Star shareholders hit go button on Namibian uranium earn in

Star Minerals shareholders have voted through the company’s proposed joint venture (JV) agreement to earn up to 85 per cent of the Cobra uranium project in the world-class Erongo district of Namibia.

The project lies just 5km from Rossing, the world’s longest running uranium mine and is surrounded by further world-class operations including the Husab mine (previously the Rossing South mine) and Paladin Energy’s Langer Heinrich project.

The farm in deal with Canadian-listed Madison Metals allows Star to earn an initial 51 per cent controlling stake in Cobra by investing US$3.95 million (A$6.17 million) across three years, with the opportunity to further increase its ownership to 85 per cent.

Management says the project has permits in place to immediately get drilling on an initial six-hole program.

The initial work programs – which it aims to kick off in January - will evaluate the strike potential and the twinning of some existing holes that make up the non-Jorc uranium estimate.

The Cobra project has a non-JORC resource of about 15.6 million tonnes at a grade of 260 parts per million (ppm) for 9 million pounds of uranium oxide.

The shareholder vote comes at a time when the historically lower-grade resource is experiencing a second wind on the back of continued stellar prices for the yellow uranium metal of over US$77 (A$121) per pound.

The project in the uranium-rich Erongo region – colloquially known as Africa’s “Uranium Central” - will be overseen by one of the company’s existing African experts in director Ashley Jones.

Jones has considerable experience in uranium exploration – particularly in Africa - having previously worked in Namibia for nearly three years and on the Letlhakane uranium project in Botswana for nearly five years.

Star says Jones will be promoted to executive director with shareholder approval.

Star is excited following shareholder approval... allowing the company to earn into the Cobra project with Madison Metals. The exploration team has reviewed drill planning to begin further exploration activities at the project in order to progress towards resource definition drilling as soon as possible.

Cobra features some 297 square kilometres of uranium-rich radiometric anomalies.

It was thrown up originally by a historic 50-hole drill program that intersected thick uranium mineralisation, including 60m at 333ppm uranium oxide with a 10m section grading as high as 732ppm uranium oxide.

Other promising intercepts to be followed up showcased a 9m chunk going 636ppm with a 5m section at 1037ppm and 14m coming in at 360ppm with 3m showing 836ppm.

Notably, the recorded mineralisation and resource at Cobra predominantly started within 12m of the surface and ran no deeper than 100m, indicating the potential open-pit nature at the project.

Under the three-stage earn in agreement, Star must pay a total of US$1.9 million (AU$2.97 million) in cash and shares, nearly 6.7 million in performance shares and spend US$2.425 million (AU$3.80 million) on exploration over the first 36 months of the agreement.

By 2027, Star will secure its 51 per cent stake in the project and then have the option to push forward to a final 85 per cent controlling stake.

Star says it intends to fund the expenditure by a toll treatment gold scenario at its Tumblegum South gold project, 40km south of Meekatharra in WA.

The plan is to cash-in on record gold prices and an existing 255,000t resource grading 2.16 grams per tonne gold at the project. Management says it will likely generate some $19.6m through an open-pit mining scenario by a third-party toll treater.

Nuclear has recently earned political status a “green” energy as it creates massive amounts of energy for little-to-no emissions and a reliable strong supply of base-load power to heavy industry.

Star’s entry into one of the world’s premier uranium districts appears to be well timed given its existing management experience and a long-term focus on the growing demand for the sometimes controversial yellow metal.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au