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MINING | GoviEx Uranium


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GOVIEX URANIUM A growing Africa-focused uranium company


MINING | GoviEx Uranium

GoviEx Uranium is a uranium development company with three advanced projects in Niger, Zambia and Mali. From these African assets, GoviEx boasts a total resource of around 230 million pounds of uranium in the ground, along with plenty of exploration upside at each property. The business was established in 2007 by Govind Friedland, the son of highlysuccessful North American mining entrepreneur Robert Friedland. At the time, Govind was living in Beijing and suffering the effects of the dangerous pollution that was engulfing the city as a result of the wide-scale burning of fossil fuels. It was at this point that Govind realised the necessity for alternative, clean sources of energy across the world and foresaw a bullish market for uranium. Not long after the company was formed, an opportunity arose to acquire five mineral licenses in Western Niger, within one of the world’s most significant sandstone-hosted uranium deposits: the Tim Mersoi Basin. By March 2013, the company had used a local drilling company named Esafor to complete 650,000 metres of drilling across the property, which had been christened the


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MINING | GoviEx Uranium

Daniel Major explains how the company’s

A mid-tier uranium producer

cornerstone asset has progressed over the

Thus, GoviEx became a multi-asset,

last five years.

Africa-based uranium firm with three

Madaouela Uranium Project. GoviEx’s CEO

advanced development projects, and from “Just after that [March 2013], we completed

a shareholder structure point of view, the

our first pre-feasibility for the property.

company became comprised of four major

We submitted the mine application during

shareholders: Denison Mines, Govind

2015 and by January 2016 the mine was

Friedland, Cameco and Ivanhoe Industries.

fully permitted from both a mining and environmental permit perspective.”  

This impressive capital structure provides a strong layer of industry knowledge from

Then in June 2016, GoviEx completed a

Denison and Cameco, two veterans of the

transaction with fellow Canadian miner

global uranium space along with another

Denison Mines, which was to prove a

experienced mining industry participant in

significant development in the company’s

Ivanhoe.

overall story. The deal saw the latter increasing its shareholding in GoviEx to 25%,

With a total resource estimate of 230

and in return, GoviEx became owners of

million pounds of uranium across its African

Denison’s other projects in Africa.


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projects, GoviEx is set to comfortably fit into

up, they are very large and would have an

the mid-tier of global uranium assets within

impact on the market if they were to turn up

the next five to 10 years.

tomorrow.”

Major admits that none of the three projects

In the aftermath of the 2011 Fukushima

will fit into the large-scale bracket defined

disaster, the nuclear industry went through

by mines such as Cameco’s McArthur River

what Major calls a ‘cultural shock’ with panic

and Cigar Lake in Canada, but he points to

spreading through international markets. For

the fact that all of the company’s assets are

example, Japan shut down all of its nuclear

targeted towards producing more than 2.5

facilities for a full safety review and public

million pounds per annum for an extended

sentiment in Germany shifted sharply away

period of time.

from nuclear energy in favour of renewables.  

“That is positive as well because we are

The result of this shift in attitudes on nuclear

already permitted for two of our projects,

energy was a drop in demand for uranium

and so when we come into production, we

across the world, which subsequently pushed

can slot in without making a major impact

the commodity price down, leaving the

on the market. If you look at some of the

uranium mining industry in a quandary.

big Canadian projects that are due to come


MINING | GoviEx Uranium

An end to the nuclear thaw?

somewhere, and the only large, clear energy baseload source is nuclear,” claims Major.

In recent years however, Major has observed sentiments changing once again, with

This realisation has been reflected in a

countries warming towards nuclear as

rising growth in nuclear demand at 3% while

a viable energy source, having received

generation levels have returned to pre-

reassurance through the widespread

Fukushima levels. “The Japanese are ramping

introduction of new safety measures and

up their re-starts. They currently have eight

protocols.

and are increasing that number, and the Chinese are on a very strong growth build at

“As renewables have tried to increase

the moment with over 15 reactors currently

their stake, there has been an increasing

under construction.

realisation that you do also need to have a baseload clean energy source from

“We have now reached the fastest rate of


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reactor build for the last 25 years and new

pounds of uranium will come off the market

countries are coming onstream such as

in the next 10 years as older mines reach the

the UAE and India, who are building very

end of their life, plus about 15 million pounds

fast; importantly, the US is now proactively

of secondary feed will also come off the

protecting its nuclear reactors.”

market in the next five years.

