Mining Weekly

Canadian uranium miner GoviEx Uranium will acquire the uranium mineral interests of independent power producer African Energy Resources in Zambia, with the Zambian Competition and Consumer Protection Commission announcing in June that it had reviewed and provided its approval for the transaction.

“The combination of African Energy’s Chirundu and Kiriba Valley tenements with GoviEx’s Mutanga project will allow us to unitise these neighbouring properties, significantly enlarging and improving the potential economies of scale. This acquisition complements our strategy to be the consolidator of compelling African uranium projects while the uranium price remains low,” says GoviEx executive chairperson Govind Friedland.

The Chirundu and Kariba Valley properties to be acquired include a mining licence and two prospecting licences. The Chirundu mining licence covers two uranium deposits, Gwabe and Njame, containing Joint Ore Reserves Committee-compliant mineral resources of 7.4-million tons of triuranium octoxide (U₃O_{8), or yellowcake, in the measured and indicated categories, as well as 3.8-million tons of U3O8 in the inferred category.}

GoviEx’s acquisition of the Chirundu and Kariba Valley properties, combined with the Mutanga property it previously acquired from uranium miner Denison Mines, will provide a regional consolidation of uranium assets in Zambia, resulting in contiguous tenements of about 140 km in strike length. This includes three mine licences containing combined mineral resources of 15.2-million tons of U₃O₈ in the measured and indicated categories and 45.2-million tons of U₃O₈ in the inferred category.

Several high-priority drill targets have, moreover, been identified in the underexplored sections between the known deposits.

Multiple Projects
Meanwhile, in September, GoviEx announced that it had received expressions of interest from export credit agencies and project finance banks to arrange $220-million of senior debt financing for the construction of the Madaouela uranium project, in Niger. This followed the company’s appointment of investment firm Medea Capital Partners as project debt adviser for the project.

“The level of interest shown by the export credit agencies and the banks to provide financing accretes confidence in the Madaouela project. We will now proceed to the detailed due diligence phase with the various groups, while simultaneously moving forward on the other parts of our four-stage strategy,” says Friedland.

GoviEx’s board of directors is reviewing the expressions of interest received and will seek to enter into discussions with the lenders to determine the appointment of mandated lead arrangers to execute the project debt financing of the Madaouela project.

Key conditions from potential lenders include the release of a bankable feasibility study for the Madaouela project, following GoviEx’s continued optimisation work; long- term offtake contracts in place from creditworthy nuclear utility counterparties and export credit agency insurance cover being in place, based on the nationality of either the offtake or procurement counterparties.

The expressions of interest remain subject to final due diligence, credit committee and board approvals, as well as the negotiation of final loan documentation.