GoviEx Uranium (GXU) - All 3 African Projects Now in Play

GoviEx Uranium Inc. is a Canadian uranium development company focused on its uranium projects located in three different African countries. The company boasts a resource inventory of over 220 million pounds (lbs) of U3O8 in measured, indicated and inferred resources. The company’s asset portfolio consists of the Madaouela project, located in Niger, the Mutanga project, located in Zambia and the Falea project, located in Mali.

Company Overview

The African mineral sector remains open to foreign direct investments, according to Major. The sector has started to incorporate ESG components into its mining acts in an attempt to not only uplift local communities but also protect the environment.

The global uranium market has seen a shift in supply and demand in the last few months according to the company. The shift in the market is due to a more conscientious approach to procurement from the power utility sector. The global uranium market is attempting to move away from Russia regarding the procurement of enriched uranium products (EUP), which has shown to be an opportunity for alternative uranium suppliers to enter the global market.

GoviEx Uranium Inc. recently announced that it had commenced a field program at its Mutanga uranium project. The company plans to develop the project following its flagship Madaouela uranium project. The field program is planned to include 15,500 m of infill drilling which will be aimed at updating the Mutanga project’s Dibwe East resource from the inferred to the indicated category. The program further includes a hydrogeological study, 9,000 m of diamond drilling, process verification and optimisation test work and geotechnical studies. The various results of the planned field program will be implemented towards the completion of a feasibility study of the Mutanga project.

Foreign direct investment in Africa

The African mineral resource sector is one of the most endowed environments globally, possessing vast potential, yet is plagued by various factors. One such factor is the aptly named “resource curse” a phenomenon which refers to the failure of many resource-rich countries to benefit fully from their natural resource wealth. In general, these countries are also more authoritarian, more prone to conflict, and less economically stable than countries without these resources.

The decline in foreign direct investment into Africa is also a challenging factor many countries experience. The decline in foreign direct investment is due to labour and natural resource endowments no longer being sufficient to attract financial capital. The lack of infrastructure including energy generation and distribution, roads, rails and airports as well as low human capital, referring to the absence of skilled, educated and healthy labour force and low institutional capital, referring to weak security and judicial systems, weak property rights, and poor regulatory and standards also lead to the decline in foreign direct investment.

Daniel Major, the CEO of GoviEx Uranium Inc. explains the current African mineral sector as follows:

“You get competing issues here. You have on the one side, the resource curse and the dread that that's going to continue to occur. On the other side, there's a complete pragmatism that the only people who are really going to put money in a foreign country are companies, and people are comfortable with that.”

The African mineral sector has adapted and changed in recent years according to Major. The sector is more focused on Environmental Social and Governance (ESG) values, with various countries creating legislation forcing the distribution of foreign direct investment into local businesses and communities.

“…it's ESG driven, the Human Rights Code is in it. There is a commitment to the environment here, which is the other bit that is coming through, which has been pushed through in all of the African nations for a long time: local procurement and local recruitment.”

Major sums up the ESG-centric view of African countries as follows:

“That’s what it’s about: you want to put your money in? We’re happy with that. Develop projects? Yes, you have to, because it’s very hard for African groups to do that, but help us to develop our communities, help us develop training, help us develop the infrastructure with it, and we’ll share the benefits. These are African resources, let us share the benefits.”

Major believes that the hesitance experienced by some investors regarding Africa’s ESG-centric view is due to investors and companies not understanding ESG values. Major believes that most mining operations have been implementing ESG values without knowing it, he states:

“…mines have always had to run with health and safety. You bring people into work every day, you want to send them home. You impact the environment, no matter what you do, and you want to limit that impact on the environment.”

He further explains that not only have ESG values been implemented without the knowledge of various parties, but they may also add value to operations through its iterative fundamentals.

“…It's a mindset because if you do ESG properly, it's a circular process of review, plan, and do it again, action. And you keep going round in circles. If you do that in any business, even in your own business, you think about what you're going to do. How do I improve for the future? You then react to that and respond to it a year later to see if it's still working, and you go around. That's actually what ESG is all about. It's not that difficult. We've been doing it for years. It's just been rebranded.”

Major argues that ESG values have been implemented in the mineral sector for years and that the focus on ESG is only a new word for traditional standards:

“If you are borrowing money from a bank, you have to follow IFC standards. IFC standards are ESG, and IFC Standards have been there for ages, so if you are following those, you are doing ESG anyway.”

