en.Wedoany.com Reported - Elevate Uranium (ASX: EL8; US-OTC: ELVUF) will increase its stake in Namibia's Marenica uranium project by 15% through an acquisition, raising its control over the project to 90%. The company is also testing its processing technology to assess the potential for reducing future mine costs.
The Marenica project hosts 134.5 million tonnes of ore grading 180 parts per million (ppm) of uranium oxide (U3O8), containing 52.8 million pounds of uranium. Upon completion of the transaction, Elevate will gain 47.5 million pounds of attributable uranium. The project is located in central Erongo, a mature uranium mining district, approximately 200 kilometers west of Windhoek. This deal will increase Elevate's resource base in Namibia to 124 million pounds, with total global resources reaching 181 million pounds.
Managing Director Murray Hill, citing last month's resource update, stated that Marenica has achieved multiple successes in JORC resources this year, with grades nearly doubling and size increasing by 31% to 52.8 million pounds of U3O8. Increasing ownership means more upside, and the upcoming pilot plant results will directly benefit shareholders.
This transaction follows a period of frequent consolidation in the uranium industry. Previously, Paladin Energy (ASX: PDN; US-OTC: PALAF) completed its acquisition of Fission Uranium in December, and Uranium Energy (NYSE-A: UEC) acquired Rio Tinto's (ASX, NYSE, LSE: RIO) Sweetwater plant and Wyoming uranium assets in the same month.
Elevate is working to position the project as a development case within a proven uranium belt. The Marenica and nearby Koppies projects provide the company with a sufficiently large regional portfolio to test its U-pgrade process on multiple ore types, and a larger stake allows shareholders to share in any success from the pilot plant.
The Sydney-listed company fell 6% in early trade on Tuesday to A$0.23 (C$0.22), with a market capitalization of A$107 million. Its 12-month trading range is A$0.22 to A$0.50.
In terms of transaction terms, Elevate expects to complete the acquisition by the end of July. It will purchase a 5% stake in Marenica Minerals (the private company holding the project) from Millenium Minerals and a 10% stake from Xanthos Mining. Xanthos will retain a 10% free-carried interest.
The company will pay A$1.1 million in cash to Xanthos, issue Elevate shares worth A$2.2 million, split equally between the two sellers, and cancel A$3.4 million in debt owed by Millenium. The share payment will be priced at Elevate's volume-weighted average price over the five days prior to transaction completion and will be issued from its existing placement capacity.
In terms of processing tests, Marenica ore is the basis for Elevate's U-pgrade pilot plant work this year. The company developed this beneficiation process for Marenica mineralization and stated it is currently testing bulk samples from the updated resource to determine processing parameters for subsequent studies. Laboratory-scale tests have supported the process, but the pilot plant remains a critical test. Elevate stated that the U-pgrade process aims to remove most non-uranium waste before leaching, upgrade ore grade, and reduce plant size and reagent consumption compared to conventional processing.
Koppies is Elevate's other flagship asset in Erongo, hosting 186.2 million tonnes of ore grading 186 ppm U3O8, containing 76.2 million pounds of uranium. Koppies and Marenica together form one of the largest undeveloped uranium deposits in the region, which already has mines, power, roads, and export routes through Walvis Bay. Namibia has produced uranium for nearly half a century, hosting the Rössing mine controlled by China Uranium Corporation, Swakop Uranium's Husab mine, and Paladin Energy's Langer Heinrich mine, providing developers with deeper technical, contractor, and infrastructure resources than most uranium jurisdictions.
