GoviEx Uranium Inc. (TSXV: GXU) (OTCQB: GVXXF) (“GoviEx” or “Company”) today announced the appointment of SRK Consulting (UK) Ltd (“SRK”) and SGS Bateman (Pty) Ltd (“SGS”) as the consultants for the completion of a feasibility study for the Madaouela Project (the “Feasibility Study”). SRK and SGS were part of the team that completed the pre-feasibility study (the “Pre-Feasibility Study”)1 and environmental permitting work for the Madaouela Project. Both companies have considerable experience in uranium and African project development.
“We are excited to commence this next stage in the development of the Madaouela Project,” said Chairman Govind Friedland. “GoviEx has steadily and actively focused on value accretion for our projects while staying in tune with the state of the market; our appointment of SRK and SGS corresponds with a recovering uranium market price. GoviEx will continue to advance our projects with discretionary spending commensurate with improving market fundamentals.”
During the period of weak uranium pricing, GoviEx’ strategy focused on building its project pipeline by targeting low-cost acquisitions and advancing project development with technical optimization. The Feasibility Study will allow GoviEx to include the positive effects of certain optimizations, which were not available at the time the Pre-Feasibility Study was produced:
- The addition of Agaliouk Exploration Permit (announced November 15, 2017) adds 11.67 million pounds (Mlb) U3O8in the Measured and Indicated categories (of which 5.96 Mlb U3O8relates to the open-pit amenable Miriam Deposit) and 9.35 Mlb U3O8in the Inferred category.
- The inclusion of membrane separation in the Madaouela Project process design could potentially reduce operating and capital costs, which may significantly improve project economics. The review study results (announced April 5, 2018), while based on the Pre-Feasibility Study inputs, are preliminary in nature and require further technical studies; however, these initial results are sufficiently relevant to support their inclusion of membrane separation in the Feasibility Study for the Madaouela Project.
“We believe the fundamentals of the uranium market are recovering,” noted Chief Executive Officer Daniel Major. “The World Nuclear Association is reporting increased nuclear reactor start-ups, and major uranium producers have announced production cuts. The current impacts of these developments are evidenced by the rising uranium spot price. The Board of GoviEx believes our key commercial advantages are our two mine-permitted projects, as they provide us with the ability to react positively to a uranium rally.”
GoviEx’s corporate strategy remains focused on the development of two projects: initially, Madaouela in Niger, and then Mutanga in Zambia. The Madoauela Project is located approximately 10 km south of the town of Arlit and Orano Mining’s mining subsidiaries of Cominak and Somair, in north central Niger. Deposits are hosted within sandstones of the Tim Mersoi Basin. The Madaouela Mine Permit was approved in January 2016, with approval of the Environmental Permit in July 2015. Infrastructure includes road access, labour, ground water and available grid power.
The key highlights from the Pre-Feasibility Study are as follows:
- The Madaouela Project contains Mineral Resources (November 2017) of 111 Mlb U3O8 in the Measured and Indicated categories, and 28 Mlb U3O8 in the Inferred category.
- Probable Mineral Reserves are 60.54 Mlb U3O8.
- Uranium recovery is forecast at 93.7%.
- Annual production is forecast at 2.69 Mlb U3O8 for 21 years.
- Cash Operating Cost is forecast at US$24.49 per pound of U3O8.
- Start-up Capital Expenditure is estimated at US$359 million.
Further recovery and cost optimization will be the focus of the Feasibility Study that SRK and SGS will complete.
GoviEx has an integrated four-part strategy to advance the Madaouela Project towards a production decision. This strategy includes debt finance structuring, for which Medea Capital has been appointed as adviser; off-take structuring, with advice provided by Holihan Lokey; project equity financing; and lastly, project optimization and completion of the appropriate engineering, for which SRK and SGS have been appointed.
Qualified Persons
The scientific and technical information disclosed in this release has been reviewed, verified, and approved by Dr. Rob Bowell, a chartered chemist of the Royal Society of Chemistry, a chartered geologist of the Geological Society of London, and Fellow of the Institute of Mining, Metallurgy and Materials, who is an independent Qualified Person under the terms of National Instrument 43-101 for uranium deposits.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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1 An independent NI 43-101 technical report was prepared for the Madaouela Project in 2015 to a pre-feasibility level of confidence. The report titled “An Updated Integrated Development Plan for the Madaouela Project, Niger” has an effective date of August 11, 2015, and a revision date of August 20, 2015, and is available at GoviEx’s profile on SEDAR at www.sedar.com.
About GoviEx Uranium
GoviEx is a mineral resource company focused on the exploration and development of uranium properties in Africa. GoviEx’s principal objective is to become a significant uranium producer through the continued exploration and development of its flagship mine-permitted Madaouela Project in Niger, its mine-permitted Mutanga Project in Zambia, and its other uranium properties in Africa.