GoviEx Uranium has received a letter from the Mining Cadastre Department of Zambia notifying the Company that it has terminated the Chirundu Mining License.
Under the Zambian Mines and Minerals Development Act of 2015, GoviEx is provided thirty days to appeal this decision, which the Company has every intention to do.
The Chirundu Mining License was acquired from African Energy Resources in October 2017 and includes the Njame and Gwabe mineral deposits. These deposits were subsequently included in the technical report titled, “NI 43-101 Technical Report on a Preliminary Economic Assessment of the Mutanga Uranium Project in Zambia”, dated November 30, 2017, prepared by SRK Consulting (UK) for the Company.
The PEA reported a Net Present Value at long-term uranium price of US$58/lb U3O8 and a 9% mining royalty rate, an after-tax NPV of US$112 million (at 8% discount rate) with an internal rate of return of 25%.
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The PEA is preliminary in nature, it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized.
Due to the smaller scale and higher cost nature of the Gwabe and Njame deposits they were scheduled to be mined in the later stages of the PEA. As a result, the exclusion of these deposits from the mine plan is believed to have a low to no impact on project economics.
Since acquiring the Chirundu Mining Permit GoviEx has ensured all statutory reports and payments have been made, and in addition has expanded its Community and Social Responsibility programs to cover the villages within the Chirundu Mining Licenses, including the reconstruction of a school and the commencement of an adult education program.
“We are disappointed by the decision made by the Mining Cadastre with regards the Chirundu license and do not believe this decision is fair or in the interests of our Zambian stakeholders.
“We will appeal the decision within the allotted time frame and hope to rectify any misunderstandings we believe were included in making this decision.
“Zambia has indicated its strategy diversify its heavy weighting towards copper, and with Zambia considering nuclear energy long term and with the uranium price showing signs of recovery we will stress that the decision should to be reconsidered,” states CEO Daniel Major.