The Ministry of Mines and Energy has written a Notice of Preparedness to Grant Shiyela Iron (Pty) Ltd a Mining Licence for its estimated N$2 billion Iron Project.
In a statement released this week to shareholders, Shiyela Iron, a local unit of Australian exploration company, Deep Yellow says it intends to accept the standard terms and conditions contained within the notice of preparedness.
"Therefore, in accordance with Namibia's Minerals (Prospecting and Mining) Act, 1992, it is expected that the Minister of Mines will now direct the Mining Commissioner to issue a Mining Licence to the company," the statement read.
The Shiyela Iron project is located in the environmentally sensitive Namib Naukluft Park, which is used primarily for tourism. The area is contained within Reptile Uranium Namibia's 100% owned EPL3496 which is rich in Base and Rare Metals, Precious Metals and Industrial Minerals. Reptile is Deep Yellow's wholly-owned Namibian operating subsidiary.
DYL's Managing Director Greg Cochran said: "We are delighted to receive notification of preparedness to grant a Mining Licence for the Shiyela Iron Project. Environmental approval was already obtained early in 2012 and this is another major step forward for the project. I would like to acknowledge the support shown for the project by the Namibian Government, in particular the Ministry of Mines and Energy, and the Ministry of Environment and Tourism and members of the RUN team involved in the Project."
Deep Yellow says it is currently finalising a resource update for the project as well as a new scoping study which has incorporated the encouraging results of the additional drilling and metallurgical testwork conducted earlier in the year.
The Shiyela Iron Project, is the only known commercially viable iron deposit in the country.
Once operational, the project will initially produce 2 million tonnes per annum of a high quality, coarse grained magnetite expected to attract a premium price in the export market. Depending on the Walvis Bay port capacity, ongoing exploration success and overall market economics, the project could ultimately be expanded to around 7.5 million tonnes per annum of magnetite product. Namibia is currently a net importer of raw iron ore, which is used at Rössing as a source of ferric in their processing plant.
Reptile Uranium Namibia submitted a Mining Licence Application to the Namibian Ministry of Mines and Energy for the Shiyela Project in December last year.
The company recently announced that divestment in the Shiyela Iron Project is a priority as it believes that the project presents a potential opportunity to source non-dilutionary funding for the company. RMB Namibia was appointed to divest the project. An announcement regarding potential future partners or investors is expected at the end of this year.