January 9, 2018
2017: Year of Acquisition and Preparation
Dear Friends and Stakeholders of GoviEx Uranium Inc. (“GoviEx” or the “Company”),
As the holiday season comes to a close, we have taken time to reflect on the events that
affected GoviEx during 2017 and to share our vision for the future.
The nine year bear market which took spot down from approximately US$140/lb U3O8 in 2007
seems to have turned the corner and has slowly begun to turn upwards. After an initial surge,
gains in the spot uranium price remained relatively muted during 2017, trading between $20 and
$21/lb U3O8 for most of the year, as inventories and excess supply weighed heavily on the price.
However, the year ended with announcements of significant production cuts by major uranium
producers, with an approximately one-million-pound-U3O8-per-annum production cut at
AREVA’s Somair Project in Niger, followed by Cameco’s announcement to suspend production
at its McArthur River Mine, the world’s largest producing uranium mine, for at least 10 months
starting this month, which is expected to be a cut of approximately 15-18 million pounds
of U3O8 in 2018. Kazatomprom then followed up with another production cut of approximately
28.6 million pounds of U3O8 over the next three years, adding to the 10% cut it announced at
the end of 2016.
Nuclear reactor demand, which represents the primary end use for uranium, is forecast by the
World Nuclear Association to increase steadily to 2030 and beyond. There are estimated to be
60 reactors under construction and another 164 reactors planned to be constructed worldwide,
with China leading the movement. Japan also is restarting reactors and continues to target
nuclear energy as 20% of the nation’s total energy generation.
Along with forecast increased demand for uranium, the announced production cuts from the
major producers, as well as the uranium price being currently below the price required to
incentivize new production, the Ux Consulting Company has changed their uranium market
forecast from one of supply surplus to supply deficit in 2018.
GoviEx has one of the largest total, publicly-held, uranium Mineral Resources bases amongst its
peer group and two mine-permitted projects. GoviEx has been preparing for the forecasted
improvement in the condition of the uranium market by focusing on consolidating land positions
accretive to our existing mine-permitted projects and reviewing technology options with the
target of improving the economic potential of our projects in order to be in a better position to
advance our mine-permitted projects towards a potential production decision once uranium
Please read the complete press release at the following link: LINK