Cameco digs into exploration in Niger

Tuesday, 26 August 2008

Canadian uranium giant Cameco has taken a stake in a company exploring for the mineral in Niger, marking its first foray in the country.

 

Cameco announced late last week that it had taken 11% of GoviEx, which was founded by Govind Friedland, for $28 million. The firms have agreed a strategic alliance which could see Cameco's stake expand to 48% over the next four years at a cost of up to $212 million.

 

GoviEx holds exploration properties of 2300 square kilometers near the existing Arlit uranium mine in Niger, as well as 2400 square kilometers near Agadiz. The company is currently drilling to confirm historical uranium exploration data on the Madaouela deposits in the area near Arlit and demonstrate them to current reporting standards.

 

The process for Cameco to grow its stake would first see it take an additional 10% of GoviEx for $31 million, after the completion of a due diligence review expected by the end of this year. Cameco said its arrangements with GoviEx stipulate the the capital input would be used for uranium exploration.

 

Should Cameco decide to take the extra 10%, it would gain the right to take up to "about 48%" of GoviEx. This would cost between $145 million and $212 million dependent on the timing of the purchase, Cameco said.

 

At present, France's Areva is the only company with operating uranium mines in Niger. However other mining outfits including Rio Tinto and China Nuclear International Uranium Corporation (SinoU) have government permits to explore for uranium.

 

Niger is among the world's top five uranium-producing countries. At the end of 2005 its reasonably assured resources of uranium were 173,000 tonnes recoverable for less than $40 per kg, with a further 7000 tonnes at up to $80 per kg. Inferred resources are 45,000 tonnes at up to $80 per kg. All are in sandstone.