The global uranium markets

The global uranium market has seen a shift in supply and demand in the last few months according to Major. The shift in the market is due to a more conscientious approach to procurement from various power utilities, to not source enriched uranium products (EUP) from Russia or its allies. The move away from Russia is due to the country’s activities in Ukraine. The high demand for EUP by various countries is due to the commitments the countries have made toward less greenhouse gas emissions. Major explains the current global uranium market as follows:

“…all those guys who used to buy from Russia are now knocking on our door saying, we don't want to talk to those guys in Russia. Can we get EUP from them? And they were like, well, we only have this much UF6 left, and the only way to make more is to overfeed it, but then it won't last as long, so we're going to run out really quickly if we do that.”

Major believes that diversity in supply is the only solution in which the global uranium market will be able to meet its future projected demand, and believes that the African uranium sector has the potential to play an integral part in the global uranium market, he states:

“Africa is seen as a really good option. One point was made at the conference, which is that no one is sanctioning Africa in any shape, form or otherwise. There is no country in Africa that supplies uranium that has any issues - buy from Africa.”

Projects

GoviEx Uranium Inc. has three African projects with which it aims to supply the global Uranium market. The company’s asset portfolio consists of the Madaouela uranium project in Niger, the Mutanga uranium project in Zambia and the Falea uranium project in Mali. The Madaouela uranium project is located in north-central Niger close to the town of Arlit. The project is owned by the Nigerien mining company, Compagnie Miniere Madaouela SA (COMIMA) which GoviEx Uranium Inc. owns 80% of, with the remaining 20% of the company owned by the government of Niger. The Madaouela uranium project boasts 11 million pounds of U3O8 in the measured and indicated category and 28 million pounds of U3O8 in the inferred category. The project’s mining operations are envisioned to consist of both underground as well as open-pit activities with open-pit mining planned at the project’s Miriam deposit, and underground room and pillar mining planned at the project’s Marianne-Marilyn, MSNE and Maryvonne mineral deposits.

The Mutanga uranium project of the company is located 200 km south of the Zambian capital city Lusaka. The project has a mineral resource estimate (MRE) of 15.2 million pounds of U3O8 in the measured and indicated category and 44.9 million pounds of U3O8 in the inferred category. The Mutanga uranium project is expected to have an 11-year life of mine and possess an 88% uranium recovery. The project consists of five main deposits namely the Mutanga, Dibwe, Dibwe East, Njame, and Gwabe deposits. The Zambian government has granted the project a mining licence, which is based on an open-pit and heap leaching operation. The project is envisioned to produce an average of 2.4 million pounds of yellowcake per year.

The Falea project of the company is a 225 km2 land package, with only 5% thereof having ever undergone exploration initiatives. The project has a mineral resource estimate of 17.4 million pounds of U3O8 in the measured and indicated category and 13.4 million pounds of U3O8 in the inferred category. The project also hosts copper and silver mineralisation.

Recent activity

GoviEx Uranium Inc. announced at the End of April that it had initiated its 2022 field program at the Mutanga uranium project. The field program is aimed at targeting key aspects that will enable the company to progress the project to a feasibility study stage. The field program is planned to consist of 15,500 m of infill drilling, which will enable the project's mineral resource estimate to be upgraded to the indicated category. The infill drilling program will implement down-hole percussion drilling to an average depth of 120 m in a nominal 100 m by 50 m grid.

GoviEx Uranium Inc. also announced that it would complete an additional 9,000 m of diamond drilling which will be aimed at determining uranium disequilibrium factors for the Mutanga uranium project’s Dibwe East and Dibwe deposits. The diamond drill samples will also be implemented in various metallurgical testing programs, process verification and optimisation test work and geotechnical studies. The company will also conduct hydrogeological test work at the project which will be aimed at identifying a sustainable water source.

GoviEx Uranium Inc. further intends to update the Environmental and Social Impact Study (ESIA) of the Mutanga uranium project as well as the project’s relocation action plan at the beginning of July 2022. The company has further commissioned various downhole logging services which include calibrated gamma logs to be created which will be used to correlate uranium grades, hole deviation and conductivity logs aimed at further interpreting the project’s geology.

Future Initiatives

The development of the Madaouela uranium project remains the company’s main focus for 2022, with the Mutanga uranium project in Zambia and the Falea uranium project in Mali also set to be advanced. The mine-permitted Mutanga project in Zambia is forecast to start production in 2027 and could be the lowest capital-intensive uranium project in Africa.

The company aims to publish a feasibility study for the Mutanga Uranium project in the future, which will be based on the planned infill drilling results. The company will continue to be focused on its ESG values, with it remaining committed to the development of the local communities around its projects. The contracts awarded to conduct the 2022 field program at the Mutanga uranium project have been awarded to companies based in Africa, with the vast majority of these companies being Zambian.

To find out more, go to the GoviEx website