GoviEx Uranium has filed a prospectus for an initial public offering with the securities commissions of Ontario and British Columbia and plans to use the net proceeds to pay for environmental and social impact assessments, as well as a pilot plant for its Madaouela uranium discovery in Niger.
It also plans to repay a US$30-million bond held by Toshiba Corp. by issuing 29 million Class A common shares.
Madaouela — a project GoviEx describes in its prospectus as situated “in the heart” of Niger’s uranium-producing district — is within 10 km of the Somair and Cominak uranium mines, which are partly owned and operated by French uranium giant Areva.
The advanced-stage exploration property is made up of seven contiguous tenements called Madaouela I, II, III, IV, Anou Mellé, Agaliouk and Eralrar. The company holds exploration permits for five of the tenements and expects exploration permits from Agaliouk and Eralrar.
GoviEx has conducted most of its exploration and development drilling on seven deposits on the Madaouela I and Agaliouk tenements called Marianne–Marilyn, Miriam, MSNE, Maryvonne, MSCE, MSEE and La Banane. (The MSEE and La Banane deposits are wholly situated on the Agaliouk tenement, however, so if the Niger government does not issue permits for Agaliouk, the resource numbers for those two deposits will be lower.)
The deposits’ measured resources total 9.6 million tonnes grading 0.108% uranium oxide (U3O8) for 22.9 million contained lb. U3O8, and indicated resources of 22.6 million tonnes grading 0.151% U3O8 for 75.3 million contained lb. U3O8 Inferred resources add 7.47 million tonnes at 0.146% U3O8 for 24.1 million lb. U3O8.
GoviEx has identified more targets, including extensions at Miriam northwest, MSNE, and La Banane, as well as MSEE.
The company states it has “exploration potential in greenfield locations in Madaouela II, III, IV, Anou Mellé and Eralrar, subject to approval of the Eralrar exploration permit.”
A technical report on the project completed by SRK envisioned a base-case production rate of 2.53 million lb. U3O8 annually over an 18-year mine life.
At a long-term uranium price of US$70 per lb. U3O8 (including the recovery of 590 tonnes of molybdenum dioxide, or MoO2, at a sales price of US$11 per lb.), the technical report calculates the project would have an after-tax net present value of $251 million at an 8% discount rate, and a 21.9% internal rate of return, including royalties and by-product credits.
“Management believes, and SRK concurs, that the Madaouela uranium project is attractive from a technical and economic perspective and justifies pursuit by GoviEx toward further reserve definition, feasibility study and completion of the environmental and social impact assessment and project development,” the prospectus states.
The technical report estimates initial capital costs of $339 million, life-of-mine capital costs of $646 million and cash operating costs of US$26.39 per lb. U3O8, excluding royalties, and US$33.10 per lb. U3O8 including royalties.
GoviEx says Niger has been exporting uranium since 1971, that its 2006 mining law “encourages foreign direct investment” and that “the country’s permitting process is transparent.” Under the country’s mining code, once an exploration licence is converted to a mining licence, the company that holds the mining licence should transfer 10% of shares to the Niger government. The government could also buy another 30% equity interest at fair market value.
The prospectus notes that “infrastructure in the vicinity of the Madaouela project includes power lines connecting the nearby town of Arlit to the state-owned Sonichar coal mine and power station, and an asphalt road to Agadez and on to Niamey, Niger’s capital city.”
The company plans to offer a minimum of 697,674 and a maximum 2.3 million Class A common shares priced at $2.15 per share, for proceeds of between $1.5 million and $5 million.
Daniel Major, the company’s CEO, did not respond to an emailed request for comment on the offering before press time.
Govind Friedland, the company’s executive chairman and the son of mining magnate Robert Friedland, graduated with a degree in geology and geological engineering, with a focus on exploration geology, from the Colorado School of Mines in 2000.
Before forming GoviEx Uranium, Friedland provided business-development services for over five years to Ivanhoe Mines and Ivanhoe Energy throughout the Asia Pacific.
Between 2007 and 2011, and as CEO of GoviEx, Friedland raised $100 million to fund acquisitions, finance exploration and pursue other corporate initiatives focused on the company’s uranium assets in Niger.
Friedland also co-founded Ivanhoe Industries, the parent company of I-Pulse Inc., which provides technological solutions for mining, oil and gas, and advanced manufacturing sectors based in Toulouse, France.
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