Paraguay’s President Santiago Peña faced continuing impeachment proceedings Friday after submitting his resignation amid a banking crisis, weeks after Uranium Energy (NYSE-A: UEC) announced plans to invest $12 million (C$17 million) in the country’s uranium sector.
Peña offered to resign Thursday following the collapse of Ueno Bank, with which he had business ties. Congress had not accepted his resignation, leaving him formally in office as the Senate considered his removal.
The turmoil follows an October visit by U.S. Deputy Secretary of State Christopher Landau that brought investment announcements and plans for closer nuclear cooperation. UEC’s proposed spending would develop one of its Paraguayan uranium concessions, according to a government account of the visit.
The developments put Paraguay’s political crisis alongside an effort to attract American capital into its small mining sector. The country has identified uranium and titanium resources, but turning those deposits into operating mines will require further investment and development work.
Uranium Energy shares traded 4.6% stronger at $6.78 Friday morning in New York after falling nearly 10% the day before. The company’s market capitalization is about $3.4 billion. The stock has traded between $6.12 and $20.34 over the past year.
US minerals push
Paraguay and the United States signed a critical minerals memorandum of understanding earlier this year, followed by a separate nuclear cooperation memorandum on Aug. 4.
During Landau’s October visit, the countries announced negotiations on a so-called Section 123 agreement. Once in force, that agreement would establish the legal framework for major U.S. civilian nuclear equipment and material exports to Paraguay.
UEC’s Paraguayan portfolio includes the Yuty and Oviedo uranium projects and the wholly owned Alto Paraná titanium project, about 100 km north of Ciudad del Este.
Alto Paraná has indicated resources of 70 million tonnes grading 7.6% titanium dioxide and inferred resources of 3.58 billion tonnes grading 7.31% titanium dioxide, according to the company’s technical disclosures.
A November 2023 initial assessment, prepared under US S-K 1300 disclosure standards, estimated a base-case after-tax net present value of $419 million at an 8% discount rate and an internal rate of return of 21%.
The base case contemplated annual production of about 150,000 tonnes of high-titanium slag and 100,000 tonnes of high-purity pig iron. The preliminary assessment incorporates indicated and inferred resources; it does not establish mineral reserves.
Investment hurdles
Paraguay’s mining industry was seeking regulatory changes before the banking crisis.
In an Oct. 23 Global Americans interview, Víctor Fernández, president of the Paraguayan Chamber of Mining and UEC’s Paraguay country head, called for simpler permitting and greater legal certainty for investors.
Fernández said a new mining code was being drafted. The chamber advocates longer exploration periods, operating rights aligned with mine lives and royalties based on profits.
He also identified gaps in geological information, saying only about 4% of Paraguay had been mapped at a scale of 1:100,000. Better mapping and an effective geological survey would help companies assess exploration opportunities, he said.
UEC identifies access to hydroelectric power and river transport through neighbouring countries as advantages for its Paraguayan assets. Whether the political turmoil changes the company’s development plans remains a question requiring a direct company response.
Source: www.northernminer.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
