After having the mining license withdrawn by the Niger government at your most advanced project, GoviEx has re-focused its efforts on its Muntanga uranium project in Zambia. Can you bring us up to date with the change?

GoviEx had been doing everything we could to advance the Madaouela project.  As established in our DFS, we needed a baseline uranium price at US$65/lb to bring the project into production, and which was finally reached in October 2023. We had secured LOIs representing US$250 million in financing and started the construction of the main access road, and conducted topographic studies and design works, as well as other site works in view of the construction of the processing plant, but the Government nonetheless decided to withdraw our mining license. We see this decision as unlawful. We have sent notifications of dispute to the Government and initiated an administrative recourse in Niger, seeking an amicable solution. Such an amicable solution has not been reached, and we are looking at our legal options and will update our shareholders accordingly. 

Could you provide more details on the Muntanga project and the advancements towards a DFS?

Muntanga is a development project, with the DFS planned to be out by the end of this year. We did significant infill drilling between 2021 and 2023 to upgrade our resources from an inferred category. Today, 75% of the 45 million lb uranium resource is in the measured and indicated category, at a US$70/lb uranium price, based on the MRE put out in 2023. Muntanga is a very simple open-pit, heapleach operation. It benefits from very high recoveries and low acid consumption, as recently established in the recent metallurgical studies conducted. The rock is soft, and only need to crush it down to an inch in size, therefore not requiring milling. The land package on the Muntanga project comprises three licenses, over an area of 1,225.9 km². This year, we secured the option to acquire 51% of the Lundazi exploration license, strengthening our foothold in the country. 

GoviEx is the only developer of a uranium project in Zambia, a country known primarily for its copper endowment. Can you comment on the uranium opportunity in Zambia?

The Karoo Sands Basin, which Muntanga and our recently acquired Lundazi license sits on, stretches from Tanzania, through Malawi and Zambia, touching into Mozambique and Botswana, and going into Namibia, with a small section also crossing South Africa. These are sandstone-hosted uranium structures well-known in countries like Namibia or Malawi, but underexplored in Zambia. GoviEx is the only uranium explorer and developer on the Zambian cadastre system, with the only other company dealing with uranium as a deleterious material being Barrick at its Lumwana copper mine. However, Zambia was part of the main trucking route to move the uranium from the Kayelekera into Walvis Bay. GoviEx has engaged with the Radiation Protection Authority (RPA) of Zambia, as well as multiple NGOs, to make sure we are compliant in terms of the protections around radioactive materials. 

As the first uranium operator, we also have an advantage in being in a copper-focused country because copper smelting produces a lot of sulfuric acid byproduct –a key component in uranium extraction. With the Zambian government intently focused on increasing copper production, we have seen infrastructure improvements, with rail and road upgrades, as well as a strong focus on education and training to support the mining sector. In order to train the affected communities around our project, GoviEx has worked with the Department of Education to start our Back to School program. 

How do you find the legislative environment in Zambia after the country has gone through significant changes in recent years?

The entire mining department and cadastre have been overhauled with the change of government. The new government is pushing forward to see the development of new mines. The biggest criticism we have, as an industry, is that sometimes proposals are put on the table without enough details provided, and it can take some time before we receive clarifications. For instance, the proposal to increase the government stake in mining companies was rather vague, but we now have clarity that this change will only apply to new licenses. There seems to be good communication between the ministry, the chamber, and the industry, as opposed to having the government simply impose laws without listening to the industry first.

How are uranium prices evolving?

The problem with uranium is that you have two prices out there: the spot price and the term price. The spot price is highly volatile because the market is tiny and shrinking further as more buyers shift to term contracts to secure long-term supply. However, the big picture for uranium has never been so good. The World Nuclear Association forecasted a 28% increase in uranium demand over 2023-30, and the International Atomic Energy Agency showed a 2.5 times increase in nuclear demand between now and 2050. Nuclear power is becoming normalized. An increased number of existing reactors are expanded, and new ones are built. SMRs (small nuclear reactors) are also coming into the picture strongly, becoming serious targets for investment from tech companies. Banks and big funds (like Apollo) that would have never looked at nuclear before are now investing in this space. A big driver is AI and the exponential energy used by data centers to power AI functions. Doing a search on an AI platform like ChatGPT takes 10 times more energy than doing that same search on Google. Wells Fargo projects AI power demand to surge from 8 TWh in 2024 to 652 TWh by 2030. A reactor provides about 20 to 30 GW, which means we are short of 20 to 30 brand-new, state-of-the-art, big reactors just to meet the potential demand of AI, without even considering other incremental sources of energy demand like EVs.