Investors unmoved by Goviex Niger project despite fears over uranium supply deficit

Daniel Major, CEO, Goviex

GOVIEX trimmed the pre-production costs of its proposed Madaouela uranium mine in a feasibility study this week but the market didn’t respond marking the stock down 16% in the last five days.

Results of a feasibility study put the capital cost at $343m compared to the $347m in a prefeasibility study published in February last year. The reduction in upfront costs came despite major cost inflation which has assailed the mining sector since last year.

Shares in the company, however are down 33% this year.

According to Goviex CEO, Daniel Major Madaouela – which is situated in Niger – has the potential to become one of the first new mines “in this exciting new uranium cycle”. The firm would set about “accelerating” financing of the project.

Madaouela will have life of mine uranium production of 50.8 million pounds averaging 2.67 million pounds of uranium oxide over 19 years, produced at a total operating cost of $95.58 per ton before discounting molybdenum by-product credits.

The project comes amid fresh concerns that uranium could become the next critical metal of which the world is short, according to a Bloomberg News article.

In another article by the newswire, uranium funds have soared recently. The $1.8bn Global X Uranium ETF has rallied about 30% and the $1bn Sprott Uranium Miners ETF is up nearly 43% from their July 6 lows.

Meanwhile, the Sprott Physical Uranium Trust, which holds about $3bn worth of the radioactive material, has jumped about 30% since its July 13 bottom, the newswire said.

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