MARENICA ENERGY Y - SRK Consulting UK

MARENICA ENERGY
www.marenicaenergy.com.au

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Maren

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ica marks the Spot

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In 1976, the first commercial uranium mine in Namibia opened.
Fast-forward to the present, and the World Nuclear Association
predicts a 33 per cent increase in uranium demand between 2010 and
2020. Today, Namibia remains supportive and encourages uranium
mining within the country. Perhaps then, it comes as no surprise to
see that those in the know are doing exactly that.

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Meet Marenica Energy of Perth, Australia,
formally West Australian Metals prior to the company’s
name change last year. This promising
exploration company is focused on uranium in
Namibia’s famed Damara Province.
“We changed the name late last year to
Marenica Energy in order to emphasise the focus
on our Marenica Deposit,” John Young, CEO says.
“Prior to that, the company was called West
Australian Metals and, although we have two
West Australian projects, our main focus has remained
in Namibia.”
With over ten years experience spent as an
ASX-listed company, Marenica turned its attentions
to Namibia in late 2006 with the company’s
acquisition of the Marenica Deposit, a
527-square-kilometre site nestled promisingly
amongst a number of established uranium producing
sites.
Prime positioning in Namibia
Young says that the Marenica Deposit is advantageously
positioned 70 kilometres inland and
about 100 kilometres from Swakopmund, a small
town on the West Coast of Namibia. It is also positioned
close to good infrastructure some at the
nearest major port, Walvis Bay.
“The project is adjacent to other uranium
operations which are only 70 kilometres north of
Rossing (Rio Tinto). Rossing has been operating
as a uranium mine in Namibia for over 30 years,”
he says.
“There is another major project underway
called Trekkopje, which is majority-owned by
Areva. There are many significant uranium projects
in Namibia, which is a world class area as far
as uranium discoveries are concerned.”
The company acquired the Marenica deposit
from a local prospector who today retains a 20
per cent share of the project, the other 80 per
cent of which is held by Marenica Energy.
The Marenica deposit was discovered in the
late 70s and early 80s by Gold Fields of South
Africa and has amassed a good drilling history
during this time, allowing for the resource to be
well-outlined within the project area.
With such a group of established neighbouring
projects in this uranium hotspot, and the
history of interest in the Marenica project area
itself, Young explains the existing infrastructure
surrounding the project.
“There are good tarred and unsealed roads
and an accessible power grid, but the main issue
for Namibia is a good supply of fresh water,” he
says. “Areva have constructed a large desalination
plant on the coast as part of the infrastructure
required for their development, which may
also be able to supply other operations with fresh

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water in the future. Their initial start-up is something
like 25 million cubic metres of water a year.”
Young says that with all of these factors
considered, uranium exploration and project development
in Namibia is not as difficult as it may first
appear to be.
Namibian support
Young says that the local Namibian mining industry
is very supportive of foreign investment in
the country. “There’s Areva, the French nuclear
utility company, located close to us at Trekkopje,
and other Australian miners and explorers such
as Paladin Resources, Bannerman Resources,
Deep Yellow and Extract Resources. There’s
also a long history of Chinese investment in construction
in Namibia,” he says.
“The government like to see local employment
and local education and involvement from
Namibian companies. That is one of their priorities.
Recently, the government of Namibia created
a state-owned mining company to take part
in future mine developments for the benefit of
all Namibian people and, as an Australian com-

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pany operating in Namibia, we are very supportive
of the idea.”
Other Namibian priorities include broadbased
black economic empowerment and community
support, which Young explains is why
greater involvement with local Namibian companies
is encouraged.
“As an employer, we have seven local Namibian
people employed there (at the Marenica deposit),”
Young says.
“We also have a small expatriate team, and
their job is not only to control the operations on
the ground, but also to train and educate local
people to eventually take their positions and
move up the ladder in the company. Those are
some of the things we try to do as a small exploration
company.”
Marenica appears to be well on the way to creating
a balance where both country and company
support one another in a mutually beneficial way
of working, investing and educating.
The Marenica project today
Young says that to date, Marenica has completed
over 35,000 metres of RC drilling and over 1,000
metres of diamond drilling within the project area.

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“In mid-2008, the company defined an
inferred resource of 34 million pounds of contained
uranium. We have been improving the
quality of project from there, completing another
14,000 metres of infill drilling and metallurgical
work,” he explains.
“We’re just about to launch into a scoping
study which will look at the best economic
outcome for the project. Currently we have
indicated and inferred resources totalling around
38.6 million pounds. By the end of January, we’ll
have a resource update out which will upgrade
that number.”
The company’s short term plan is to bring
the Marenica project into production, and young
says that the scoping study, due for completion
at the end of the first quarter/start of the second
quarter this year, will inform the company as

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to the economical viabilities of the project and
where to go from there.
“We have 550 square kilometres of exploration
ground which we’re endeavouring to explore
more fully in 2010, and of course any new discovery
within our project area could potentially
add years to our mine life for the Marenica
deposit,” he says.
“We have a strong shareholder base with
around 65 per cent of our shares held by the top
20 shareholders. Recently, Areva NC has taken
a 10.57 per cent interest in Marenica. Now with
Marenica located only 30 kilometres from Areva’s
Trekkopje operation, we will certainly be looking to
develop our relationship with Areva.”
The Marenica deposit is set to benefit all. From
the shareholders to the locals being trained on
the project, this is an ideal example of a potential
uranium operation situated in prime Namibian
uranium real estate.
“We have a deposit which is shallow, easily
mined, easily processed, close to key infrastructure
and at our current share price the company is
pretty much undervalued. My role in the short term
is to get a positive scoping study to enhance the
value for our shareholders and to define the pathway
to development.”
The first half of 2010 and beyond looks very
exciting for Marenica Energy.
www.marenicaenergy.com.au

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OF THE INTERNATIONAL RESOURCE JOURNAL