Canadian developer GoviEx has confirmed the strength of its Madaouela project, in Niger, delivering a positive feasibility study at a time when inflationary pressures are having a significant impact on the development of new projects and operating mines.
The feasibility study, prepared by SRK Consulting and SGS Bateman, projects an initial capital outlay of $343-million for a mine that will produce 50.8-million pounds of triuranium octoxide (U3O8) over a 19-year mine life.
The study yielded an aftertax net present value, using an 8% discount, of $140-million and an internal rate of return of 13.3%.
Based on a uranium price of $65/lb and a molybdenum price of $11/lb over the life-of-mine, the project is forecast to produce $672-million in free cash flow, including capital expenditure, and is forecast to produce an average of $82-million in earnings before interest, taxes, depreciation and amortisation every year.
“We are delighted with the series of elegant engineering solutions our technical team has achieved to place the Madaouela project ready for development and to potentially become one of the first new mines developed in this exciting new uranium cycle,” said CEO Daniel Major, adding that the next steps would be to accelerate project financing and to continue to pursue offtake opportunities.
Executive chairperson Govind Friedland added that GoviEx believed that the results of the feasibility study would appeal to stakeholders, potential investors, customers and lenders, allowing the company to evaluate a wide range of development.
GoviEx aims to start producing in 2025, subject to project financing.
Madaouela is one of the biggest uranium resources in the world, with 100-million pounds of U3O8 in measured and indicated mineral resources, and inferred resources of 20-million pounds.
The feasibility study is based on a self-sustaining operation, including process plant and renewable power supply with no reliance on third-party facilities.