at a low capital cost and competitive operating costs in a safe and stable jurisdiction. The strategy is to prepare the project for early development to enable the company to fully capitalise on an expected recovery in the uranium price.

Figure 1: Location of A-Caps major projects.


Mining Licence Application, Technical Study


In August 2015 A-Cap submitted the Mining Licence application for PL 45/2004 (Letlhakane) to the Botswana Department of Mines. The application was based on the results of a technical study and financial modelling. The technical study was based on shallow open pit mining and heap leach processing to produce up to 3.75 million pounds of uranium per annum over a mine life of 18 years, incorporating the most up to date metallurgical results and process route, optimised mineral resources, mining, capital and operating costs developed by our feasibility specialists in Australia and internationally.


The technical study confirms that the Project has the right mix of a good resource, low capital and operating costs and is well positioned to be taken into early production, reaping the benefits of projected shortfalls in supply in the uranium market and forecast rising uranium prices.


The outcomes of the technical study were released to the market (refer ASX release 11th September 2015) which highlighted the following:


Positive economics based on forecast uranium average contract price Initial construction CAPEX of US$351 million

Initial working capital of US$40 million

Pre-tax NPV of US$383 million at a discount rate of 8% and IRR of 29%

Operating costs of US$35/lb U3O8 over first 5 years, approximately $40/lb U3O8 over 18 year process life.


The technical study and financial modelling was completed with the assistance and in collaboration with a world-class team of consultants including Optiro, Cube Consulting, SLR Consulting (South Africa), Kappes Cassiday & Associates, OMC Hydromet and Lycopodium Minerals Pty Ltd. The key parameters for the project are summarised in Table 1.


Project Economics Pre-tax Post-tax

NPV

$US

$383M

$240M

IRR

%

29%

24%

Pay-back period from start of production

yrs

3

3

Capital Costs

Construction

$US

351M

Working Capital

$US

40M

Inputs & Assumptions

Price of Uranium (flat price over LOM)

U3O8 US $/lb

$81

Discount rate

8%

Life of mine (LOM)

yrs

18

Project Summary

Average Mining cost

$US /lb

$18

Average Processing Cost

$US /lb

$23

$US /lb

$41

Cash Flows

Total Revenue

$US

$3,499M

Project Cash flow

$US

$841M

$539M

Table 1: Summary of outcomes of the technical study


The Technical Study results and production targets reflected in this announcement are preliminary in nature as conclusions are drawn partly from indicated mineral resources and partly from inferred mineral resources. The Technical Study is based on lower level technical and economic assessments and is insufficient to support estimation of ore reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the Technical Study will be realised. There is a low level of geological confidence associated with inferred mineral resources and there is no certainty that further exploration work will result in the determination of indicated mineral resources or that the production target itself will be realised.


Resources


A-Cap announced a new JORC Mineral Resource Upgrade at Letlhakane completed by Optiro Pty Ltd, an independent expert. The updated resource uses a recoverable resource methodology which takes into account the proposed Standard Mining Unit (SMU). The SMU is defined by the proposed mining method utilising surface miners and the proposed grade control system using in-pit surface gamma radiation measurements.


The Localised Uniform Conditioning (LUC) estimate best reflects the mining methodology envisaged, taking into account the surface miners selective mining capability combined with the proposed grade control methodology. The accurate mining characteristics of surface miners and the ability to measure the gamma radiation on the surface during mining will ensure the optimum grade delivery to the process heap. The SMU of 20m x 4m x 0.25m forms the basis for the LUC estimation. Historic resource estimations were more reflective of conventional open pit mining and therefore had averaged resource data into blocks of bigger mining panels which smoothed or averaged the grade data.


Uniform conditioning (UC) and LUC is used for assessing recoverable resources inside a mining panel when the drill spacing does not provide sufficient coverage for direct grade estimation at the SMU scale. UC provides the proportion of SMUs inside a panel that are above cut-off and its corresponding average grade. LUC takes the UC result and spatially corrects the blocks making it more suited to extraction and optimisation studies.


