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Cameco buys stake in Niger uranium explorer
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25th August 2008
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Uranium giant Cameco Corporation has acquired about 11% of Govi High Power Exploration (GoviEx) for $28-million, and formed a strategic alliance with the smaller company, which is exploring for the nuclear fuel in Niger.

Cameco also has an option to buy an additional 10% of GoviEx for $31-million, and could subsequently increase its holding in the company to as much as 48%.

GoviEx holds about 2 300 km2 of exploration property in the region around Arlit, Niger, as well as about 2 400 km2 near Agadez, in Niger.

The acquisition would further diversify Cameco's global exploration portfolio, president and CEO Jerry Grandey said in a statement.

"GoviEx has promising exploration property in a region with a long history of uranium mining, and has assembled an exceptional technical team with decades of experience in Niger."

Under the strategic alliance, Cameco can acquire another approximately 10% interest in GoviEx for $31-million, following completion of a due diligence review, which is expected by year-end.

The companies have agreed that most of the proceeds received from Cameco to acquire its ownership interests in GoviEx will be used for uranium exploration.

If Cameco decides to increase its ownership in GoviEx, it will then receive the option to increase its ownership interest up to a maximum of about 48% over the next four years, by exercising warrants issued by GoviEx and options granted on shares held by the principal shareholders of GoviEx.

Increasing its ownership to 48% would cost Cameco between $145-million and $212-million depending upon timing of the purchase.

Cameco will also have the right to appoint a GoviEx director, and two of five members of a technical committee that will oversee exploration activities. GoviEx will be the operator of its projects.


Edited by: Liezel Hill

 

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