GoviEx Uranium Inc (TSX-V:GXU, OTCQX:GVXXF) told investors that it has started its 2022 field program on its 100%-owned and mine permitted Mutanga uranium project in Zambia.
Mutanga is one of three African projects owned by GoviEx, which it said it plans to develop following its flagship Madaouela uranium project in Niger.
The company said the field program will target key aspects that will help progress the Mutanga project towards completion of its feasibility study and potential subsequent funding and construction.
READ: GoviEx Uranium set to kick off drilling at its Falea project in Mali
"We are a multi-asset developer on track to deliver on the feasibility study for our mine permitted Mutanga Project,” the company’s CEO Daniel Major said in a statement. “This is two years after we plan to deliver the feasibility study for our Madaouela Project in Niger, which is due in the first half of this year. With increased uranium prices driven by strong market fundamentals, the Mutanga Project continues to be a key asset for GoviEx."
Dibwe East resource upgrade drilling
GoviEx said the planned field program at Mutanga includes 15,500 metres (m) of infill drilling, with the aim to upgrade the Dibwe East resource from the Inferred to the Indicated category, extending the work completed by the company in 2021. The drilling is planned to use down-hole percussion drilling to an average depth of 120m in a nominal 100m x 50m grid.
The company said it has also commissioned 9,000m of diamond drilling to obtain core samples for uranium assays that will be used to determine uranium disequilibrium factors for the project’s Dibwe East and Dibwe deposits. The drilling will also provide metallurgical samples for process verification and optimisation test work and geotechnical studies.
As part of the 2022 field programme, it said a hydrogeological study will be conducted to find a reliable water source for the plant and to carry out the dewatering studies for the open pits. It has also commissioned an update of the ESIA and Relocation Action Plan beginning in July 2022.
Finally, the company has commissioned downhole logging services including calibrated gamma log used to correlate uranium grades, hole deviation and conductivity logs to interpret the geology.
As part of its commitment to environmental, social and corporate governance (ESG) GoviEx said all contracts awarded for the 2022 field program are to companies based in Africa, with the vast majority being in Zambia.
The economics of the Mutanga Project
Based on its 2017 Preliminary Economic Assessment, GoviEx reminded investors that the Mutanga Project is planned as an open pit, heap leach operation with an 11-year mine life forecast to produce 2.6 million pounds (Mlbs) of U3O8 (triuranium octoxide) per year, based on a mineral resource of 15.2 Mlbs U3O8 contained in the Measured and Indicated and 44.9 Mlbs U3O8 contained in the Inferred category.
Uranium recovery is forecast at 88% with relatively low capital intensity. Start-up capex is estimated to be US$123 million and cash operating costs are forecast at US$31.1/lb U3O8.
GoviEx noted that the Mutanga Project has access to extensive infrastructure including road, groundwater and grid power, and also benefits from a low stripping ratio and low sulfuric acid consumption. The PEA assumed a 9% mining royalty that was applicable at the time, which has subsequently been revised by the Zambian government to 5%.
At recent prices, the project has a 34% internal rate of return (IRR) and a net present value (NPV) of US$189 million, the company added.
GoviEx Uranium is a mineral resource company focused on the exploration and development of uranium properties in Africa.
The company'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 the author at stephen.gunnion@proactiveinvestors.com