An Australian Stock Exchange listed mining prospecting outfit, A- Cap Resource Ltd, is to join the BSE this week in a bid to expand its operations in the country, thanks to an upsurge in international commodity prices.
The prospecting house, with vast interests in copper, diamonds, gold, nickel and uranium, is to float nearly 96, 000, 000 shares on foreign venture board on Tuesday in an attempt to take advantage of the high international commodity prices.
In its pre-listing statement, the company said it is scouring some diamonds and uranium economic deposits in the Bobirwa area and some gold deposits, in partnership with gold mining giant, IAMGOLD.
The company has been granted approximately 8,000 square kilometers for exploration for various resources ÔÇô mostly with previous discoveries ÔÇô and aims to use modern technologies to establish resources for nickel, copper, gold, uranium and diamonds. It said the most promising site for uranium is at Makobaesi, which was previously estimated by Falconbridge to have uraniferous mineralization of 1.75 million tonnes at a grade of 0.069 percent.
The A-Cap move is being emboldened by a spike in commercial uranium prices, which rose from US $ 10 to US $ 35 per pound in the last three years. The move is being accelerated by the rising energy demands that have seen the general energy demand and supply matrix in a very tricky situation.
Uranium, or nuclear fuel, accounts for 16 percent of the world’s energy supply with the developing countries of France, Germany, Japan, South Korea and United States of America leading the pack of the 30 countries that have nuclear reactors.
Globally, there are 441 nuclear reactors but the number is set to jump-up as China, India
Japan, Russia and South Korea are trying to bolster their nuclear energy capacities to cope with rising electricity demands. China has indicated that it is planning to build 28 new nuclear reactors, while India will increase its own by 24.
“Major factors influencing this rapid increase in uranium prices include a weaker U.S dollar, compared to currencies in the major uranium producing countries, waning commercial uranium inventories, Russia’s withdrawal from uranium concentrates market and increasing requirements for nuclear power generation,” A-Cap said in a statement.
The company said it is aiming to benefit from the decline in uranium supply across the world, which is expected to drop from 35 percent to less than 25 percent by 2020.
“A secondary supplies decline, additional primary production will be required, with current production of 105 million pounds of uranium per annum required to expand to around 109 million pounds of uranium per annum by 2020,” the pre-listing statement added.
Further, it said its move to look for uranium in Botswana is also supported by the country’s political stability that is good for business confidence, unlike in other parts of the world.
Apart from its operations in Botswana, the company is also involved in some other mining explorations in China and Australia. A-Cap Resources is the third mining company to list on the BSE this year, after CIC Energy and IAMGOLD.