The government of Zambia has reinstated the mining licence for GoviEx Uranium’s (TSXV: GXU; US-OTC: GVXXF) Chirundu property, part of the junior’s Mutanga project.
“The Zambian Government has indicated its strategy to diversify its mining industry from the heavy weighting of base metals and advancing its long-term desire to include uranium and clean baseload nuclear power as part of its economic development plans,” said Govind Friedland, the company’s executive chairman.
The licence was cancelled in July 2020 and its reinstatement is subject to the completion of exploration and development milestones that will advance the licence towards a final feasibility study.
Preliminary economic assessment (PEA)
The company acquired the permit in late 2017 from African Energy Resources, and it included the Njame and Gwabe deposits. Both assets, GoviEx said, were subsequently included in the preliminary economic assessment (PEA) for the company’s Mutanga uranium project.
Shortly after the acquisition, the junior included Chirundu with its Mutanga, Dibwe and Dibwe East deposits in a technical report and SRK completed a preliminary economic assessment in November 2017. Due to the smaller scale and higher cost nature of the two deposits, they were scheduled to be mined in the later stages of the PEA and were not included in the mine plan.
The early stage study envisioned open pit mining and heap leaching over an initial mine life of 11 years and pegged pre-production capex of $121 million. The PEA also estimated operating costs of $31.10 per lb. U308.
The PEA was based on 5.9 million measured tonnes grading 0.04% U308 for 4.8 million lb. U308; 15.7 million indicated tonnes grading 0.03% U308 for 10.4 million lb. U308; and inferred resources of 74.6 million tonnes averaging 0.03% U308 for 44.9 million lb. U308.
Over the last year, GoviEx’s shares have traded in a range of 12¢ and 39¢ and at presstime were trading at 32¢.The junior has about 530 million common shares outstanding for a market cap of $170 million.
