Vancouver-based GoviEx Uranium (TSX-V:GXU) says the Niger Government has revoked the company’s mining rights over the perimeter of the Madaouela Project.
The company says the decision does not follow the withdrawal procedure prescribed under the applicable mining code, and it reserves the right to challenge the decision before the competent national or international jurisdictions.
GoviEx has completed 650,000m of drilling since it started operations in Niger in 2007, with the project now host to measured and indicated resources of 96.9 million pounds of uranium and inferred resources of 19.6 million pounds.
With the recent rise in uranium prices, GoviEx was starting to move ahead with the development of the Madaouela Project despite the 2023 coup that resulted in the ejection of the African country’s French-allied president.
This has caused uncertainty in the region, with Niger having strengthened its ties with Russia. Following the coup, French nuclear power company Orano had its operating permit revoked for the Imouraren deposit, which hosts reserves of around 200,000 tonnes of uranium.
GoviEx says in the past year it has secured expressions of interest for project related debt finance of over US$200 million ($297 million), started social and environmental due diligence with a prospective lender, and updated its environmental and social impact assessment.
Front-end engineering designs and initial ground works, including the construction of an access road, and exploitation were also underway.
In June, the company, which has a market capitalisation of C$48.8 million ($53.3 million), received its radiological certificate, which is a regulatory requirement to start mining operations.
“GoviEx believes that the government’s decision to withdraw the mining rights for the Madaouela Project will have a negative impact on the economic and social development of the region,” the company says.
“With a forecast initial capital expenditure of US$343 million, as well as considerable employment opportunities, the project was forecast to create up to 800 jobs over its projected 20-year mine life, with substantial royalty payments and taxes payable to the government.”
A September 2022 Feasibility Study forecast the mine would produce 50.8 million pounds of uranium over the life of mine, averaging 2.6 million pounds each year.
This would deliver US$1.57 billion in earnings before interest, taxes, depreciation and amortisation, at an average annual rate of US$82.6 million, and net free cashflow of US$673 million.
Since the Feasibility Study was released, the uranium price has more than doubled to hit a peak of US$106 a pound in January this year. It is still up over 75% at just under US$86.
Write to Angela East at Mining.com.au
Images: GoviEx Uranium
