Uranium focus turns to Tanzania

The Mantra share price has trebled over the past year on the ASX bucking the markedly weaker trend which has hit the junior mining sector in general and uranium juniors/explorers in particular.

Uranium stocks have been hit across the board by the drop in the spot price of uranium oxide over the past year from levels above $100/lb to current levels around $57/lb.

Mantra joint MD Matthew Yates said in Johannesburg today an "aggressive" drilling campaign will continue at Mkuju River with three rigs operating on site by next month. A resource estimate for the project is scheduled to be ready by the end of this year.

Yates also said he is targetting initial production from Mkuju River during 2010 after completing a scoping study by the end of 2008 at which point the bankable feasibility study will start.

Asked whether that timetable seemed overly optimistic Yates replied, "I like a tight timetable. I think this is do-able.

"We should be able to get that mine built within a year of the start of construction because it's a simple mining proposition with low stripping ratios. The mineralisation is hosted within three key horizons.

"We will target the shallow horizons. The host rock is soft, barely consolidated sandstone. We reckon we can mine that with scrapers and will not have to drill and blast."

MDM Engineering has been appointed as the manager for the scoping study while South African investors should recognise one other name linked to Mantra at this stage.

That's Colin Steyn, the former CEO of LionOre which was taken over last year by Norilsk Nickel, who is a non-executive director of Mantra.

Yates said Mantra was focussing its attention on developing Mkuju River but added the company had a string of other mineral rights covering uranium, gold and base metals in southern Tanzania as well as parts of Malawi and northern Mocambique.

Pro-mining government

These other projects included "advanced prospects and a suite of satellite targets within the Mkuju River project area".

Mantra also controlled another major project nearby at Nyota which lay inside Tanzania's Selous game reserve and is currently being drilled.

Yates said the Tanzanian government was both pro-mining and pro-uranium and was providing strong support for the development of a uranium mining industry within the country.

"I think they see us as the next boom following the development of their gold mining industry. Regarding Nyota, there are no prohibitions on mining in game parks although clearly there are protocols we must adhere to," he commented.

Mkuju River is the third potential uranium mine to be looked at closely in central Africa during the past two years.

In February 2007 Paladin Energy approved the BFS for the Kayelekera project in Malawi which it is now under development at a cost of around $185m. Commissioning of the mine is expected early in 2009.

In September last year, Denison Mines announced a pre-feasibility study on a potential uranium mine called the Kariba project in the Zambezi Valley in southern Zambia. Capital cost was estimated at $80m.

The project has since been renamed Mutanga and Denison now describes it as an "advanced stage" project and has increased the capex estimate to $100m.

- MiningMX.com

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