The Madaouela Uranium Project (the Project) is located near Arlit, in north central Niger, in one of the most significant areas of producing sandstone-hosted uranium deposits in the world. The Project is controlled 100 % by the Nigerien mining company, Compagnie Miniere Madaouela SA ("COMIMA"), owned 80 % by GoviEx Uranium Inc., a public company listed in Canada; and 20 % by the Government of the Republic of Niger.

The Project is at the pre-feasibility study stage, for which five deposits have been developed to a high level of confidence (Marianne, Marilyn, Miriam, MSNE and Maryvonne). Current Project Mineral Resources are stated in Table 1. The study is based on detailed geological studies, metallurgical testing and processing options, mine design, infrastructure, rock mechanics, tailings, hydrogeological and environmental impact.

Mining schedules have been developed including open pit mining at the Miriam deposit, and room and pillar mining from Marianne-Marilyn, MSNE and Maryvonne deposits.

Ore processing at a rate of 1Mpta for the open pit is based on the following circuit: crushing; milling; two-stage tank leaching; molybdenum recovery by ion exchange (IX); and uranium recovery by solvent extraction (SX). The processing of the underground ore is the same as the open pit circuit but also includes a radiometric ore sorter (to remove waste dilution) and also a flotation circuit (to remove acid consuming gangue). The Project development plan envisions an average 2.48 Mlb per year eU3O8 yellowcake production rate over a twenty year mine life, with uranium recovery of 94.5 % and 92.5 % respectively from the open pit and underground mines based on mineral reserves. Initial capital costs are estimated at USD 347 M, LoM capital costs at USD 648 M, and cash operating costs of USD 56.38 /t ROM excluding royalties and bi-product credits.

The uranium and molybdenum production case encompasses recovery of on average approximately 539 t of MoO2 per annum at a sales price of USD 12.14 /lb. This production case provides project economics for this project at a long-term uranium price of USD 55 /lb U3O8 and indicates an after-tax NPV of USD 117 M (at 8 % discount rate) with an IRR of 13.7 % and a total life of mine (“LoM”) net free cash of USD 525 M.

It is noted that Mo, while present in all the metallurgical testwork, has not yet been included in the Mineral Resource model and hence is not considered to be at the same level of confidence as the U grades.

Figure 1: GoviEx land holdings – Madaouela Uranium Project

Mad I is to be mined by COMIMA which is owned 80% by GoviEx Uranium Inc. and 20% by the Government of the Republic of Niger. GoviEx has 100% ownership of MadI, Agaliouk and Eralral, and filed applications on January 30, 2019 for MAD 2,3,4 and Anou Melle which are pending. 

Table 1: Summary of the classified mineral resources in accordance with CIM guidelines for Madaouela (cut-Off: 0.4 kg/t eU) as of March 2, 2016

The company’s mineral resources as at March 2, 2016 are classified in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum’s “CIM Definition Standards - For Mineral Resources and Mineral Reserves” in accordance with the requirements of National Instrument 43-101 “Standards of Disclosure for Mineral Projects" (the Instrument). Mineral reserve and mineral resource estimates reflect the company's reasonable expectation that all necessary permits and approvals will be obtained and maintained. (1kg/t eU3O8=0.1% eU3O8). The “e” symbol denotes that resource estimation is based on spectrometer data obtained in the field and confirmed by a smaller number of samples by laboratory chemical analysis.

Mineral resources that are not mineral reserves do not have to demonstrate economic viability. Mineral resources are subject to infill drilling, permitting, mine planning, mining dilution and recovery losses, among other things, to be converted into mineral reserves. Due to the uncertainty associated with inferred mineral resources, it cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to indicated or measured mineral resources, including as a result of continued exploration.

Table 2: Capital expenditure

Capital costs include a 10 % contingency.

Table 3: LoM operating costs

A contingency of 5 % has been added on open pit and underground mining costs. 

Sensitivity

The following tables present NPV and IRR sensitivity results for changes in uranium prices and molybdenum grades, at the base U3O8 price of USD 55 /lb and 8 % discount rate.

NPV and IRR Sensitivity to U Price

A sensitivity to the molybdenum grade is presented in table below at the base U3O8 price of USD 55 /lb and 8 % discount rate.

NPV and IRR Sensitivity to Molybdenum Grade¹

¹ based on a USD 55/lb U3O8 price