Govex opts to sell Falea project to African Energy Metals for $5.5m in cash and shares

GOVIEX has sold its Falea project in Mali to African Energy Metals (AEM) for $5.5m in cash and shares, the Toronto-listed uranium developer said on Wednesday.

AEM will pay Goviex $500,000 in cash and shares totalling $2m. The balance of the consideration will be paid in shares once Falea’s mining licence is renewed by the Malian authorities. AEM has also agreed to pay Goviex a 3% net smelter royalty from Falea.

The sale of Falea would allow Goviex to focus on its Madaouela project in Niger where financing is currently underway as well as its Zambia prospect, Muntanga.

“This is a strategic deal which will allow GoviEx shareholders to maintain a significant interest in the Falea project whilst allowing the company to concentrate its efforts on the continued exploration and development of its two mine-permitted, advanced stage development uranium projects,” said Daniel Major, CEO of Goviex.

Commenting on its efforts to finance Madaouela, Major said earlier this month that a preliminary short list of about 20 institutions would begin a detailed due diligence on the project. These included project financiers, equipment suppliers as well as “alternative finance providers”.

In September, Goviex unveiled an optimised feasibility study trimming the capital expense of Madaouela to $343m compared to a previous estimate of $347m. 

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.