London-based and AIM-listed Brinkley Mining Plc – a uraniumfocused exploration and development company – has signed a framework agreement which gives it a 75% interest in the uranium projects of the Democratic Republic of Congo (DRC). The agreement is a joint venture with the DRC government, which holds the other 25%.
At a conservative estimate, the DRC uranium resources are reported to be worth at least US100 million (more than R700 million) to Brinkley, although this is regarded as merely the tip of the iceberg in such an under-explored and uranium-rich region.
In terms of the agreement, the DRC’s Atomic Energy Agency (CGEA) guarantees the Brinkley joint venture the rights to explore or mine uranium, and will procure any necessary approvals or permits required for their development. The CGEA and Brinkley have said that Shinkolobwe, Mindigi, Kalongwe, Kasompi, and Samboa will be developed immediately.
The DRC has significant areas of known uraniferous mineral occurrences. The agreement focuses on the southern Katanga region which hosts Shinkolobwe and the other deposits which occur over a 300 km strike length.
Brinkley intends to mobilise a technical team to its Lubumbashi office to focus initially on evaluating the existing drill data, and to begin field mapping to determine drilling targets for exploration. Based on the amount of historical drilling (including 40,000m of diamond drilling) and test work, the intention is to fast track a bankable feasibility study by 2009.
This initiative opens access to a known historical uranium resource of more than 11 m lbs in a prospective region that has been significantly under-explored. This figure is just a starting point, and it is likely that any resource identified through further exploration could prove to be as much as 10 times this estimate.
The framework contract provides Brinkley with unprecedented access to the DRC’s under-developed uranium resources in partnership with the government. In return, Brinkley is to provide US$1.2m (R8.5 million) to assist the CGEA and the ministry to refurbish a reactor for nuclear research and to assist in the control of radioactive mined products.
The fundamentals of the uranium market remain positive: there is a shortage of long-term sources of supply at the same time as demand is increasing from the number of nuclear power plants waiting to be constructed. Over recent years investors have been attracted to the strong gains seen in the mining sector, fuelled by booming commodity prices. This boom has definitely not missed uranium, which has experienced a 14-fold increase in price in the past six years.