The official decision on 232 was announced on Friday night. In our view this is positive for the overall uranium market, as we believe its resolution should allow utilities and producers to enter into long-term agreements, which should push the uranium price higher. While positive for the overall market, the premium that U.S. producers and developers had acquired over the last ~18 months is likely to come out of the market.
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 other uranium properties in Africa.
A new uranium bull market is coming – sooner than most people think. Our work suggests that the current price environment is unsustainable and that the long-term the price needs to increase 72% to more than US$55/lb U3O8e to stimulate the market enough to bring on new production (Figures 4, 5 and 6). In this report, we evaluate both the supply and demand fundamentals of the market, the real cost to bring on new supply and the price response required to do so. In addition, we evaluate most uranium companies and provide a detailed analysis of stocks that we believe are likely to benefit with the coming bull market.
Impact: Mildly Positive
GoviEx’s announcement of a signed letter of support from the Minister of Mines of Niger significantly de-risks the company’s permitted flagship asset and fast-tracks it to become an important uranium producer with strong leverage to the uranium price. Currently trading at a discount to peers, GoviEx is due to re-rate the next uranium up-cycle.
GoviEx announced a memorandum of understanding (MOU) with Windiga Energy to evaluate the feasibility of developing a solar-diesel energy power plant to supply the Madaouela project with low-cost renewable energy. While this is likely to only have an incremental impact on project economics, GoviEx remains one of the few late-stage development uranium companies positioned to start production in the next uranium up-cycle.