Resource Capital Fund VI (RCFVI) have agreed to provide a A$4 million convertible note facility to support the construction and operation of Bannerman Resources’ pilot plant at the Etango uranium project in Namibia.

“The continued support of RCF as a strategic cornerstone investor in Bannerman, through the existing investment of RCFIV and the proposed new investment by RCFVI, is a beneficial and positive progression of its investment in Bannerman. RCFVI is expected to still be in the early stages of its life cycle when the financing of the future development of the Etango project is required,” the company said in a statement.

Bannerman considers the pilot plant to be a cost effective way of further de‐risking the Etango project by confirming the definitive feasibility study assumptions, demonstrating the viability of the heap leaching concept to potential development partners and financiers and progressing towards the detailed engineering stage.

“These outcomes should maintain the Etango project’s early mover advantage in a strengthening uranium price environment,” Bannerman said.

During the March 2014 quarter, Bannerman maintained its focus on cash preservation and activities that will enable fast tracking a commitment to the development of the Etango project in a rising uranium price environment.

There is growing awareness that, as positive developments continue to occur on the demand side, the looming supply shortfall will require a doubling of the uranium price to at least US$70/lb U3O8 to incentivize new supply.

Bannerman’s advanced Etango Project remains one of the very few globally significant uranium projects that can realistically be brought into production in the medium term.

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