MINING | GoviEx Uranium
African Business Network
GOVIEX URANIUM A growing Africa-focused uranium company
MINING | GoviEx Uranium
GoviEx Uranium is a uranium development company with three advanced projects in Niger, Zambia and Mali. From these African assets, GoviEx boasts a total resource of around 230 million pounds of uranium in the ground, along with plenty of exploration upside at each property. The business was established in 2007 by Govind Friedland, the son of highlysuccessful North American mining entrepreneur Robert Friedland. At the time, Govind was living in Beijing and suffering the effects of the dangerous pollution that was engulfing the city as a result of the wide-scale burning of fossil fuels. It was at this point that Govind realised the necessity for alternative, clean sources of energy across the world and foresaw a bullish market for uranium. Not long after the company was formed, an opportunity arose to acquire five mineral licenses in Western Niger, within one of the world’s most significant sandstone-hosted uranium deposits: the Tim Mersoi Basin. By March 2013, the company had used a local drilling company named Esafor to complete 650,000 metres of drilling across the property, which had been christened the
African Business Network
MINING | GoviEx Uranium
Daniel Major explains how the company’s
A mid-tier uranium producer
cornerstone asset has progressed over the
Thus, GoviEx became a multi-asset,
last five years.
Africa-based uranium firm with three
Madaouela Uranium Project. GoviEx’s CEO
advanced development projects, and from “Just after that [March 2013], we completed
a shareholder structure point of view, the
our first pre-feasibility for the property.
company became comprised of four major
We submitted the mine application during
shareholders: Denison Mines, Govind
2015 and by January 2016 the mine was
Friedland, Cameco and Ivanhoe Industries.
fully permitted from both a mining and environmental permit perspective.”
This impressive capital structure provides a strong layer of industry knowledge from
Then in June 2016, GoviEx completed a
Denison and Cameco, two veterans of the
transaction with fellow Canadian miner
global uranium space along with another
Denison Mines, which was to prove a
experienced mining industry participant in
significant development in the company’s
Ivanhoe.
overall story. The deal saw the latter increasing its shareholding in GoviEx to 25%,
With a total resource estimate of 230
and in return, GoviEx became owners of
million pounds of uranium across its African
Denison’s other projects in Africa.
African Business Network
projects, GoviEx is set to comfortably fit into
up, they are very large and would have an
the mid-tier of global uranium assets within
impact on the market if they were to turn up
the next five to 10 years.
tomorrow.”
Major admits that none of the three projects
In the aftermath of the 2011 Fukushima
will fit into the large-scale bracket defined
disaster, the nuclear industry went through
by mines such as Cameco’s McArthur River
what Major calls a ‘cultural shock’ with panic
and Cigar Lake in Canada, but he points to
spreading through international markets. For
the fact that all of the company’s assets are
example, Japan shut down all of its nuclear
targeted towards producing more than 2.5
facilities for a full safety review and public
million pounds per annum for an extended
sentiment in Germany shifted sharply away
period of time.
from nuclear energy in favour of renewables.
“That is positive as well because we are
The result of this shift in attitudes on nuclear
already permitted for two of our projects,
energy was a drop in demand for uranium
and so when we come into production, we
across the world, which subsequently pushed
can slot in without making a major impact
the commodity price down, leaving the
on the market. If you look at some of the
uranium mining industry in a quandary.
big Canadian projects that are due to come
MINING | GoviEx Uranium
An end to the nuclear thaw?
somewhere, and the only large, clear energy baseload source is nuclear,” claims Major.
In recent years however, Major has observed sentiments changing once again, with
This realisation has been reflected in a
countries warming towards nuclear as
rising growth in nuclear demand at 3% while
a viable energy source, having received
generation levels have returned to pre-
reassurance through the widespread
Fukushima levels. “The Japanese are ramping
introduction of new safety measures and
up their re-starts. They currently have eight
protocols.
and are increasing that number, and the Chinese are on a very strong growth build at
“As renewables have tried to increase
the moment with over 15 reactors currently
their stake, there has been an increasing
under construction.
realisation that you do also need to have a baseload clean energy source from
“We have now reached the fastest rate of
Resource GlobalNetwork Network African Business
reactor build for the last 25 years and new
pounds of uranium will come off the market
countries are coming onstream such as
in the next 10 years as older mines reach the
the UAE and India, who are building very
end of their life, plus about 15 million pounds
fast; importantly, the US is now proactively
of secondary feed will also come off the
protecting its nuclear reactors.”
market in the next five years.
