GoviEx Updates on Arbitration Process for Madaouela Uranium Project in Niger

GoviEx Uranium (TSXV:GXU,OTCQB:GVXXF) said this week that it continues to pursue legal action against Niger over the revocation of its mining rights at the Madaouela uranium project.

In a Monday (January 6) letter to stakeholders, Govind Friedland, the company's executive chair, acknowledged the operational setback, but reaffirmed the company’s commitment to protecting its rights.

Friedland described the revocation as not only a legal issue, but also a significant disappointment for the company, given its long-term investment and development efforts in the country.

The company initiated arbitration proceedings in December under the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States to challenge the Niger’s government's July 2024 decision.

The arbitration stems from the Niger Ministry of Mines’ decision to withdraw GoviEx’s mining permit for Madaouela, a move followed by formal decrees from the Niger Council of Ministers. The company contends these actions breach obligations outlined in the Mining Convention signed in 2007, governed by Nigerien law and the country’s Mining Code.

According to GoviEx, it has invested over a decade in developing the Madaouela project, conducting over 650,000 meters of drilling at the site. The asset was in the advanced stages of development, with interest from lenders exceeding US$200 million for project-related financing. Groundwork, environmental assessments and engineering designs had been initiated, with the construction of access infrastructure underway.

Despite political changes in Niger following a July 2023 coup d'état, GoviEx maintained progress at the project, anticipating that increased uranium prices would support further development.

Madaouela was projected to generate significant employment and economic benefits for the region, including up to 800 jobs and substantial tax and royalty payments over a 20 year mine life.

GoviEx had previously attempted to resolve the matter through local administrative channels, but said it received no engagement from Niger’s government. At that point, the company turned to international arbitration.

In parallel with the arbitration, GoviEx has shifted focus to advancing its Muntanga uranium project in Zambia.

“This shift was not a departure from our strategic priorities but rather an acceleration of the development of a project that has always been a critical part of our portfolio,” Friedland explained in Monday's release.

The company has made progress on Muntanga, completing technical studies and a drilling program that have enhanced resource estimates for the property. Last year, metallurgical testing demonstrated uranium recovery rates of 90 percent or higher, which GoviEx said supports plans for heap-leach processing at the project.

“As we near the completion of the feasibility study, I am increasingly optimistic about Muntanga’s potential to transform GoviEx into a uranium producer of global significance,” Friedland added.

GoviEx emphasized that it remains open to dialogue with Niger’s government. However, it maintains that it is entitled to either the reinstatement of its rights at Madaouela or financial compensation. The company intends to pursue all available legal avenues to protect shareholder interests and ensure the continuation of project development in Zambia.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.