GoviEx shares plummet after Niger cancels $343m project permit

This video frame grab image obtained by AFP from ORTN - Télé Sahel on July 28, 2023 shows General Abdourahamane Tiani, Niger's new strongman, speaking on national television and reads a statement as "President of the National Council for the Safeguarding of the Fatherland", after the ouster of President-elect Mohamed Bazoum. The chief of the Presidential Guard justifies the coup by evoking "the continued deterioration of the security situation" in the country, as well as "poor economic and social governance". (Photo by ORTN - Télé Sahel / AFP) (Photo by -/ORTN - Télé Sahel/AFP via Getty Images)

SHARES in GoviEx fell 29% by the close of trade on Thursday after the firm announced Niger had withdrawn the mining permit to the Madadouela uranium property.

“GoviEx Uranium has been informed by the Government of the Republic of Niger, by way of a letter from the Minister of Mines, that it no longer has rights over the perimeter of the Madaouela mining permit, which is now in the public domain,” it said.

The development is an enormous blow to the company which has had Madadouela in development since 2007. GoviEx CEO Daniel Major, with the company for most of that time, was this year hoping to close financing for the $343m project.

Miningmx reported in April that Niger’s military junta was putting pressure on GoviEx to start mining Madaouela by July or risk “revocation of its mining permit”. GoviEx said today the loss of its permit was not in line with the country’s mining code.

On March 18 GoviEx reported that it had started front-end engineering designs for Madaouela.  This followed an earlier statement on March 4 that GoviEx had started financing due diligence to fund the proposed mine.

It said today expressions of interest for $200m in funding had been received while other development milestones had been reached including initial ground works and exploitation.

“GoviEx believes that the Government’s decision to withdraw the mining rights for the Madaouela Project will have a negative impact on the economic and social development of the region,” the company said.

The former government of Niger under President Mohamed Bazoum was overthrown in a military coup in July last year after which a military junta led by General Abdourahamane Tiane took over.

The junta then kicked French troops out of the country and severed security pacts with the European Union leaving Western Allies concerned that Niger could become a new foothold for Russia in the region, according to Reuters.

The new government has moved to swiftly to cut ties with the West while encouraging more cooperation with Russia.

Last month the country revoked the operating licence of French nuclear fuel producer Orano at one of the world’s biggest uranium mines, as it continues to cut ties with former colonial power France, according to a report by news service, Aljazeera.

State-owned Orano said it had been ordered out of the Imouraren mine in northern Niger which sits on an estimated 200,000 tons of the metal, the news service said.

The government of Niger holds a 20% stake in COMIMA which is the Nigerian company set up to develop Madaouela. Major said recently the coup had “created some challenges” but that he was optimistic this could change, and the company continued to engage with lenders and potential off-takers.

The company would continue to “progress its mine-permitted Muntanga project in Zambia and is expected to publish its feasibility study in the second half of 2024”, it said.