GoviEx set to develop Niger uranium mine

Drilling for uranium in the Nigerian desert. Source: GoviEx Uranium Inc.

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Drilling for uranium in the Nigerian desert. Source: GoviEx Uranium Inc.

GoviEx Uranium Inc. [GXU-TSX; GVXXF-OTCQB] said Monday April 8 that it has reached a framework deal with the government of Niger, Africa to jointly develop the company’s flagship Madaouela uranium project.

“This is the culmination of more than 12 years of relentless work and millions of man hours by GoviEx management and our Nigerien community,” said GoviEx Executive Chairman Govind Friedland. Govind is the son of Singapore-based mine financier Robert Friedland.

The company also said it is proceeding with a non-brokered private placement offering of up to 15.9 million units at 17 cents each. The offering is expected to close on April 12, 2019.

Under the terms of the offering, each unit consists of one Class A common share and one Class A common share purchase warrant, entitling the holder to purchase one Class A common share for a period of 36 months at 21 cents in the first 12 months, 24 cents during the second 12 months, and 28 cents during the third 12-month peirod.

Investors reacted to the news by sending GoviEx shares up 5.26% or $0.01 to 20 cents on active volume of over 1.3 million. The shares trade in a 52-week range of 12 cents and 25.5 cents.

GoviEx is focused on the exploration and development of its African uranium properties. Its principal objective is to become a significant uranium producer via the continued exploration and development of its mine-permitted Madaouela Project, its mine-permitted Mutanga Project in Zambia and Falea Project in Mali.

The company’s shareholders include Cameco Corp. [CCO-TSX; CCJ-NYSE], Denison Mines Corp. [DML-TSX], and privately-owned Ivanhoe Industries.

On Monday, GoviEx said it has received a letter signed by the Honourable Hassan Braze Moussa, Minister of Mines, Republic of Niger, supporting a commercial framework reached between GoviEx and the government of Niger during previous meetings.

“The support letter further directs GoviEx and the respective Ministry of Mines representatives to work together to finalize and document these commercial understandings, the intention of which is to rapidly progress GoviEx’s flagship Madaouela uranium project in Niger,” the company said in a press release.

The commercial understanding agreed in the support letter positions GoviEx to advance the Madaouela Project as a fully permitted uranium project, currently with 50.54 million pounds of U3O8 in probable mineral reserves and a predicted 21-year mine life.

GoviEx said the key commercial terms now agreed in principle between the government and GoviEx will need to be finalised in definitive agreements and remain subject to government, GoviEx board of directors, and other regulatory approvals. The key terms of the agreement are as follows:

The government will acquire a 10% working interest in the Madaouela Project for US$14.5 million. That is in addition to its 10% free carried interest provided under the 2006 Niger mining code.

GoviEx will retain a right of first refusal to acquire the government’s 10% working interest in the project on any proposed sale by the government.

GoviEx’s existing mining permit will be expanded to include previous mineral resources discovered by GoviEx in the Agaliouk permit.

The expansion of the Madaouela 1 Mining Permit will add a further 5.96 million pounds of U3O8 in the measured and indicated categories.

GoviEx will be granted nine-year permit terms for its Madaouela 2, 3, and 4 and Anou-Melle exploration permits, which had reached the end of their exploration periods under the 2006 Niger mining code. These renewals allow GoviEx to maintain its highly prospective mineral exploration potential alongside its mine development program for the Madaouela Project.

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