Forsys Metals’ (TSX: FSY) Norasa Uranium Project Poised for Construction in Namibia

By Allen Alper Jr.
on 1/24/2016

Marcel Hilmer, the CEO Forsys Metals (TSX: FSY) spent some time with the team from Metals News giving them an update on the progress of their Norasa uranium project located in mining-friendly Namibia.

Hilmer said, “I was given the opportunity to become involved with the company seven years ago when they were having some internal issues. Consequent to that, I was invited by the Board to join as the CEO in 2010.”

Hilmer has worked for a long time in the mining business and brings experience with him to the company. He said, “My background is mining in Africa. I worked in various countries on the African continent. Forsys has always been predominantly in uranium in Namibia and that focus hasn’t changed since I joined.”

The company is currently working on the Norasa project and has advanced it quite quickly. Hilmer said, “We are currently developing a project in Namibia and progressing that project to the point where we are at the preconstruction stage. 2015 was a very important year for us as we released a new statement of Resources and Reserves. In March, we released a robust Feasibility Study for the project which, in conjunction with having a mining license and all of the permits and approvals in place, enables us to now look for the funding for the capital development of the project.”

Like many companies, Hilmer and his staff are trying to balance the need of moving their project forward with the realities of today’s market. He said, “I would like to put this into the context of the uranium market today. We have seen a downturn in commodity pricing. The spot and contract price has been at or below low’s not seen in a decade. What this means is that there has been a decline in the ability to work on and progress projects that are of the size and quality of Norasa. We have focused on improving the economics around the Norasa project so that we are in a position, when the price of uranium starts to pick up again, to bring the project into commercial production.”

For Hilmer and his team, the project itself is in a good place. He said, “Fortunately, there are no challenges with the project itself. We have a project that is of a substantial size, which has almost one hundred million pounds of reserves and is located in one of the best countries in Africa for developing this style of project.” Hilmer believes that mining in Namibia is a good choice. He said, “Uranium mining has been in place in Namibia for more than 30 years. Forsys has a mine license and has all the necessary approvals in place. We have a strong and experienced team. If we consider challenges, then we are talking about the ability to raise project funding in todays market.”

Finding funding is a challenge across the board, believes Hilmer. He said, “This is not only in the uranium space. It is clear across the mining sector with the full range of metals and extending into oil and gas. It is just a tough time to raise money. Our challenge is to be able to raise the funds for construction. We need to be able to raise just in excess of $400 million dollars U.S. to develop the project capex. Everything is ready to go. So we would very quickly go into construction and after 18 months of construction we would go into mining and commercial production from there.”

Hilmer believes that Namibia offers a friendly opportunity. He said, “Namibia is without doubt the best country we have worked in to develop a mine on the African continent. The country has a long history of a sound and fair tax code and a solid democracy. It is an environment which is safe and attractive in terms of climate. It has the most advanced infrastructure according to the Fraser Institute. It is the combination of all of these aspects that make it a great place to develop a mine.”

Hilmer and his team have been working on finding funding. He said, “We have started early discussions on offtake agreements. There is 100% of the offtake available. It creates interest in the major companies and governments that have the ability to utilize uranium for power generation over longer term requirements. We haven’t gone forward because we are waiting for an improved sentiment for nuclear power to take hold which will eventually be reflected in increased prices.”

Why should investors consider Forsys? Hilmer believes there are a wide range of factors. He said, “The location of the project and the size of the project makes it attractive. People are looking for projects that can produce for a long period of time and we are in a ready state of preparedness to go into production. Not many projects have a mine license in place. When the market moves north, we will be able to move quickly and that is attractive to investors and end-users.”

To continue the project, Forsys will need funding. Hilmer said, “We need to be flexible on our financing. We have to look at all of our opportunities and it will include equity, offtakes and strategic partners. We will likely look for a combination of them. We are working on conveying why people should be interested in our project. I would say that having an experienced management team that has the understanding of how to develop projects is critical. We have that. We have a Board with very experienced executives. We have senior management who have been in management in Namibia for a decade. That is critical to ensure a good project can be developed.”

http://www.forsysmetals.com/
Forsys Metals Corp.
P.O. Box 909
31 Adelaide Street East
Toronto, Ontario M5C 2K3
Telephone: 416-367-4242416-367-4242
Email: info@forsysmetals.com