Annual Letter to Stakeholders Vancouver, British Columbia--(Newsfile Corp. - January 12, 2022) - GoviEx Uranium Inc. (TSXV: GXU) (OTCQX: GVXXF) ("GoviEx" or "Company") today provides a letter to stakeholders from the Executive Chairman, Govind Friedland and the Chief Executive Officer, Daniel Major.
To Our Fellow Stakeholders,
We enter 2022 following yet another unprecedented year. Whilst still adapting to a global pandemic, we are all, more than ever, faced with the reality of climate change and its devastating impact. COP26 has come and gone whilst governments remain unsure how to tackle the climate crisis. With increased energy prices and shortened supply of economically available low carbon energy sources, nuclear energy is coming into increased focus as a key part of the solution.
Despite all of its challenges, 2021 provided GoviEx with increased clarity and opportunity to execute our long-term strategy. With uranium prices improving, we can take greater confidence on our path to become a uranium producer.
Uranium prices rose 39% in 2021, trading at just under $46 per pound today.(1) Higher demand from new market participants has contributed to increases in spot prices, as the Sprott Physical Uranium Trust ("SPUT") alone now owns nearly 43 million pounds of uranium(1), which is approximately a third of the global annual supply. Whilst SPUT and other financial investors have helped to accelerate the increase in spot prices, the long-term fundamentals remain self-evident. Every year, more uranium is consumed than produced, and higher incentive prices are required to support new supply.
The recent crisis in Kazahkstan has highlighted the potential risk to output especially given the concentration of supply and this underlines the need for increased regional diversification that GoviEx's projects can provide.
Demand for uranium is forecast to increase as China looks to reduce its dependency on coal by pledging to build 150 new nuclear reactors by 2060. Nuclear power may be included in the EU's Sustainable Taxonomy Regulation and this could impact the industry by bringing investment towards nuclear, which is already Europe's largest single source of low carbon energy and forecast to grow.
The outlook for uranium has become increasingly positive and we have worked diligently to position ourselves to take full advantage as a new entrant to the market. In April we updated our pre-feasibility study for our flagship Madaouela project in Niger ("Madaouela"), reducing capex by 15% and opex by 20% in the first few years of mining.(2) Madaouela is fully permitted, benefits from well-established local infrastructure in a jurisdiction with a nearly a 50-year history of uranium exports. We are currently on track to finish our feasibility study by mid-2022 with a target to start construction in 2023 with first commercial uranium production in 2025.
In order to develop an optimum financing solution for Madaouela, last September we appointed Endeavour Financial, which is providing us with support on debt advisory, offtake finance and technical and environmental guidance. Endeavour Financial's track record in mine financing speaks for itself and their decision to work with GoviEx underlines the quality of Madaouela.
Whilst the development of Madaouela is our main focus for 2022, we also have two very promising assets which set us apart from other companies. The mine-permitted Mutanga project in Zambia is forecast to start production in 2027 and could be the lowest capital intensive uranium project in Africa.(3) In 2021 the team completed an initial infill drilling campaign at the Dibwe East deposit with positive results as we work towards upgrading mineral resources from an inferred to an indicated category. During 2022 we plan to complete infill drilling of the resource at Dibwe East as well as to upgrade the previously completed process test work to a feasibility study level of confidence.
Our Falea project in Mali remains a fascinating exploration project with great potential. It currently contains an indicated resource of 17.4Mlb U3O8, 24.4 Mlb copper and 16.1 Mlb silver, and an inferred resource of 13.4Mlb U3O8, also with copper and silver mineralization.(4) Work completed in 2021 has highlighted a number of geophysical exploration targets associated with the same structures that control the current mineral resources, but with the addition of gold mineralization. We look forward to drilling these Falea targets in 2022.
In 2021, we further strengthened our Board and management team by bringing in two additional directors; Salma Seetaroo and Erik Kraft, and appointing Chris Lewis as our Chief Uranium Marketing to spearhead our commercial offtake sales.
In 2021 we continued to deliver on our ESG strategy for the benefit of all our stakeholders. As we transition to becoming a producer, expanding our ESG mindset presents us with an opportunity to build an operation that can deliver economically as well as socially and environmentally. As our ESG plans develop, we seek compliance with a number of reporting standards, including IFC and ISO.
In summary, we believe GoviEx is in an excellent position to benefit from a strengthening uranium market. We have two mine permitted projects and an exciting exploration play. We have a plan in place to potentially become a producer in 2025, and a strong Board and management team ready to deliver on that plan. And finally we have you, our stakeholders, to support us on this journey.
We are truly grateful for the work completed by our teams in Niger, Zambia and Mali, and for the continuous support from the neighboring communities and all levels of government in these countries.
On behalf of management and the Board, thank you for your support. We appreciate your confidence in our 2021 accomplishments and our long-term strategy going forward and look to the future with confidence.
Sincerely, Govind Friedland & Daniel Major
bout GoviEx Uranium Inc.
GoviEx is a mineral resource company focused on the exploration and development of uranium properties in Africa. GoviEx's principal objective is to become a significant uranium producer through the continued exploration and development of its flagship mine-permitted Madaouela Project in Niger, its mine-permitted Mutanga Project in Zambia, and its multi-element Falea Project in Mali.
Contact Information
Isabel Vilela
Head of Investor Relations and Corporate Communications
Tel: +1-604-681-5529
Email: info@goviex.com
Web: www.goviex.com
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