Star Minerals and Madison Metals Form Joint Venture on Cobra Uranium Project
STAR MINERALS LIMITED (SMS) Share Update September 2024 Wednesday 18th
Star Minerals Enters Joint Venture for Namibian Uranium Project
Star Minerals Limited (ASX: SMS) has announced a significant partnership with Madison Metals Inc. (CSE: GREN) to develop the Cobra Uranium Project in Namibia. This agreement marks a major step forward for Star Minerals as it aims to expand its portfolio and capitalize on the growing demand for uranium.
Instant Summary:
- Star Minerals and Madison Metals enter an Earn In and Exploration Rights Agreement for the Cobra Uranium Project.
- Star can earn 51% by spending USD$3.95 million over three years.
- The Cobra Project has an estimated 15.6Mt at 260ppm U3O8 for 9M lbs U3O8.
- The project is located within 25km of the two largest operating uranium mines in Namibia.
- Namibia is a mining-friendly jurisdiction with excellent infrastructure.
- Significant drill intercepts include 60m at 333ppm U3O8 and 7m at 971ppm U3O8.
Partnership Details
Star Minerals Limited and Madison Metals Inc. have entered into a binding agreement to jointly develop the Cobra Uranium Project in Namibia's Erongo region. Under the terms of the agreement, Star Minerals can earn up to a 51% stake in the project by investing USD$3.95 million over three years, including staged progress payments to Madison Metals.
The Cobra Uranium Project is strategically located within 25km of the Rossing and Husab uranium mines, two of the largest operating uranium mines in Namibia. The project covers a 297 km2 tenement with prospective geology for resource expansion and further discoveries.
Project Potential
The Cobra Project has an estimated quantity and grade of mineralization of 15.6 million tonnes at 260ppm U3O8, equating to approximately 9 million pounds of U3O8. Significant drill intercepts include:
- 60m at 333ppm U3O8 from 6m, including 5m at 414ppm U3O8 and 10m at 732ppm U3O8.
- 7m at 971ppm U3O8 from 38m, including 2m at 2883ppm U3O8.
- 9m at 636ppm U3O8 from 71m, including 5m at 1037ppm U3O8.
- 14m at 360ppm U3O8 from 47m, including 3m at 836ppm U3O8.
Operational Strategy
Star Minerals will be the operator of the project, working closely with Madison's in-country team. The project benefits from Namibia's mining-friendly jurisdiction, which offers excellent infrastructure, including a seaport, airport, well-established road network, water supply, and power.
Star Minerals aims to confirm and upgrade the existing estimates and explore the potential for further discoveries. The company has in-house expertise in uranium and specifically Namibian exploration experience through Mr. Ashley Jones, who will manage the project.
Market Context
Namibia is ranked as the 6th highest African mining jurisdiction for mining investment according to the Fraser Institute's 2022 annual survey. The country was the world's third-largest producer of uranium in 2022, accounting for 11% of global production.
The long-term fundamentals for uranium are strong, driven by its role as a sustainable and carbon-free energy source. The partnership between Star Minerals and Madison Metals positions both companies to capitalize on this growing market.
This partnership is expected to significantly impact Star Minerals' stock as it expands its portfolio into uranium, a sector with strong long-term fundamentals. The potential to upgrade and increase existing estimates could attract investor interest and drive stock price appreciation.
Investor Reaction:
Analysts are likely to view this partnership positively, given the strategic location of the Cobra Project and the potential for resource expansion. The collaboration with Madison Metals, which has an established team in Namibia, further strengthens the project's prospects.
Conclusion:
Investors should monitor the progress of the Cobra Uranium Project and consider the long-term potential of uranium as a sustainable energy source. Star Minerals' strategic move into uranium exploration could provide significant growth opportunities for the company.