REG - Neo Energy Metals - Asset Valuation underway on Beisa Uranium Assets

Neo Energy MetalsAnnouncement

30/12/2024 07:00

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RNS Number : 5687R  Neo Energy Metals PLC  30 December 2024

Neo Energy Metals plc / LSE: NEO, A2X: NEO / Market: Main Market of the London
Stock Exchange

 

30 December 2024

Neo Energy Metals plc

('Neo Energy' or 'the Company')

 

Commission of New Independent Valuation Reports for the Beisa Uranium and Gold
Project

Neo Energy, the near term, low-cost uranium developer, is pleased to announce
the commissioning of independent mineral resources valuation and mine, shaft
and processing plant, and associated infrastructure reports for its strategic
uranium assets comprising, Beisa North, Beisa South and Beatrix 4 Shaft (incl.
Beisa Uranium Mine), located in the Witwatersrand Basin, in the Free State
Province of South Africa ("the Beisa Uranium and Gold Project").

This independent valuation will adhere to the standards of the South African
Mineral Valuation (SAMVAL) Code.

The updated report for the Beisa North and Beisa South Uranium Projects will
build upon the earlier SAMVAL-compliant, 'Independent Valuation of the Gold
and Uranium Assets on Sunshine Mineral Resources'. This was completed in
September 2023 by an Independent Competent Person and focused on the total
SAMREC Code compliant inferred resources of 90.2 million pounds ('Mlbs') of
U₃O₈ and 4.2 million ounces ('Mozs') of gold. The 2023 report provided a
'preferred' and 'fair' valuation of Beisa North and South of US$85.4 million,
based on just 46.02 Mlbs or 51% of the total uranium resources and 1.54 Mozs
or 37% of the total gold resources.

The report for the Beatrix 4 Shaft and the Beisa Uranium Mine, will comprise
the valuation of the following asset classes:

·       the total measured and indicated resources of 26.8 Mlbs of
U₃O₈ and 1.2 Mozs of gold,

·      the Beatrix 4 underground mine and shaft complex (four shafts and
existing development to access resources of down to 2.3km across the entire
Beisa Project area), including additional mining infrastructure such as
headgears, winding systems, primary ventilation etc.

·      the Beisa Uranium Mine, uranium and gold processing plant
facilities, office blocks and training centers, workshops and stores, lamp
rooms, change houses and accommodation,

·       the current surface rights, infrastructure and land, including
installed utilities and usage rights.

All the above is fully permitted and has been on care and maintenance since
2023.

The independent valuation reports will reflect current market dynamics and the
increased prevailing uranium and gold price environments, as well as the
intrinsic value of the assets relative to a greenfield installation.  Once
complete the Company will have a full independent valuation for the combined
assets which comprise the Beisa Uranium and Gold Project.

This work is being completed in parallel with the Company's engineering and
design work that is underway, for the re-commencement of uranium and gold
mining operations at the Beisa Uranium and Gold Project. This includes the
appointment of contractors to complete any refurbishment and upgrade work to
the Beatrix 4 shaft complex, the installation of a uranium processing plant
alongside the refurbishment of the existing gold plant at the Beisa Uranium
Mine and key appointments for the underground contract mining and mine
equipping work. The updated development plan for the Beisa Uranium and Gold
Project is scheduled for release later in 2025 and will incorporate mining
operations extending into the Beisa North Uranium Project.  This will include
a preliminary assessment of the economic viability of reprocessing any of the
estimated 40 million tonnes of gold and uranium tailings currently on site.

Highlights:

·      Independent consultants to complete new updated independent
valuation reports on the Beisa Uranium and Gold Project in Q1 2025

·      Reports to be prepared in accordance with South Africa's SAMVAL
Code

·    Valuation reports will be completed on the total measured, indicated
and inferred SAMREC Code compliant inferred resources of 117.0 Mlbs of
U₃O₈ and 5.4 Mozs of gold contained in the Beisa North and Beisa South
Uranium Projects, and the Beatrix 4 Shaft and the Beisa Uranium Mine

·     Asset valuation and assessments report will also be completed on
the Beatrix 4 underground mine and shaft complex, headgears and winding
systems, primary and secondary ventilation shafts and infrastructure, the
Beisa Uranium Mine ore and gold processing plant facilities, office blocks and
training centers, workshops and stores, and land acquired as part of the
transaction.

·     The valuation reports will provide the Company with a detailed
understanding of the operational and strategic value of the uranium and gold
resources and underground mining and ore processing assets and associated
infrastructure that have now been consolidated following the Company's
acquisitions of 100% interests in these assets from Sibanye-Stillwater Limited
and Sunshine Mineral Reserves Pty Limited

·     The asset valuation and assessment reports of the Beatrix 4
underground mine and shaft complex and the Beisa Uranium Mine ore processing
plant and infrastructure will also be used, by auditors and insurers, to
update the Company's financial position, to incorporate the major resource,
plant and equipment asset acquisitions.