Despite these positive developments taking

“The other risk the industry is facing is

place in markets across the world, the

the permitting process in some regions,

nuclear industry is faced with a big strain

particularly in Canada, where you’re looking

on the supply side, as a number of major

at anywhere between 10 and 20 years to

uranium mines reach depletion over the next

permit a uranium project.”  

decade.   This lengthy permitting process described In fact, Major postulates that about 30 million

by Major could contribute to a potentially


MINING | GoviEx Uranium


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Daniel Major, CEO damaging lag in new supply coming online,

Key project parameters at Madaouela include

and sharply brings into focus the fact that

a 21-year mine life and production of 2.7

GoviEx has already fully permitted its projects

million pounds per annum of uranium at a

in Niger and Zambia.

cash cost of roughly US$25 per pound, with

Madaouela  

pre-production capital at about $359 million; however, Major is hopeful that GoviEx

At Madaouela in Niger, the company has

can improve on these metrics in the final

completed three different pre-feasibility

feasibility through its various optimisations.  

studies on the project and is now working on further optimisations before it kicks off the

The company is looking at modularising

definitive feasibility study later this year.

construction to accelerate the process and is also assessing the potential use of hybrid

“We’ve been looking at what we can do to

power at the site.

reduce consumables and reduce the size of the plant amongst other improvements, so

“Our current model takes power from Niger’s

that when we do the final feasibility study,

coal-fired national grid, but because the

it will be as optimal as we can get it,” says

project is located in the Sahara Desert, it

Major.

seems logical to leverage the 12 hours of sun a day by using solar.”


MINING | GoviEx Uranium

GoviEx also believes that a hybrid power

offtake participation. Once the strategy has

system could reduce costs on power by

been carried out, GoviEx will commence

about 25-30% compared to using the coal-

construction work at Madaouela, with the

fired grid alone, while a hybrid system would

mine slated for completion within three

also provide greater flexibility.

years.

“We have Medea Capital Partners working on

Mutanga and Falea

the debt financing for the project and have

GoviEx’s other near-term, fully-permitted

got expressions of interest from a number

project is the Mutanga project in Zambia,

of export credit agencies and commercial

which is giving the company a very nice

banks. We’ve also appointed Houlihan Lokey

problem to have. “That project is causing us

as our advisors on offtake,” he explains.

some grief because it is almost as good as Madaouela,” quips Major.

This crucial financing stage of the project seems to be in good hands, owing to the fact

Strengths of the Mutanga project include

that individuals from Medea and Houlihan

the fact that it is a relatively straightforward

were part of a former team at Société

project. GoviEx is planning to develop an

Générale who worked on debt financing

open pit, heap leach operation with very low

for several major projects during the last

acid consumption.

uranium cycle in Africa. The project also has a low CAPEX of $120 The final step of the company’s ‘fully-

million for 2.5 million pounds per annum

funded’ development strategy is project

along with plenty of exploration upside.

equity financing, after project debt and


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The company has recently completed radon

silver and copper credits. In addition, an

and trending work at Mutanga, which has

external company had previously completed

provided a number of interesting drill

a pre-feasibility study on the project, which

targets that the company will test over the

means there is a full mine design already

coming months. Major reveals that getting

waiting for GoviEx.

Madaouela into production remains the key short-term goal for GoviEx, but he anticipates

“Overall, we have a big resource, we have

that Mutanga is only a few years behind the

permits in place and our strategy is to get

cornerstone development.

these uranium projects going in an improving uranium market. That is the headline

“It will take three years to build Madaouela,

message we want to get across to investors,”

then another two or three years to get

concludes Major.

Mutanga going, so within five years we could have two operations producing between five

“We look forward to continuing our work to

to six million pounds of uranium per annum,

advance GoviEx’s mine-permitted projects

along with another advanced project in Mali.” in Africa, in cooperation with our host governments, stakeholders, and strategic The Falea project in Mali is currently smaller

partners,” adds executive chairman Govind

than Madaouela and Mutanga, but it offers

Friedland.

an interesting twist in the shape of significant

TSX-V:GXU OTCQB:GVXXF

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Published by Anderson Murray Media Ltd

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