Stock Snapshot: GoviEx Uranium
GoviEx Uranium, a uranium explorer which Energy & Gold has covered since last summer, has risen ~300% from its early December low to its late January peak:
Since peaking at C$.34 in late January GXU has pulled back along with the uranium sector, forming a bullish falling wedge pattern on light volume – support near C$.22-C$.24 is key while a rally above C$.27 would target at least a retest of the C$.34 high.
We connected with GoviEx CEO Daniel Major via email and asked him a few questions:
Energy & Gold: What can you tell us about the uranium sector in the last couple of months? Have you noticed anything different since we have seen the stocks take off in December?
Daniel Major: I think the key thing about this rally is that it has been backed by a number of key changes. We all recognize that the long term supply demand gap will become a major issue unless there is an upward movement in the uranium price, as projects cannot get developed to fill the gap. The sector was struggling with short term issues – and the recent announcements have helped to alleviate those – the key change obviously being the Kazakh production cut reducing the supply of spot material. In addition, production from Cameco, Paladin and ERA are also lower. ConverDyn announced a large capacity cut which should reduce the amount of under feed material coming to the market, and Trump statements seem to be positive for nuclear energy.
Energy & Gold: Any updates on Madaouela and what news can investors expect from GoviEx over the coming months?
Daniel Major: Our focus will be on optimizing Madaouela – starting drilling of Miriam expansion – to make the first 10-12 years of production Open Pit only – thus simplifying the proposal to the financing community and off takers. We are also looking to get a grip on economics studies at Mutanga (GoviEx’s Zambian uranium project).
Energy & Gold: What is your take on the Cameco/Tepco news (long term contract dispute)?
Daniel Major: For the industry i do not see this being an issue – it is mainly a Cameco problem – on the whole though it does lock up material which Tepco can not put back to the market.
We look forward to watching GoviEx’s progress at its African uranium projects in 2017 as GXU rapidly closes in on becoming the next major global uranium producer.
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