Interview with Brandon Munro, MD & CEO, and Olga Skorlyakova, VP of Market Strategy for Bannerman Energy (ASX: BMN)

Our previous interview: https://youtu.be/w8NJxlyVtvs

Recording date: 6th September 2023

Bannerman Energy is an Australian uranium development company focused on its large-scale Etango project in Namibia, the world's third-largest uranium producer. Bannerman CEO Brandon Munro and new VP of Market Strategy Olga Skorlyakova discuss how uranium term contracts get signed from a project development perspective.

Utilities are showing renewed interest in new uranium supply amid recent disruptions from top producers Kazakhstan and Nigeria. Namibia is a tried and trusted 45-year supplier. Bannerman is now at the forefront with Etango, having completed feasibility studies, pilot plant testing, and advanced engineering design. The project is ready to supply utilities when needed.

Term contracting is a long process in nuclear, sometimes taking years from initial discussions to signed deals. Bannerman has time on its side and doesn't need to rush. The company has always taken a patient, conservative approach to developing Etango since 2006. Bannerman is willing to wait for the right market conditions and pricing.

The mining licence application was lodged a year ago and approval timing is not prescriptive under Namibian law. The Ministry is currently overwhelmed with applications but Bannerman is comfortable with this timeline given the positive uranium market momentum. The mining licence is the last major hurdle before Bannerman can make an FID.

Initial contract volumes likely won't be massive as Bannerman must first establish itself as a reliable new producer. But major utilities can offer scale, e.g. 500,000 lb contracts, to form the portfolio base. Bannerman aims to pick a starting price range that doesn't lock away all upside potential but meets shareholder requirements.

The current environment means Bannerman has leverage in negotiating contracts. Utilities need geographic, supplier and pricing diversification. Bannerman offers supply security from a stable jurisdiction like Namibia. Buyers are willing to pay a premium for this.

Bannerman has assembled an experienced uranium team, both corporate and on-the-ground in Namibia. This reduces a key execution risk as skilled labour is scarce. The company is leveraged to higher uranium prices given Etango's large size and expansion potential from 3.5M lb to over 7M lb per year. The after-tax NPV more than doubles from $209M to $435M by adding just $15/lb to the assumed price. Sentiment suggests spot won't stop at $65/lb, making Bannerman an attractive uranium investment.