The new global resource estimate is as follows:


Cut-off (U3O8 ppm)

Total Indicated

Total Inferred

Global Total


Mt

U3O8

(ppm)

Contained

U3O8


Mt

U3O8

(ppm)

Contained

U3O8


Mt

U3O8

(ppm)

Contained

U3O8

100

197.1

197

85.5

625

203

280.1

822.1

202

365.7

200

59.2

323

42.2

209.7

321

148.2

268.9

321

190.4

300

22.2

463

22.7

81.6

446

80.3

103.8

450

102.9

Table 2 - 2015 Mineral resource estimates for ALL DEPOSITS at various U3O8 cut-offs


The 2014 drilling programmes targeted the early optimised shells which typically represents the earliest production potential. Previous results as reported to the ASX during 2014 (August 27th and December 15th) highlighted some of the better grade intersections which would come early on in the potential production sequence. The results of the drilling programme increased confidence in these early production areas within Letlhakane, namely Kraken, Gorgon South and Serule West. The global resource area is 14km long and 11km wide and is divided into the aforementioned main prospect areas. The Letlhakane Uranium Project is divided into prospect areas as defined in the table below:


At a 200 ppm U3O8 cut-off the resource by prospect is:


Table 3 - 2015 LUC resource estimate at 200ppm cut-off.


Recent work completed by Perth-based resource specialists Optiro on a drill spacing study comparison at the Kraken deposit confirmed that at a starting drill spacing of 200m by 200m, the change of contained metal is within +/-10% when drilled down to 100m by 50m drill spacing. The current criteria for inferred resources is nominally greater than 100m by 100m drill spacing. A-Cap has confidence that the deposit will retain its mineralisation continuity when it is further drilled out.

Read the rest of the article at www.noodls.com
Data and Statistics for these countries : Australia | Botswana | South Africa | All
Gold and Silver Prices for these countries : Australia | Botswana | South Africa | All

A-Cap Resources Limited

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CODE : ACB.AX
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A-Cap Resources is a coal and uranium exploration company based in Australia.

Its main asset in development is LETLHAKANE in Botswana and its main exploration property is MOKOBAESI in Botswana.

A-Cap Resources is listed in Australia. Its market capitalisation is AU$ 77.6 millions as of today (US$ 56.0 millions, € 49.1 millions).

Its stock quote reached its highest recent level on January 21, 2011 at AU$ 0.75, and its lowest recent point on March 27, 2020 at AU$ 0.01.

A-Cap Resources has 871 880 000 shares outstanding.

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Corporate news of A-Cap Resources Limited
8/1/2016Appendix 3B – New issue announcement
7/12/2016Trading Halt
7/6/2016Convertible Note Agreement
5/18/2016Approval of Letlhakane Environmental Impact Statement
4/29/2016Quarterly Activities Report & App 5B Mar-16
4/26/2016Appendix 3B: New issue announcement
2/1/2016Quarterly Report & Appendix 5B
2/1/2016Expiry of Unlisted Options
12/17/2015Expiry of unlisted options
11/2/2015Quarterly Report & Appendix 5B – September 2015
10/16/2015Expiry of Unlisted Options
10/16/2015Annual Report 2015
9/14/2015Mining Licence Submission & Technical Study Outcomes
9/1/2015A-Cap Change of Address and Contact Details
8/12/2015June 2015 Quarterly Report & Appendix 5B
7/8/2015Company Secretary Appointment and Resignation
7/7/2015Changes to the Board of Directors
6/16/201511.06.2015 – Resignation of Director
6/10/201503.06.2015 – Form 604 Change of Interests of Substantial Sha...
4/1/2015Despatch of Prospectus and Entitlement Forms to Eligible Sec...
3/26/2015Half Year Report 31 December 2015
3/26/2015Despatch of Notice to Eligible Security Holders
3/26/2015Expiry of Unlisted Options
3/26/2015Prospectus for a Non Renounceable Rights Issue
3/10/2015Delay in Non-Renounceable Rights Issue Documentation
2/27/2015Non-Renounceable Rights Issue to Raise $4 million
2/2/2015December 2014 Quarterly Report and Appendix 5B
12/15/2014High Grade Uranium Mineralisation
12/9/2014JORC Compliant Coal Resource at Foley
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