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.
It almost took my breath away; the wind howling through London’s streets was bitterly cold. I was in the city back in late November to tape an interview with a member of the world’s most famous mining families, Govind Friedland. Govind’s father, billionaire Robert Friedland, has been responsible for some of the world’s largest and most lucrative mining projects of the last 30 years.
I wanted to meet with Govind and his team because just two weeks before arriving in London I was in Niger. The West African country is the world’s fourth-largest producer of uranium and is home to a gigantic uranium project being pushed forward by Goviex Uranium (TSXV:GXU), a resource company Govind built.
Goviex has a 100 million+ pound uranium discovery near the mining town of Arlit, in the northern part of the country that straddles the Sahara Desert. Since the 1970’s Arlit has been home to Niger’s two operating uranium mines both run by Areva, the French nuclear energy giant.
What I discovered in Niger surprised me. Goviex has a project that everyone in the country seems to want exploited. Fast.
I met with government officials ranging from the local governor of the town of Arlit to Niger’s Minister of Mines. All of them told me Goviex is a tremendous partner and they’re each doing what they can to quickly move the project from a dream to reality. The company already has its mining permit (granted in only 6 months back in early 2016) and is now looking to raise the money to build the mine.
I initially thought the government’s enthusiasm was based on Goviex’s unique 100% Nigerien employment policy. The company doesn’t hire expats to drop in and run the mine the way Areva does. But, after some digging I came up with the real rationale: Areva’s operations are old and it’s no secret that at least one of their mines is running out of ore. The Nigerien government is hugely dependent on tax revenues derived from Areva’s mines. If one shuts down, there will be a massive hole in the government’s budget that only a new mine will fix. Enter Goviex.
Back in London I wanted Govind to explain why he felt a uranium miner was something investors should be looking at? After all, uranium prices are at decade lows and the nuclear industry still hasn’t fully recovered from Japan’s Fukushima disaster caused by the 2011 earthquake.
His answers, and the answers of his able CEO, Daniel Major, were absolutely compelling. They matched what I found on the ground in Niger. Both Govind and Daniel made a convincing case that uranium prices are on their way back up and that their mine, tentatively scheduled to be operational by 2020, will be coming online at just the right time.
I walked away extremely impressed. Goviex already lays claim to some very serious shareholders; roughly 57% of the company is owned by the combination of Cameco, Toshiba, Ivanhoe Industries and Denison Mines. After spending a week on the ground in Niger, now I know why. They saw the same thing I did: incredible opportunity.
The story I produced represents what I saw in Niger. It’s a country allied with The West, open for business with a solid government and well-trained security force. And, they want Goviex to build a mine. Watch my mini documentary to find out more.
Important disclaimer: Goviex Uranium is a CEO.CA sponsor and the author is long GXU at the time of writing, which makes him biased. Additionally, GoviEx Uranium is a high-risk penny stock that is not suitable for most investors. The above article and video is for informational purposes only and is neither a solicitation for the purchase of securities nor an offer of securities. Readers of the article are expressly cautioned to seek the advice of a registered investment advisor and other professional advisors, as applicable, regarding the appropriateness of investing in any securities or any investment strategies, including those discussed above. All facts are to be verified by the reader. Either the author, CEO.CA or its consultants may from time to time hold or transact in the securities mentioned.
The above article and video may contain forward-looking information within the meaning of applicable securities laws. All information and statements other than statements of current or historical facts contained in this press release are forward-looking information. Forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed here and elsewhere in GoviEx’s periodic filings with Canadian securities regulators. When used in this news release, words such as “will”, “could”, “plan”, “estimate”, “expect”, “intend”, “may”, “potential”, “should,” and similar expressions, are forward-looking statements. Information provided in this document is necessarily summarized and may not contain all available material information. Forward-looking statements include, without limitation, statements regarding expected benefits of the Transaction, those with respect to the use of the proceeds raised under Placement and other statements that are not facts. Forward-looking statements are based on a number of assumptions and estimates that, while considered reasonable by management based on the business and markets in which GoviEx operate, are inherently subject to significant operational, economic and competitive uncertainties and contingencies. Assumptions upon which forward looking statements relating to the transaction have been made include that the uranium market may be reaching a turning point and that the long-term fundamentals of the uranium market remain incredibly strong In addition, the factors described or referred to in the section entitled “Financial Risks and Management Objectives” in the MD&A of GoviEx and “Risk Factors” in Denison’s Annual Information Form dated March 24, 2016, which are available on the SEDAR website at www.sedar.com, should be reviewed in conjunction with the information found in this news release. Although GoviEx has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in the forward-looking statements, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate or that management’s expectations or estimates of future developments, circumstances or results will materialize. As a result of these risks and uncertainties, the Transaction could be modified, restricted or not completed, and the results or events predicted in these forward looking statements may differ materially from actual results or events. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this news release are made as of the date of this news release, and GoviEx disclaims any intention or obligation to update or revise such information, except as required by applicable law, and GoviEx does not assume any liability for disclosure relating to the other company herein. Cautionary Note to United States Investors Concerning Estimates of Measured, Indicated and Inferred Mineral Resources: This press release may use the terms “measured”, “indicated” and “inferred” mineral resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize them. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted into mineral reserves. United States investors are also cautioned not to assume that all or any part of an inferred mineral resource exists, or is economically or legally mineable.
