Many commodities may be battling inflation or weak demand, but the uranium market continues to go from strength to strength, with January spot prices increasing 19% yoy. Despite a strong spot market helped by the introduction of more financial players such as SPUT, the long term fundamentals are strong drivers and point to a market with a significant structural deficit.
Over the next few years, the world’s uranium demand is forecast to far outweigh its supply. Although the current energy crisis is partly to blame, this imbalance between supply/demand is more structural, with new uranium mines not being incentivized enough to start production. Permitting can take years if not decades, and local opposition to mining can be solid obstacles to new entrants.
In that respect, an interesting Canadian Junior is getting closer to production than many of its competitors. GoviEx Uranium is an African based explorer with an ambition to become a significant uranium producer through the continued exploration and development of its two mine-permitted projects: the Madaouela Project in Niger and the Muntanga Project in Zambia.
GoviEx also has a third project that is more of an exploration play, however this is now being sold to African Energy Metals – more below.
GoviEx’s main project, Madaouela, has one of the largest uranium resources in the world, with 100 million pounds of U3O8 in measured and indicated mineral resources, plus inferred resources of 20 million pounds of U3O8. After a successful feasibility study was published last year, Madaouela is targeting to be in production by 2025/2026, subject to project financing. If the uranium forecasts are correct, they will be in production around the same time where utilities will be struggling to find material.
GoviEx’s second project is the Muntanga Project in Zambia, a heap leach, open pit operation with low acid consumption. Last year Muntanga has seen an ambitious field program which included 15,500 meters of infill drilling, with an aim to upgrade the Project’s Dibbwi East resource from Inferred to Indicated category. The company is forecast to update the environmental impact assessment to an IFC standard and complete the feasibility study by the start of 2024.
GoviEx’s third project, Falea, is a highly compelling and prospective polymetallic uranium, copper and silver deposit with surrounding gold. Earlier this year, GoviEx has entered into an agreement with African Energy Metals Inc. for its sale as part of a US$5.5 million deal (plus an NSR), which will them to maintain a significant interest in the Falea project whilst allowing the Company to concentrate its efforts and funding on the continued exploration and development of their other two projects.
The company’s management team is well known in the industry, with Daniel Major, CEO, being a respected individual with over 35 years of experience in the mining sector. The GoviEx board is extremely well connected, not least Govind Friedland as Chairman and Benoit La Salle (Aya Gold’s CEO) and David Cates (Denison Mines’ CEO) as board members.
So the future looks bright for GoviEx – they own two mine permitted assets in an advanced stage of development in mining friendly jurisdictions, the demand for nuclear energy continues to grow globally, and they have a well-connected, experienced management team, which are either likely to build a mine or take advantage of M&A opportunities in the sector.