February 9, 2017 / 10:25 AM / 2 years ago

Goviex sees uranium market strong enough for new mine in 2020

* Spot prices still too low to justify new mines

* Chinese expansion driving demand

CAPE TOWN, Feb 9 (Reuters) - Uranium markets are showing signs of strength that should enable Canadian-listed producer Goviex to bring its Madaouela mine in Niger onstream by 2020, the company’s CEO said on Thursday.

Spot prices of uranium, used to make fuel for nuclear power production, have been depressed since the 2011 Fukushima disaster led Japan to shut down its reactors and created high stockpiles globally.

Goviex CEO Daniel Major said prices are still around $30 dollars per pound compared with the level of $50-to-$55 Goviex says it needs to build a mine.

But he said the fundamentals are stronger as China aggressively builds reactors and uranium markets start to face a supply shortage.

“The uranium market is permanently in operational production deficit. It survives by taking material out of stockpiles all the time. It doesn’t take much to tighten it up,” Major said on the sidelines of a conference in Cape Town.

Goviex operates in Africa, which Major says is a good environment for a uranium miner as licences are easily obtainable and the quality of the ore is good enough.

“It’s not just about the grade in our industry and the key thing is you can get permits in Africa,” Major said, adding that nations such as Niger, heavily reliant on resources income, were likely to facilitate operations.

In addition to Niger, Goviex has Mutanga in Zambia, which is expected to come onstream in 2023 and Falea in Mali which is due about three years after that, provided uranium prices are strong enough. (Reporting by Barbara Lewis; editing by Jason Neely)

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