·    The 2023 SAMVAL-compliant valuation report on the Beisa North and
Beisa South Uranium Projects provided the following uranium valuations based
on a US$53/lb uranium price

 Market Category   SAMVAL - Compliant Uranium Valuation
                   Value US$/lb  Mlbs U₃O₈      Value US$ M  Value ZAR M
 Downside          0.9           46.02          41.4         753.8
 Preferred / Fair  1.8           46.02          82.8         1,507.6
 Upside            2.7           46.02          124.3        2,261.4

 

·      This valuation was based on just 46.02 Mlbs or 51% of the total
uranium resources at the Beisa North and Beisa South Uranium

·     Uranium prices have averaged US$82.2/lb in 2024, an approximately
55% increase on the uranium prices used in this 2023 valuation report.  Over
the same period the gold price has risen from $2050 to over $2620 per ounce,
an increase of almost 28%.

·    The Company believes that the significantly improved uranium and gold
prices, combined with their robust market outlooks, will have a significant
impact on the findings in the independent valuation reports of the resources
contained in the Beisa Uranium and Gold Project

·      These valuation reports will be completed in Q1 2025, with the
key findings and results then released to the Company's shareholders and
available on the Company's website

·      The engineering and design work for the re-commencement of
uranium and gold mining activities at the Beisa Uranium and Gold Project is
being completed in parallel with these valuation reports

·      The Company anticipates that it will release the operating and
financial results from its development plan for the Beatrix Uranium and Gold
Project later in 2025, with production targets of between 1-3 Mlb of uranium
and up to 100,000zs of gold production annually over an initial 20-year mine
life.

Neo Energy Metals Chief Executive Officer Sean Heathcote said,

"The completion of the integrated valuation of the entire Beisa Uranium and
Gold Project will go a long way to illustrate the sheer scale and significance
of the Project in the global uranium market.

To provide a simple resource comparison, the intrinsic in-situ value of
probably the world's largest undeveloped uranium deposit, the Rook I project
(including Arrow and any closely accessible resources) owned by Canadian
listed NexGen Energy Ltd (NXE: Market Capitalisation of £3.08 Bn) is £14.29
Bn at the prevailing uranium spot price, on a deposit that is still in the
process of permitting and development.  Whereas, the Beisa Uranium and Gold
Project has an intrinsic in-situ value of £6.52 Bn for uranium and £11.17 Bn
for the gold resources (Total £17.69 Bn), with immediately stoppable ore, and
deposits that are all accessible from an existing fully permitted multi-shaft
complex and process plant that only requires relatively minor upgrade and
refurbishment, compared to the billions of dollars of capital investment
required for Rook I.

"We look forward to sharing the results of the independent asset valuations
with the market, to show the true value being created by the Company in the
uranium resource space."

This announcement contains inside information for the purposes of the UK
Market Abuse Regulation, and the Directors of the Company are responsible for
the release of this announcement.

END

About NEO Energy Metals Plc

Neo Energy Metals plc is a Uranium developer and mining company listed on the
main market of the London Stock Exchange (LSE: NEO).

The company and its South African Subsidiaries', namely Neo Uranium Resources
Beisa Mine (Pty) Limited and Neo Uranium Resources South Africa (Pty)
Ltd have continued to strengthen the uranium portfolio through conditional
agreements for the acquisitions of; 100% interest in the Beisa North
and Beisa South Uranium and Gold Projects and 100% interest in the Beatrix
4 mine and shaft complex, the processing plant complex and associated
infrastructure in the Witwatersrand Basin, located in the Free State Province
of South Africa. The combined projects total SAMREC Code compliant resource
base comprises, 117 million pounds of U₃O₈ and over 5 million ounces of
gold.

Additionally, the Company holds up to a 70% stake in the Henkries Uranium
Project, an advanced, low-cost mine located in South Africa's Northern Cape
Province and a 100% interest in the Henkries South Uranium Project,
extending the Henkries Project's strike length by 10km to a total of 46km of
shallow paleo-channels proven to host uranium mineralisation through extensive
drilling and feasibility studies backed by US$30 million in historic
exploration and development expenditure.

The Company is led by a proven board and management team with experience in
uranium and mineral project development in Southern Africa. Neo Energy's
strategy focuses on an accelerated development and production approach to
generate cash flow from Henkries while planning for long-term exploration and
portfolio growth in the highly prospective Uranium district of Africa.

The Company's shares are also listed on the A2X Markets (A2X: NEO), an
independent South African stock exchange, to expand its investor base and
facilitate strategic acquisitions of uranium projects, particularly within
South Africa.

For Enquiries Contact:

 Jason Brewer                Executive Chairman                         jason@neoenergymetals.com
 Sean Heathcote              Chief Executive Officer                    sean@neoenergymetals.com
 Faith Kinyanjui             Investor Relations                         faith@neoenergymetals.com
 Michelle Krastanov          Corporate Advisor SA - AcaciaCap Advisors  michelle@acaciacap.co.za

 Tel: +27 (0) 11 480 8500

 

 

 

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