GoviEx Uranium Inc (CVE:GXU) expects to provide an update on economics at its flagship Madaouela project in Niger in the first half of 2020 as it told investors it was optimistic on uranium market fundamentals.
In an update and letter to stakeholders from executive chairman, Govind Friedland and CEO Daniel Major, they noted: "GoviEx has one of the largest undeveloped uranium mineral resources in the industry."
Subject to increasing uranium prices, sufficient to obtain project financing, it (the firm) will move to develop its two mine-permitted projects, with the initial focus on the Madaouela site, the statement said.
As part of the agreement with Niger, GoviEx has now settled all outstanding tax claims and historical mining permit acquisition costs on the Madaouela 1 mining permit.
In addition, Niger has agreed to defer the payment of future area taxes for up to three years from the incorporation of the local operating mining company.
The Madaouela 1 mining permit has also been reshaped to include an additional 5.96 million pounds (Mlb) of uranium (U3O8) in the higher confidence measured and indicated category, and a new nine- year exploration permit was issued for around 1,547 sq km of exploration area contiguous to the Madaouela 1 mining permit.
Over the year, feasibility study consultants SRK Consulting and SGS Bateman have been looking at options that have significant potential to improve the feasibility of Madaouela and metallurgical test work is ongoing to verify initial results, and the firm expects to be able to update on project economics during the first half of 2020.
In April this year, GoviEx completed a financing for gross proceeds of C$3,502,000 and in addition received over US$1 million from Linkwood Holdings as part of its repayment of the US$2.75 million loan provided by GoviEx.
GoviEx says that even though the spot uranium price declined slightly in 2019, it saw reason for optimism in the uranium market fundamentals.
The World Nuclear Associations (WNA) fuel report issued in September highlighted improving market dynamics, and that demand expectations have improved in an environment of supply constraint and drawdown of utility inventories.
The report forecasted an improvement in nuclear energy demand of 2.0% CAGR (compound annual growth rate) in the reference case from the demand forecast in the previous report in 2017.
This improved forecast is supported by the reported 55 new reactors currently under construction and government policy changes resulting in extended reactor lives in the USA and France, said GoviEx Uranium.
"Our near-term goals are to deliver technical studies that synthesize the last 5 years of improvements in our resources, planned operations and process design that have the potential to reduce capital and operating expenses and improve resulting project economics," said the letter.