Despite these positive developments taking
“The other risk the industry is facing is
place in markets across the world, the
the permitting process in some regions,
nuclear industry is faced with a big strain
particularly in Canada, where you’re looking
on the supply side, as a number of major
at anywhere between 10 and 20 years to
uranium mines reach depletion over the next
permit a uranium project.”
decade. This lengthy permitting process described In fact, Major postulates that about 30 million
by Major could contribute to a potentially
MINING | GoviEx Uranium
African Business Network
Daniel Major, CEO damaging lag in new supply coming online,
Key project parameters at Madaouela include
and sharply brings into focus the fact that
a 21-year mine life and production of 2.7
GoviEx has already fully permitted its projects
million pounds per annum of uranium at a
in Niger and Zambia.
cash cost of roughly US$25 per pound, with
Madaouela
pre-production capital at about $359 million; however, Major is hopeful that GoviEx
At Madaouela in Niger, the company has
can improve on these metrics in the final
completed three different pre-feasibility
feasibility through its various optimisations.
studies on the project and is now working on further optimisations before it kicks off the
The company is looking at modularising
definitive feasibility study later this year.
construction to accelerate the process and is also assessing the potential use of hybrid
“We’ve been looking at what we can do to
power at the site.
reduce consumables and reduce the size of the plant amongst other improvements, so
“Our current model takes power from Niger’s
that when we do the final feasibility study,
coal-fired national grid, but because the
it will be as optimal as we can get it,” says
project is located in the Sahara Desert, it
Major.
seems logical to leverage the 12 hours of sun a day by using solar.”
MINING | GoviEx Uranium
GoviEx also believes that a hybrid power
offtake participation. Once the strategy has
system could reduce costs on power by
been carried out, GoviEx will commence
about 25-30% compared to using the coal-
construction work at Madaouela, with the
fired grid alone, while a hybrid system would
mine slated for completion within three
also provide greater flexibility.
years.
“We have Medea Capital Partners working on
Mutanga and Falea
the debt financing for the project and have
GoviEx’s other near-term, fully-permitted
got expressions of interest from a number
project is the Mutanga project in Zambia,
of export credit agencies and commercial
which is giving the company a very nice
banks. We’ve also appointed Houlihan Lokey
problem to have. “That project is causing us
as our advisors on offtake,” he explains.
some grief because it is almost as good as Madaouela,” quips Major.
This crucial financing stage of the project seems to be in good hands, owing to the fact
Strengths of the Mutanga project include
that individuals from Medea and Houlihan
the fact that it is a relatively straightforward
were part of a former team at Société
project. GoviEx is planning to develop an
Générale who worked on debt financing
open pit, heap leach operation with very low
for several major projects during the last
acid consumption.
uranium cycle in Africa. The project also has a low CAPEX of $120 The final step of the company’s ‘fully-
million for 2.5 million pounds per annum
funded’ development strategy is project
along with plenty of exploration upside.
equity financing, after project debt and
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The company has recently completed radon
silver and copper credits. In addition, an
and trending work at Mutanga, which has
external company had previously completed
provided a number of interesting drill
a pre-feasibility study on the project, which
targets that the company will test over the
means there is a full mine design already
coming months. Major reveals that getting
waiting for GoviEx.
Madaouela into production remains the key short-term goal for GoviEx, but he anticipates
“Overall, we have a big resource, we have
that Mutanga is only a few years behind the
permits in place and our strategy is to get
cornerstone development.
these uranium projects going in an improving uranium market. That is the headline
“It will take three years to build Madaouela,
message we want to get across to investors,”
then another two or three years to get
concludes Major.
Mutanga going, so within five years we could have two operations producing between five
“We look forward to continuing our work to
to six million pounds of uranium per annum,
advance GoviEx’s mine-permitted projects
along with another advanced project in Mali.” in Africa, in cooperation with our host governments, stakeholders, and strategic The Falea project in Mali is currently smaller
partners,” adds executive chairman Govind
than Madaouela and Mutanga, but it offers
Friedland.
an interesting twist in the shape of significant
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