Govind Friedland & Daniel Major: Uranium Tides are Rising as Utilities Turn Like a School of Fish
GoviEx is a junior mining company that is focused on the long term. The spot price does not affect them much. Their view is that excess inventory has reduced the price and although current supply looks high, it’s not- compared to historic norms. Higher prices are required to capitalize uranium projects in both production and enrichment. Friedland and Major see existing global production declining and a steady annual demand growth of 3% per year.
Daniel tells us that they are currently focused on debt financing and due diligence on the equity side. They have just closed a deal with a Sprott led financing. They are excited about their radon X studies and have highlighted a very strong anomaly to drill. If they can add resource as an open pit mine it will defer their underground mine. They’re continuing with technical optimization for the project.
Govind discusses the difficulties in permitting processes around the world and how the area of Ariba, Niger in Africa has been great- as the infrastructure is already in place there. He talks about the Niger government’s competent mining infrastructure and legal code, the reasonable permitting process which can take as little as 6 months.
The utilities often play a cat-and-mouse game with the producers- both in spot and conditions, and they prefer to work with highly experienced people. Govind says they won’t see a major price move until the utilities come back in a major way. They have recently seen a 10-20% rally, and the utilities have begun expressing interest all at once. He hopes for a gradual increase in price throughout 2017, and thinks it could take a year or two for the supply gap to close.