GoviEx Uranium Inc. ("GoviEx" or the "Company") is pleased to announce that it has appointed Medea Capital Partners Ltd. ("Medea") as a Project Debt Advisor to assist the Company in the process of structuring the debt portion of the project financing required for the development of the Company's Madaouela Uranium Project in Niger ("the Madaouela Project").
Medea was previously engaged by GoviEx in February 2016, to undertake a survey of global debt markets to determine the potential availability of project financing for construction of the Madaouela Project. This resulted in Medea providing GoviEx with a strategic advisory paper which concluded that there may be available market capacity for Export Credit Agency ("ECA") covered debt project financing for the development of the project.
Daniel Major, Chief Executive Officer of GoviEx, commented, "We look forward to continuing to work with the Medea Capital team on the structuring of the potential debt financing for the development of the Madaouela Project. We are excited about the possibility of working with various ECAs who have a mandate to provide insurance coverage on debt related to projects in developing nations - including Niger."
The engagement of Medea represents one part of an integrated four-part strategy developed by the Company to advance the project, as follows:
- Debt finance structuring
- Project optimization and completion of detailed engineering
- Off-take structuring
- Project equity financing
The involvement of ECAs is expected to be a key aspect of achieving full funding, as ECAs can provide credit insurance, which significantly reduces the risk profile of project debt, to the syndicate of mining finance banks who ultimately finance the development of the project. ECAs are public agencies that provide sovereign-backed loans, guarantees and insurance to companies seeking to do business in developing countries.
ECAs currently finance or underwrite about US$430 billion of business activity in emerging markets, of which about US$55 billion is deployed in direct project finance in developing countries and US$14 billion is deployed in credit insurance policies for new foreign direct investment. This collective financing by ECAs is greater than other individual development finance institutions, such as the World Bank Group, and the Regional Development Banks.
In the case of the Madaouela Project, ECA policies are expected to provide mining finance banks with insurance coverage for both political risk and also the commercial risk of providing the project debt financing to construct the project.
Medea is an independent advisory firm based in London that provides advice on raising and structuring debt financing for mining companies. The Medea team takes a comprehensive approach to ensure successful financing of mining projects for junior mining companies and has a particular specialization in uranium financing, with key team members having experience structuring the project financing of the only hard-rock uranium projects to go into full production globally in the past 20 years.