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 stated 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.
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.
Madaouela development
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 hand ad 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.
Niger’s moves
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 removed. 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.
Source: MINING.COM – Read More
