GoviEx Uranium upsizes bought deal to $15 million

GoviEx Uranium Inc. [[GXU-TSX, GVXXF-OTCQB]said Friday it has upsized the value of a previously announced bought deal private placement financing to $15 million, up from the previous $12 million target. Proceeds are earmarked for exploration, engineering, and general corporate, and working capital purposes.

The upsized private placement consists of 85.7 million units priced at 17.5 cents per unit. Each unit consists of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one additional common share at an exercise price equal to the U.S. dollar equivalent of 25 cents for 24 months after closing, which is expected to occur by May 11, 2023.

The foreign exchange rate is to be set based on the Bank of Canada daily exchange rate for U.S. dollars on business day prior to the closing date.

For the avoidance of doubt, the previously announced underwriters option to purchase an additional 15% of the units at the issue price has been terminated, the company said.

Details of the upsized bought deal financing were released early Friday. On April 20, 2023, GoviEx shares traded at 20.5 cents in a 52-week range of 47 cents and 15.5 cents.

GoviEx is focused on the exploration and development of its African uranium properties. Its principal objective is to become a significant uranium producer via the continued exploration and development of its mine-permitted Madaouela project, its mine-permitted Mutanga Project in Zambia, and its multi-element Falea Project in Mali.

The company’s shareholders include Cameco Corp. [[CCO-TSX, CCJ-NYSE], Denison Mines Corp.[[DML-TSX], and privately-owned Ivanhoe Industries.

Based on a 2017 PEA, the Mutanga Project is an open pit, heap leach operation with an 11-year mine life. The PEA envisages production of 2.6 million pounds of U308 annually, based on a mineral resource of 15.2 million pounds in the measured and indicated category and 44.9 million pounds in the inferred category.

Uranium recovery is forecast at 88% with a relatively low capital intensity, with start-up capital expenditures estimated at U$123 million and cash operating costs at US$31.1 per pound of U308.

The Madaouela Project is located near Arlit in north central Niger, a key area for sandstone-hosted uranium deposits. The project is controlled 100% by the Nigerian mining company Compagnie Miniere Madaouela SA (COMIMA), owned 80% by GoviEx and 20% by the Government of the Republic of Niger.

Madaouela hosts 100 million pounds of U308 in the measured and indicated resource category. On top of that is an inferred resource of 20 million pounds. Feasibility results were announced on September, 2022.

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