ISSN 2330-717X

Uranium Firms Adjust To COVID-19 Impact


Kazatomprom’s uranium inventory will enable it to meet its commitments should mine production or the ability to physically deliver material be impacted by the COVID-19 outbreak, the company said yesterday.

Meanwhile, GoviEx Uranium Inc has cancelled the second tranche of a non-brokered private placement offering, while NxGold Ltd and Mega Uranium Ltd have mutually agreed not to proceed with a proposed business change that would have seen Nx become a uranium-focused investment issuer.

Kazatomprom is the world’s biggest producer of uranium, with attributable output representing about 24% of the global volume in 2019.

Galymzhan Pirmatov, CEO of the Kazakh company, said the coronavirus outbreak was first and foremost a global human emergency but will “undoubtedly” have a growing impact on businesses and world economies.

The company’s current priority is the health and safety of its people and it has put “strict preventive measures in place” to protect employees and their families, he said. “As of today, we remain committed to our 2020 production and sales plans, but the situation is changing rapidly, and we are preparing for various scenarios accordingly,” he added.

Kazatomprom’s uranium mining sites are primarily in remote areas in the southern regions of Kazakhstan and to date the pandemic has had no impact on its operations. The remoteness of those sites requires, however, that production, maintenance, catering and support staff stay on site and live in close quarters while at work.

COVID-19 could pose a significant health and safety concern if an outbreak were to occur in such a setting, the company said. “Kazatomprom will not hesitate to take any actions necessary to keep people safe, ensure the environment is protected and our assets are properly managed during this global pandemic. Actions taken could result in lower production due to pre-emptive suspensions of one or more operations,” it added.

In the event that mine production or the ability to physically deliver material is impacted, Kazatomprom’s production decisions and contractual obligations are backed by inventory, the company said. As of 31 December 2019, it had more than 8500 tU of inventory on an attributable basis, which it says is equal to about eight months of 2020 attributable production.

Market conditions affect transactions

GoviEx Uranium Inc, said yesterday it had cancelled the second tranche of a non-brokered private placement offering of units, the first phase of which was completed in February with gross proceeds of about CAD2.3 million (USD1.6 million). The Vancouver, Canada-based company said it still intended to proceed with the planned updated pre-feasibility study (PFS) for its flagship Madaouela uranium project in Niger, by the end of May.

“The last two weeks have seen staggering volatility and devaluation in all sectors of the international equity markets and increasing economic uncertainty as governments and investors address the ongoing impact of the COVID-19 pandemic,” CEO Govind Friedland said. The company will “wait for markets to settle” before returning to the market for future financing, he said.

Owing to adverse market conditions, NxGold Ltd and Mega Uranium Ltd have terminated a proposed change of business that would have seen the gold-focused exploration and development company become a uranium-focused investment issuer, along with the acquisition of a portfolio of securities from Mega.

The transaction, which was announced in December, was “well received by industry participants” but “it has become apparent over recent weeks that, given the current state of capital markets and the business environment generally, the timing is not right to bring this new investment vehicle to market”, the companies said.

Toronto-based Mega’s principal uranium properties are Ben Lomond and the Maureen uranium deposit which are both in Queensland, Australia.

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