Extract Resources - 37% increase in reserves at Husab

SOUTH PERTH, Australia, Aug. 10, 2011 /CNW/ --
Highlights:

    --  Reserve estimate for the Husab Uranium Project improved
        following evaluation of updated resource model:
  o 37% increase in reserve extends projected mine life for Zones 1 and
    2 to over 20 years (including pre-strip);
  o Increase in ore grade from 497 ppm to 518 ppm;
  o Maiden declaration of Proven Reserves equivalent to four years of
    full production;
  o 18% reduction in forecast strip ratio for life of mine from 7.3:1
    to 6.2:1
    --  Updated reserve estimate marks latest phase of the Company's
        Mine Optimisation and Resource Extension (MORE) programme,
        aimed at substantially increasing overall project value
    --  MORE programme, including detailed mine planning, continues in
        parallel with ongoing drilling programme; further resource
        update expected in H1, 2012

SOUTH PERTH, Australia, Aug. 10, 2011 /CNW/ - Extract Resources Limited (ASX/TSX/NSX: EXT) ('Extract' or 'the Company') announces an updated reserve estimate for Zones 1 and 2 of its Husab
Uranium Project in Namibia.

Total ore tonnes within the reserve have increased by 37% to 280 million
tonnes. Based on processing of 15 million tonnes of ore per year, as
envisaged in the Definitive Feasibility Study (DFS), this equates to a
20 year mine life, once pre-strip and ramp-up phases are included. A
detailed mine plan will be generated in due course.

Together with a 4% increase in forecast grade to 518 parts per million,
total contained uranium has increased by 42%. The increase in grade is
also expected to lead to an increase in process recovery.

The previous reserve estimate was announced on April 5, 2011 in
conjunction with the results of the DFS. This estimate was based on a
resource model completed in July 2010. The reserve update also
incorporates the latest geotechnical parameters, operating assumptions
and costs generated as part of the DFS.

Table 1 below shows the August 2011 reserve estimate and the April 2011
estimate, which formed the basis of the company's DFS on Zones 1 and 2
of the Husab Uranium Project.

                               Table 1:
            Husab Zone 1 - 2 (August 2011) Reserve Estimate

       

                      Tonnage        Grade   Contained U(3)O(8)
                         (Mt)   (ppm U3O8)                (MLb)

Proven                                                         

Zone 1                   25.3          482                 26.9

Zone 2                   37.4          628                 51.8

                         62.7          569                 78.7

Probable                                                       

Zone 1                  123.4          460                125.1

Zone 2                   93.9          561                116.1

                        217.3          504                241.2

                                                               

Proven and Probable                                            

August 2011             280.0          518                319.9

April 2011              205.0          497                224.8

The increase in reserves arises both from:

  1. The identification of new resources; and
  2. The upgrading of resources previously classified as inferred
     (which are ineligible for inclusion as reserves) to indicated
     category.

The conversion of material to reserves within the pit shells as
anticipated in the DFS leads to an 18% reduction in the forecast life
of mine strip ratio (including pre-strip) from 7.3:1 to 6.2:1. The
reduction in strip ratio is expected to have a positive effect on
project economics.

Extract Resources CEO and Managing Director Mr. Jonathan Leslie said:

      'The optimisation of the June 2011 resource model has produced a
      very pleasing outcome with all key drivers of value - in
      particular ore tonnes, grade and strip ratio - showing
      significant improvements. This latest reserve estimate indicates
      a 20  year mine life for Zones 1 and 2 alone. We are confident
      that Husab will become a nationally and globally significant
      long-life mine, with opportunities to increase the reserve base
      further by the addition of defined resources at Zones 3 to 5, and
      through building on promising exploration results from Middle
      Dome, Pizzaro and Salem.

      'The reserve update is the latest milestone delivered under our
      MORE programme initiated earlier this year. A review of
      life-of-mine pit sequencing and scheduling is now underway to
      further refine the overall mine plan and financial model for
      Husab. The MORE programme continues to evaluate further
      opportunities to increase mine life, and to optimise the process
      plant and mining operations to add significant additional value
      to the Husab project.'

Table 2 shows the June 2011 resource estimate for the Husab Uranium
Project.

