GoviEx Uranium (TSXV:GXU,OTCQB:GVXXF) said on Thursday (July 4) that the Niger government has revoked its rights to the perimeter of the Madaouela mining permit, placing it in the public domain.
Niger's political landscape has been unstable since a coup d’état last July. General Abdourahamane Tiani's military junta took control of the country at that time, ousting President Mohamed Bazoum.
While GoviEx initially expressed optimism that it would be able to operate as normal at Madaouela, in April the government said it could lose its mining permit if it didn't commence mining operations by July 3.
Last week's decision from Niger sent GoviEx's share price down 35 percent, the most in eight years.
The Madaouela project has been under development since 2007. GoviEx has made significant investments in exploration and development, completing 650,000 meters of drilling and publishing a feasibility study in 2022.
According to the company, with uranium prices in recovery Madaouela was "poised for development." GoviEx was in the process of completing necessary regulatory steps, and received a radiological certificate in June.
The initial capital expenditure for the asset was set at US$343 million; it was expected to create up to 800 jobs over its 20 year mine life, while providing substantial royalty payments and taxes to the Niger government.
GoviEx maintains in its press release that Niger did not follow the appropriate procedure when withdrawing its mining permit for Madaouela. While it wants to engage with the government, it may challenge the decision in court.
GoviEx’s permit revocation comes on the heels of Niger's decision to cancel French nuclear group Orano's mining permit for the Imouraren uranium project. Despite the setback, GoviEx continues to advance its Muntanga uranium project in Zambia, with a feasibility study expected in the second half of 2024.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
