Askari Metals begins phase I drilling at Uis lithium project in Namibia
Askari Metals Limited has started its Phase I RC drilling program on Exclusive Prospecting Licence 8535, which forms a part of the Uis Lithium Project located in Namibia.
The project comprises EPL 7345 and EPL 8535 and covers an area of 308.12km2 in a highly mineralised, spodumene rich pegmatite belt with a history of prior production and exploration success.
According to the latest announcement, the drilling program commenced on 12 February 2023, with the company having completed six holes already. EPL 8535 is situated less than 17km from the town of Uis and adjacent to the operating Uis Mine, owned by London-listed Andrada Mining Limited. The project holds exceptional potential, as identified by the due diligence sample results and the very high number of pegmatites exposed at the surface, ranging from a few meters in width to more than 50m wide.
Askari’s VP-Exploration & Geology, Johan Lambrechts said, “This inaugural phase of drilling on EPL 8535 will culminate in the Company completing more than 100 drill holes on our Namibian projects in less than five months, and this statistic will be compounded when the second phase of drilling starts on EPL 7345 in a few weeks’ time. We aim to continue with this methodology for the foreseeable future, with the mapping programs leading to new and additional drill targets to be tested.”
The first phase of drilling on EPL 8535 according to the company, aims to test several high-grade lithium targets identified by the due diligence work completed by the company.
A second RC drill rig according to Askari, will commence the Phase II drilling program on EPL 7345 in the next few weeks, and after the completion of the mapping program on EPL 7345.
The mining industry experts are closely monitoring the progress of the drilling program, as the Uis Lithium Project has the potential to become one of the leading lithium producers globally.
According to the latest figures, the price of lithium is steadily increasing, currently trading at US$8,200 per tonne, up from US$6,100 per tonne in January 2022. The demand for lithium is expected to grow further due to the rising demand for electric vehicles, renewable energy storage, and other emerging technologies.
BoN hikes repo rate by 25bps, drives up debt servicing costs
The Monetary Policy Committee (MPC) of the Bank of Namibia (BoN) at its first meeting for the year resolved to hike the repo rate by 25 basis points, inline with analyst forecasts.
According BoN Governor, Johannes !Gawaxab, two members of the MPC recommended that the rate remain unchanged, with the other opting for a 25bps hike, while none recommended a 50bps hike.
“The MPC decided to increase the Repo rate by 25 basis points to 7%. The increase in the Repo rate effectively brings the prime lending rate to 10.75%. The decision was taken to contain inflationary pressure and its second-round effects and anchor inflation expectations. The decision is also deemed appropriate to safeguard the one-to-one link between the Namibia Dollar and the South African Rand. Moreover, this monetary policy stance will take the current negative real policy interest rate to a neutral rate,” he said.
The Governor noted that the Bank will continue to monitor these developments and their potential effects on the domestic economy and will act appropriately, in line with its mandate to ensure price stability in the interest of sustainable economic growth and development of the country.
Cirrus Capital Securities and Simonis Storm had forecasted a 25bps hike, while PSG Namibia forecasted a 50bps hike.
“We maintain our view that the interest rate hiking cycle could have come to an end in Namibia. Further, we see interest rates remaining at current levels at least until end of 2024,” Simonis Storm Economist, Theo Klein said.
This comes after the SARB Monetary Policy Committee last month voted to hike interest rates by 25bps, taking the country’s repurchase rate to 7.25%, increasing the prime lending rate to 10.75%.
The next meeting of the MPC will be held on the 17th and 18th of April 2023.
Namibia’s 2023 Economic Outlook: What to Expect
Namibia’s economy is expected to see a slowdown in 2023 and RMB Namibia predicts a moderation of GDP growth from 4.1% in 2022 to 3% in 2023, driven by the performance of the primary industries, including the mining and exploration sector.
However, FirstRand Namibia Economist Ruusa Nandago warns that this growth may not necessarily result in significant employment and consumption improvements.
Inflation is also expected to decline in 2023, averaging 5.2% compared to 6.1% in 2022, but the consumer environment may face challenges due to pressure on disposable income from rising inflation and interest rates, limited job opportunities, poor real wage growth, and high levels of debt.
“The effects of these were already evident in the poor growth observed in household private sector credit extension and the residential property market in 2022,” she said.
RMB Namibia CEO Philip Chapman suggests that Namibia could explore opportunities to improve its economic outlook through structural reforms aimed at improving the business climate, investing in skills development, and boosting agricultural productivity, as well as investments in clean technologies and energy efficiency.
Cirrus Capital predicts growth in 2022 at 3.8% and a slight slowdown to 3.5% in 2023, with the mining sector expected to continue its recovery, and the construction and agriculture sectors remaining a concern.
PSG Namibia forecasts a moderation in real GDP growth from 3.9% in 2022 to 2.6% in 2023 due to a global slowdown and weaker domestic demand.
“The brisk real GDP growth of 5.6% y/y in the first three quarters of last year has prompted us to increase our 2022 growth estimate to 3.9% from 3.2%, previously. We forecast that real GDP growth will slow to 2.6% (up from 2.1% previously) in 2023 amid global headwinds which will put a break on exports.”
The country’s budget deficit is expected to narrow from 5.4% in the preceding fiscal year to 4.9% in the 2023/24 fiscal year.
Simonis Storm predicts growth of 5.1% in 2022 and 3.7% in 2023, with inflation reducing from 6.1% in 2022 to 5.3% in 2023, and the central bank expected to gradually normalize interest rates as the inflation outlook improves.
“Risks to our growth outlook include elevated interest rates, weak external demand, softer commodity prices and political uncertainty as we approach the presidential elections in 2024.”