                            Table 2:
Husab Uranium Project Zone 1 - 5 (June 2011) and Ida Dome (August

                     2008) Resource Estimate

       

                       Tonnage        Grade    Contained U(3)O(8)
                          (Mt)   (ppm U3O8)                 (MLb)

Measured                                                         

Zone 1                    32.1          420                  29.4

Zone 2                    42.3          580                  54.4

                          74.4          510                  83.8

Indicated                                                        

Zone 1                   170.5          400                 148.6

Zone 2                   110.0          520                 125.4

Ida Dome                   0.6          246                   0.3

                         281.1          440                 274.3

Measured & Indicated                                             

Total June 2011          355.5          460                 358.1

August 2010              241.6          483                 257.3

                                                                 

Inferred                                                         

Zone 1                    37.7          370                  30.9

Zone 2                    39.1          370                  31.8

Zone 3                    46.1          240                  24.1

Zone 4                    19.8          560                  24.5

Zone 5                    32.3          260                  18.7

Ida Dome                  52.7          213                  24.8

June 2011                227.7          310                 154.8

August 2010              178.2          344                 135.0

Note: Figures have been rounded. Resources stated inclusive of reserves,
and stated at 100ppm cut off.

-Ends-

About Extract Resources Ltd:

Extract Resources Ltd is an international uranium exploration and
development company whose primary focus is in Namibia. The company's
principal asset is its 100%-owned Husab Uranium Project which contains
one of the largest uranium only deposits in the world. Extensive
exploration potential also exists for new uranium discoveries in the
region. Extract Resources is listed on the Australian (ASX), Toronto
(TSX) and Namibian (NSX) Stock Exchanges.

Notes:

All financial figures are expressed in US$ in real terms assuming a base
date of 1st January 2011 unless otherwise stated.

The information in this report that relates to Exploration Results or
Mineral Resources is based on information compiled or reviewed by Mr
Martin Spivey, who is a Member of The Australasian Institute of Mining
and Metallurgy and Mr Andrew Penkethman who is a Fellow of The
Australasian Institute of Mining and Metallurgy and a Member of the
Australian Institute of Geoscientists. Mr Spivey and Mr Penkethman are
both full time employees of the Company. Mr Spivey and Mr Penkethman
have sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the
activity which they are undertaking to qualify as a Competent Person as
defined in the 2004 Edition of the 'Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves'. Mr Spivey and
Mr Penkethman consent to the inclusion in this report of the matters
based on their information in the form and context in which it appears.

The information in this report that relates to Ore Reserves is based on
information compiled or reviewed by Mr Steve Craig and Ross Cheyne, who
are both Members of The Australasian Institute of Mining and
Metallurgy. Mr Craig and Mr Cheyne are consultants to the Company and
founding directors of Mining Consultancy group, ORElogy. Mr Craig and
Mr Cheyne have sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the
activity which they are undertaking to qualify as a Competent Person as
defined in the 2004 Edition of the 'Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves'. Mr Craig and
Mr Cheyne consent to the inclusion in this report of the matters based
on their information in the form and context in which it appears.

This release contains certain 'forward-looking statements'. All
statements, other than statements of historical fact, that address
activities, events or developments that the Company believes, expects
or anticipates will or may occur in the future are forward-looking
statements. Forward-looking statements are often, but not always,
identified by the use of words such as 'seek', 'anticipate', 'believe',
'plan', 'estimate', 'expect', and 'intend' and statements that an event
or result 'may', 'will', 'can', 'should', 'could', or 'might' occur or
be achieved and other similar expressions. Forward looking statements
include those relating to the updated resource estimate increasing mine
life and value, and the potential for process enhancements to add
further value to the project. These forward-looking statements reflect
the current internal projections, expectations or beliefs of the
Company based on information currently available to the Company.
Forward-looking statements are subject to a number of risks and
uncertainties, including those detailed from time to time in filings
made by the Company with securities regulatory authorities, that may
cause the actual results of the Company to differ materially from those
discussed in the forward looking statements, and even if such actual
results are realised or substantially realised, there can be no
assurance that they will have the expected consequences to, or effects
on the Company. The Company expressly disclaims any obligation to
update or revise any such forward-looking statements except as required
by securities laws.

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