Shares in Perth-based Globe Uranium (GBE) surged as much as 40% today after the uranium explorer announced the initial JORC resource for its wholly owned multi-resource Kanyika Project in Malawi.
The share price in the small capitalisation company finished 24% up at 31 cents on the back of the news, although this is still well below its 52-week high of $1.21.
The company said the Kanyika resource was discovered at a cost of $3 million over 2 years.
“The multi-commodity aspect of Kanyika is one of its most important features,” the company said of its niobium, uranium, tantalum and zirconium project in the east African state.
“Niobium demand has grown at 20% per annum over the last five years on the back of the China and India story. The other three commodities – uranium, tantalum and zircon – could be produced as a byproduct irrespective of their grade, as the potential mine economics will be based almost entirely on the niobium extraction,” managing director Mark Sumich said.
Globe said 85% of all niobium is used in the steel industry, and 10% of all steel products contain niobium as an additive.
“The high-grade, mostly near-surface component of the resource lends itself to early open cut mining at a very low strip ratio, thereby reducing a capital payback period,” he said.
“This can be critical to securing debt funding for mine development.”
The company said its cash position as of today’s date is $8.9 million.
The market capitalisation is approximately $16.8 million.
