Why uranium is clean energy
“If you want clean energy, you’ve got to have uranium.“, says Daniel Major, CEO of GoviEx Uranium, one of the most exciting investment prospects in the space We caught up with him in advance of Mines and Money London www.London.minesandmoney.com
Daniel Major - Chief Executive Officer, GoviEx Uranium
Andrew Thake, Mines and Money
21st August 2018
Mines and Money: Can you tell us a little about GoviEx Uranium?
Daniel Major: GoviEx is a mineral resource company focused on the exploration and development of its African uranium properties. GoviEx’s principal objective is to become a significant uranium producer through the continued exploration and development of its mine-permitted Madaouela Project in Niger, its mine-permitted Mutanga Project in Zambia, and its Falea Project in Mali.
GoviEx was founded in 2007 by Govind Friedland (son of Robert), and started out by targeting Niger and the Tim Mersoi Basin, which has been producing uranium since 1971. We have successfully taken the Madaouela in Niger project to the mine-permitting stage.
In 2016, GoviEx acquired Denison’s African uranium projects and in 2017, GoviEx acquired a mine-permitted project in Zambia from African Energy.
GoviEx now has two fully mine-permitted projects, and holds one of the largest NI 43-101 uranium resource bases in combination amongst its peer group, with combined Measured Resources of 36.2 Mlbs U3O8, Indicated Resources of 107.3 Mlbs U3O8, and Inferred Resources of 86.0 Mlbs U3O8.
Mines and Money: How has the last 12 months been for you?
Daniel Major: The last 12 months have been a game of two halves, as football commentators like to say. During the last six months of 2017, the uranium market was directionless, with the uranium spot price trading sideways. In 2018, the uranium price is showing what we believe are the first signs of recovery.
Mines and Money: Everyone is talking about the recent rise in uranium price – what’s driving it and is it sustainable?
Daniel Major: 2018 represents a change in fortunes for the uranium market. Demand continues to grow; the World Nuclear Association’s recent report highlighted the increase in global nuclear electricity output to 2506 terawatt hours (TWh), an increase of 29 TWh compared to 2016, and 160 TWh higher than in 2012. At the end of 2017, the global nuclear capacity encompassed 448 operable reactors, with 59 reactors under construction. Both 2015 and 2016 showed additional nuclear power plant grid connections, with ten each, and there have already been more grid connections in 2018 than in the whole of 2017.
The supply side has reacted aggressively to sustained lower uranium spot prices, with additional cutbacks to Kazakh production and the placement of Paladin Energy’s Langer Heinrich mine on care and maintenance. The biggest supply-side development has been Cameco’s decision to indefinitely suspend operations at its McArthur River operation in Canada. This move not only eliminates a significant amount of forward production from the market (16 to 21 million pounds (Mlb) U3O8 annually), but will also compel Cameco to purchase additional inventory to meet forward sales commitments, thus further reducing supplies.
Mines and Money: What recent news would you like to highlight to investors attending about GoviEx?
Daniel Major: According to Ux Consulting, 2018 uranium production is forecast to total 136 Mlb, and secondary supplies are estimated at 48 Mlb. Demand is estimated at 191 Mlb, thus projecting a deficit of 7 Mlb. Together, these factors are creating optimism in the uranium market, and GoviEx Uranium is poised to take advantage of what comes next. GoviEx has two permitted mines ready to go. In the uranium mining business, permitting is key. In Niger, we managed to get permitting done in six months; in jurisdictions like Canada, permitting takes a lot longer.
Our next steps are to start our final feasibility study and move towards production. For investors, this represents a real opportunity, as we will expect a re-rating as we move from explorer/developer to developer/producer.
Mines and Money: What challenges and risks do you see for the next 12 months?
Daniel Major: Some of the risks we face are the same as those faced by others who focus on the development of their mines in conjunction with improving commodity prices.
Some of our challenges are more unique, such as mining the middle of the Sahara Desert. We are overcoming the construction challenge of building a mine in the desert by adopting a modular construction of the plant – in other words, we plan to pre-build before transporting to the Sahara.
Mines and Money: What do you think the uranium industry needs to do to improve its reputation?
Daniel Major: I wish we could address and overcome the ‘Hollywood’ misperception of the uranium industry. Nuclear energy is a low-cost energy source. Uranium is highly regulated and extremely safe.
If you want clean energy, you’ve got to have uranium.