Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Niger’s Ministry of Mines issued a letter supporting the negotiations between Canada’s GoviEx Uranium (TSXV: GXU) and the country’s federal government regarding the Madaouela uranium project.
Although final documents on their commercial understandings are yet to be signed, the Vancouver-based miner and country authorities have agreed that the Government of Niger will acquire a 10% working interest in the project, in addition to its 10% free carried interest provided under the 2006 mining code.
To purchase the additional 10%, the Mahamadou Issoufou administration has elected to convert approximately $14.5 million in requested payments comprised of the final $7.8 million acquisition payment and settlement of previously challenged area taxes ($6.6 million) between GoviEx and the government related to the Madaouela project.
“This is the culmination of more than 12 years of relentless work and millions of man-hours by GoviEx management and our Nigerien community,” — Govind Friedland, GoviEx’s Executive Chairman
According to GoviEx, following the finalization of this transaction, the company will be effectively debt-free and it will enjoy a tax abatement period up through to successful project financing for mine construction and project development.
The proposed deals also consider that the Canadian firm’s existing mining permit, the Madaouela 1 Mining Permit, will be expanded to include previous mineral resources discovered in the nearby Agaliouk permit. This expansion will add a further 5.96 million pounds (Mlb) U3O8 in the measured and indicated categories.
Madaouela’s resource has been estimated at 60.54 Mlb U3O8 in total probable mineral reserves and a predicted 21-year mine life.
The 250-square-kilometre land package sits on the southeast side of the mining town of Arlit and was first discovered by the French Commissariat à l’Energie Atomique (CEA) in the 1960s. It was later explored by a series of different companies until GoviEx Niger Holdings acquired it in 2007.
