GOVIEX may seek damages as it looks to legal measures following the cancellation of a mining permit for Madaouela, an uranium deposit in Niger.
The West African country’s military junta withdrew the licence on July 4, claiming Goviex had failed to develop the prospect quickly enough.
In a letter to shareholders today, Goviex chairman, Govind Friedland said Niger’s decision to withdraw Madaouela’s mining rights did not follow the procedure under the nation’s mining code. “We are fully prepared to pursue all necessary legal avenues to defend our rights,” he said.
In addition to contesting the decision in a letter to Niger’s mines ministry, the company would seek “an amicable solution” in terms of a Mining Convention. But, said Friedland: “We are starting the process to secure independent assessments of damages related to the withdrawal of our mining rights”.
Shares in Goviex, which are listed in Toronto, fell by nearly 30% on July 4. After a bounce to 80 Canadian cents a share, the stock is under renewed pressure falling to 65 Canadian cents/share today. The share is down about 55% since the start of the year.
Goviex is hoping Niger will be persuaded by the prospect that the cancellation of the mining ilcence will result in major delays in the development of Madadouela rated by Goviex as one of the world’s largest uranium deposits.
Since working on Madadouela since 2007, Goviex had developed the resource and had recently attracted $200m in funding interest. “Such delays are contrary to the government’s stated objectives for rapid development and economic progress in the region,” said Friedland.
Last month Niger revoked the operating licence of French nuclear fuel producer Orano at one of the world’s biggest uranium mines.
According to a report by news service, Aljazeera Niger’s new government intends to completely sever ties with its former colonial power, France. General Abdourahamane Tiane heads the new government following the overthrow Mohamed Bazoum in July last year.
In addition to contesting Niger’s decision and protecting its rights in respect of Madadouela, Friedland also said Goviex would press ahead with the development of its Muntanga Project in Southern Zambia. “Adversity often paves the way for reflection and re-evaluation,” said Friedland.
A feasibility on the project is expected to be completed by year-end. “We will not be defined by this setback but by our capacity to adapt and thrive,” he said.
