GoviEx Uranium arranges $5 million bought deal
GoviEx Uranium Inc. [GXU-TSX, GVXXF-OTCQB] said Tuesday it has arranged a $5 million bought deal private placement financing with proceeds earmarked for exploration and general corporate and working capital purposes.
GoviEx shares were among the most actively traded stocks on the TSX Venture Exchange, Tuesday. The shares eased 6.1% or $0.015 to 23 cents on volume of 2.24 million and are currently trading in a 52-week range of 21 cents and 52 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 its multi-element 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.
The shares were active Tuesday after the company said it had struck a deal with an underwriting syndicate in connection with a bought deal private placement financing of 22.75 million units of the company priced at 22 cents per unit, for proceeds of just over $5 million.
Each unit will consist of one Class A common share of the company and one-half of one common share purchase warrant. Each warrant entitles the holder to purchase one common share at the U.S. dollar equivalent exercise price of 33 cents for a period of three years following the closing date.
In addition, the company is granting the underwriters an overallotment option to purchase up to an additional number of units that is equal to 15% of the units issued in the offering. That option remains open on or before the date that is five business days prior to closing, which is expected to occur by October 20, 2022.
GoviEx was not specific about what it planned to do with the proceeds.
Based on a 2017 PEA, the Mutanga Project is an open pit, heap leach operation with an 11-year mine life. The PEA envisages production of 2.6 million pounds of U308 annually, based on a mineral resource of 15.2 million pounds in the measured and indicated category and 44.9 million pounds in the inferred category.
Uranium recovery is forecast at 88% with a relatively low capital intensity, with start-up capital expenditures estimated at U$123 million and cash operating costs at US$31.1 per pound of U308.
The Madaouela Porject is located near Arlit in north central Niger, a key area for sandstone-hosted uranium deposits. The project is controlled 100% by the Nigerian mining company Compagnie Miniere Madaouela SA (COMIMA), owned 80% by GoviEx and 20% by the Government of the Republic of Niger.
Madaouela hosts 111 million pounds of U308 in the measured and indicated resource category. On top of that is an inferred resource of 28 million pounds. Probable mineral reserves stand at 54.7 million pounds.