Troilus Gold brings potential funding from ECAs to $1.3 billion
The company has signed an additional LOI with Export Development Canada worth $300 million.
GoviEx Uranium (TSXV: GXU) no longer has rights over the perimeter of the Madaouela mining permit following the Niger government’s decision on Thursday to withdraw its licence, dealing a big blow to the development of one of the world’s largest uranium projects.
The Vancouver-based uranium miner had feared that its licence could be revoked if mining could not start by July 3, 2024, a deadline set by Niger’s military leaders who came into power around this time last year.
In a press release, the company said that the licence withdrawal “does not follow the procedure prescribed under the applicable mining code” in Niger, and it reserves the right to challenge the decision before the competent national or international jurisdictions.
Shares of GoviEx Uranium plummeted 41.2% to a 52-week low of C$0.50 by 2 p.m. ET on the latest development, dropping its market capitalization to C$38.3 million ($28.1m).
GoviEx also 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.
According to the World Nuclear Association, Niger is a top 10 uranium producer in the world and the second-largest producer in Africa. The ruling government currently has a 20% stake in GoviEx’s Madaouela project, which contains one of the largest uranium resources globally.
The company first began operations in Niger in 2007, and since then has completed an unprecedented 650,000 metres of drilling to define its potential mineral resource and advance the project through periods of low uranium prices.
The project reached its feasibility stage in late 2022. The technical report estimated that the Madaouela project could host proven and probable reserves of 5.4 million tonnes grading 0.87 kg per tonne uranium oxide (U3O8) for 12.3 million lb. of U3O8.
With an expected cost of $343 million, the Madaouela project was poised for development and had started to advance despite the political changes in Niger on July 26, 2023. Production over the life of mine is forecast at 50.8 million lb. of U3O8, or nearly 2.7 million lb. a year.
Over the past year, GoviEx has received expressions of interest in excess of $200 million for project-related debt finance, started social and environmental due diligence with a prospective lender, updated its environmental and social impact assessment, commenced front-end engineering designs and initial ground works, including the construction of an access road and started exploitation.
As recently as last month, the company received its radiological certificate, which is a regulatory requirement prior to starting mining operations.
Since January, Niger has temporarily suspended the granting of new mining licences and also ordered an audit of the sector. Madaouela now represents the second high-profile uranium project that the self-appointed government has taken away.
In June, French miner Orano had its permit for the Imouraren project revoked. That project, also containing one of the world’s largest reserves, had its permit awarded in 2009 but has been put on hold by the company pending favourable market conditions.
4 Comments
Lee A Orr
African nations are in their rights to control resources in their country and to do business with who they choose. Cut out those colonizers and let them show their true faces now that they are exposed as being needy nations not strong ones
Nicholas
The problem is, who is going to compensate the Western companies that did all of the front end work for these mines. 10-1 Russian or Chinese interest will take over and screw Niger harder than they even know with the threat of military assistance being cut off or even military intervention to protect their interests. The West should do it before Russia or China can in my opinion.
Pamela Judith
With all due respect Nicholas. African countries have a right to revoke licences to these western components because all they do is leach off these countries and offer nothing in return, and the worst is that these western countries leave a massive debris of nuclear waste which has poisoned rivers and the ground killing animals bid and small, cancer rates have sored in these countries and yet these companies do not clean up nor offer medical care for what they have caused. Lastly, they undercut the African and even when they promise to pay they never do because they understand declare their sales, hide the proceeds and in the case of Niger they actually down right refused to pay. Please do your research before you type.
Tende Minaseichinbo
While it is necessary to cut out toxic companies operating in Africa, we must learn to follow due diligence. Our crude behaviours must not be taken too far.