Bannerman Energy (ASX:BMN) Executive Chairman Brandon Munro told investors the company has reached what he described as a “transformational” moment, outlining a strategic financing and joint venture transaction with CNNC Overseas Limited, part of the Chinese nuclear group CNNC. Speaking on a company call, Munro said the deal provides a pathway for Bannerman to become a uranium producer through development of its Etango Project in Namibia.
Etango project status and location
Munro reiterated that Etango is a large, advanced uranium project in Namibia’s Erongo Region. He said the project has all required permits and that Bannerman has already commenced early works on site. He also referenced the company’s cash position and liquid assets as part of the context for advancing the project.
Transaction structure: investment, ownership and reimbursement
Key financial terms described on the call included:
- Cash subscription: $294.5 million, paid in one tranche at completion.
- Early works reimbursement: CNNC will reimburse Bannerman for 45% of certain early works spending backdated to 1 July 2025. Munro said spending between 1 July 2025 and completion could be up to $60 million, with reimbursement capped at $25 million.
- Shareholder loan component: In response to a question, Munro said roughly $80 million of the $294.5 million will be structured as shareholder loan to align the JV at 45/55 “in all respects,” including shareholder loans. He added that Bannerman would convert a “significant proportion” of its shareholder loans to equity to meet thin capitalization requirements.
Munro also addressed market focus on the “see-through” valuation implied by the deal. He said the company calculated the transaction was struck at a significant premium to where the stock traded for much of the prior year, but that recent volatility in uranium equities and foreign exchange moves meant the current read-through was about a 10% discount to the three-month volume-weighted average share price. He urged investors to consider the transaction holistically, emphasizing the strategic and risk-reduction elements.
Offtake terms and marketing control
Munro highlighted a cornerstone life-of-mine offtake agreement as a central feature of the transaction. CNNC Overseas will have the obligation to take 60% of Etango’s product over the full life of mine, on what he described as arm’s-length, market-related terms based on a combination of term and spot pricing at delivery. He said there are no price floors or ceilings and characterized this as providing “industry-leading” exposure to uranium price upside.
He also emphasized flexibility in delivery timing and volumes for the 60% offtake, as well as “highly favorable” payment terms intended to reduce working capital requirements, particularly during early production years.
On the remaining 40% of production, Munro said Bannerman will have “absolute control and discretion” over marketing and customer relationships. Answering a question about whether Chinese involvement could affect contracting with Western utilities, he said the documentation includes “ironclad ring-fencing” provisions: CNNC’s rights are limited to third-party audit confirmation of financials, with no visibility on customers, terms, or contracts for Bannerman’s 40% sales.
Construction funding, timetable and expansion pathway
Munro said the financing delivers what he described as construction funding for Etango, referencing a controlled budget estimate of $353 million in pre-production capital cost published in June 2024, following front-end engineering and design. He said around $10 million of that had been spent before 30 June 2025, and that the CNNC investment plus expected spending from 1 July 2025 to completion underpins the construction-funding framework.
He added that there would still be other costs such as working capital, JV expenses, and corporate expenses, but said any additional JV co-funding required from Bannerman beyond existing corporate cash reserves at completion is expected to be “modest.”
On schedule, Munro said the parties expect to complete conditions precedent by mid-year, with transaction completion around that time. A final investment decision would then be considered with the joint venture partners in the second half, enabling a move from early works to full-scale construction. Munro indicated first uranium production is targeted for 2028 with ramp-up to full production capacity in 2029.
Responding to a question on potential expansion, Munro said Bannerman intends to start with the Etango-8 development pathway and that the transaction increases both the probability and attractiveness of later expanding to a higher production scenario. He pointed to the project-level joint venture structure and a debt-free pathway as factors that could support financing alternatives for an expansion once production is established.
Why CNNC and what changes for Bannerman
Munro said the transaction followed a two-year global financing process and was considered superior to other strategic alternatives and to a traditional equity-and-debt funding approach. He repeatedly emphasized that the deal lowers financial and execution risk, keeps Bannerman in majority ownership, and avoids taking on debt at this stage.
He also described CNNC’s scale and capability as a strategic advantage, citing a fleet of commercial reactors and a significant construction pipeline, and noted CNNC’s presence in Namibia through its ownership and operation of the Rössing uranium mine since 2019. Munro said that proximity and experience provided comfort regarding CNNC’s suitability as a joint venture partner.
Closing the call, Munro said the company now has what he called an “optimal finance solution,” a debt-free execution pathway, and an offtake arrangement he said would not be available on comparable terms without CNNC being a partner in the project.
About Bannerman Energy (ASX:BMN)
Uranium Exploration & Development
