The Conversation (0)
Resource Investing News spoke with Daniel Major, CEO of GoviEx Uranium, about his company’s Madaouela project in Niger and how it’s progressing in today’s low price environment. He also touched on his outlook for the uranium market moving forward.
The company just reported an increase in the mineral resource for the Marianne and Marilyn (M&M) deposits at its Madaouela project in Niger. The new calculation increases the total mineral resource by approximately 13 percent; it now consists of measured and indicated mineral resources of 110.76 million pounds U3O8 and additional inferred resources of 27.66 million pounds U3O8. That’s using a cut off of 0.4 kg/t eU.
GoviEx CEO Daniel Major said the increase comes from the results of 576 additional holes that the company began drilling in 2013, when it put out its integrated development plan (IDP) for Madaouela. They weren’t previously factored into the resource model, but now that they have been added, they not only increase the total resource, but also extend the life of the mine.
Working towards its mining permit
Besides providing attractive resource numbers, GoviEx has also continued to knock off the requirements for obtaining a mining permit for the project, starting with filing its environmental and social impact assessment (ESIA) to the Nigerien minister in charge of the environment.
“Under the code there are three primary things you need to apply for a mining permit. You need an ESIA, you have to have to have an environmental impact certificate and a feasibility study,” explained Major. “We already have the ESIA, [and] we are working working to get the certificate done as soon as possibly. Most of the table work has been already finished by the ministry. And we expect them to do the last part in the next three weeks.”
He said that GoviEx is currently working on getting all the up-to-date information into the IDP and plans to file the feasibility study with the ministry on time and hopefully early. Under the code, the ministry has four to five months to respond and sign off on it. Major also noted that Niger has a good, straightforward system that builds ownership and tax codes right into the mining code, making it one contract for everything.
Big names in the business
Both the Madaoulea and GoviEx have garnered a lot of support right from the start, with key backers including Toshiba (TSE:6502) and Cameco( TSX:CCO,NYSE:CCJ). Toshiba gained 19.42 percent of the company after an agreement saw a previous loan from the company get converted into interest. As part of the deal, GoviEx received $40 million in strategic financing and signed an offtake agreement pertaining to Madaouela. Cameco has been a strategic alliance partner of GoviEx since 2008.
The team also has some very experienced people on its roster, with Major having over 25 years in the mining industry. He’s worked with Rio Tinto (NYSE:RIO,ASX:RIO,LSE:RIO) at the Rossing uranium mine in Namibia and as a mining analyst at HSBC (NYSE:HSBC) and JP Morgan Chase (NYSE:JPM). Meanwhile, Govind Friedland, son of mining magnate Robert Friedland, is the company’s founder and executive chairman. His impressive experience in the industry includes co-founding Ivanhoe Industries.
Slow and steady wins the race
Major has said in the past that GoviEx is in a strong position for when the market turns, and while nobody can guarantee where the market is going, Resource Investing News was curious as to when Major thinks the uranium price may improve.
“I think my view on this whole thing is that we are gradually timing the market. We’ve seen the price back up toward $40. I think we are seeing a general constraint on the supply side at the moment and we are seeing growth on the demand side coming on,” he said. “I think we are going to see two years of slow, steady increases. We’re not going to get that excited. We might see somewhere around $45 by the end of the year, and I think the following year it will continue to tick up.”
He noted that the new reactors being constructed and plans for others to come back online in both China and Japan will have an effect on the uranium price once the market realizes that there aren’t enough projects out there to fuel them.
Until then, GoviEx will have the ability to continue to progress its project without having to “be drilling exploration holes all over the place.” And considering it should be permitted by the end of this year or early next year, it will have a lot of ground already under its control under the mining permit.
At end of day Tuesday, GoviEx’s share price was unmoved, sitting at C$0.085.
Securities Disclosure: I, Kristen Moran, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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