Global Atomic Announces 2021 Results Dasa Uranium Mine Currently Under Development, Project On Schedule - Stronger Uranium and Zinc Prices Improve Outlook
NEWS RELEASE
Global Atomic Announces 2021 Results
Dasa Uranium Mine Currently Under Development, Project On Schedule
-
Stronger Uranium and Zinc Prices Improve Outlook
Toronto, ON, March 29, 2022: Global Atomic Corporation (“Global Atomic” or the “Company”),
(TSX: GLO, OTCQX: GLATF, FRANKFURT: G12) announced today its operating and financial
results for the year ended December 31, 2021.
HIGHLIGHTS
Dasa Uranium Project
➢ The Company issued its Dasa Project, Phase 1, Feasibility Study (“Feasibility Study”),
based on multiple trade-off studies and pilot plant campaigns.
➢ The Feasibility Study reported a maiden reserve for the Dasa Project of 4.1 million tonnes
grading 5,267 ppm for a total of 47.2 million pounds U3O8.
➢ The Feasibility Study resulted in an initial, Phase 1, 12-year mine schedule at a production
throughput of 1,000 tonnes per day to produce 45.4 million pounds U3O8.
➢ The Study estimates cash costs, including royalties and all Niger off -site costs, of
US$18.91/lb U3O8 and an all-in sustaining cost of US$21.93/lb U3O8.
➢ Initial capital expenditures are estimated to be US$208 million.
➢ Based on a U3O8 price of US$35/lb, the after-tax NPV discounted at 8%, is US$157 million
for an after -tax IRR of 22.7%. The Feasibility Study sensitivity analysis shows that at a
U3O8 price of US$50/lb the after -tax IRR rises to 44.6% and at US$60 the after -tax IRR
would be 57.2% for Phase 1 only.
➢ In Q4 2021, the Company began an infill drill program to upgrade Inferred Resources on
strike of the Phase 1 Flank Zone to Indicated Resources in order to begin incorporation of
additional Phase 2 resources into an updated mine plan.
➢ With the mining permit, final Feasibility Study results and Board approval, the Compan y
determined that effective December 30, 2021, the technical feasibility and commercial
viability of the Dasa Project were sufficient to support its development decision.
➢ The development decision resulted in a transfer of $45.2 million previously capitaliz ed
expenditures from “exploration and evaluation assets” to “mineral property assets” on the
Company’s balance sheet.
➢ The Company engaged HCF International Advisers Limited as its financial advisors for
project financing and, by the end of 2021, a short list of interested project lenders had
been identified.
➢ The Company engaged Fuel Link Limited as its uranium marketing agent and yellowcake
offtake discussions have been initiated with utilities.
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➢ The Company began a drill program in Q4 2021 at the Isakanan deposit on the Adrar
Emoles 4 permit to recover core for in-situ leach testing.
Turkish Zinc Joint Venture
➢ The Turkish Zinc Joint Venture (“BST” or the “Turkish JV”) plant processed over 70,000
tonnes EAFD in 2021.
➢ The Company’s share of the Turkish JV EBITDA was $11.3 million in 2021 ($5.6 million
in 2020), an increase of 102%.
➢ The zinc contained in concentrate shipments in 2021 was 34.8 million pounds and the
average realized price was US$1.36/lb.
➢ Available funds were used to secure adequate supplies of critical materials in case of
unforeseen supply disruptions and the planned final payment on the Befesa loan was
deferred to Q2 2022.
➢ The non-recourse Turkish JV debt owing to Befesa was US$4.65 million at the end of
2021 (Global Atomic share – US$2.28 million).
➢ The revolving credit facility of the Turkish JV had been paid down to US$7.8 million at the
end of 2021 from US8.2 million.
➢ The cash balance of the Turkish JV was US$2.8 million at the end of 2021.
Corporate
➢ Global Atomic continues to receive approximately $1 million in management fees and
sales commissions annually from the Turkish JV, helping to offset corporate overhead
costs.
➢ The Company completed a Bought Deal private placement of 6,250,000 Units on March
16th at a price of $2.00 per Unit for gross proceeds of $12,500,000. Each Unit comprised
one common share and one-half warrant exercisable at $3.00 per common share over an
18-month period.
➢ The Company completed a Bought Deal private placement of 8,750,000 Units on
December 7th at a price of $4.00 per Unit for gross proceeds of $35,000,000. Each Unit
comprised one common share and one -half warrant exe rcisable at $6.00 per common
share over an 18-month period.
➢ In May, the Company announced the appointment of Mr. Dean R. Chambers P.Eng.,
ICD.D to the Board of Directors and Pierre Hardouin MBA, CPA, CMA joined the Company
in September as Vice President Finance.
➢ Cash balance at December 31, 2021, was $34.2 million.
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SUBSEQUENT EVENTS
Corporate
➢ 140,000 warrants outstanding at December 31, 2021 were exercised for proceeds of
$420,000.
➢ In the year to date period Global Atomic granted 1,082,000 options to directors, officers
and employees of the Company Stock options are exercisable at $3.40 to $4.54 for a
period of five years.
Stephen G. Roman, President and CEO commented, “Global Atomic had a very productive year
in 2021. The major milestone met during the year was the completion of our Phase 1 Feasibility
Study for the Dasa Project, where using a base uranium price of US$35 per pound we determined
Phase 1 is able to generate an after-tax 22.7% IRR over a 12-year period.
Uranium is continuing to move higher and is currently trading near US$60 per pound, a price that
generates a 57.2% IRR, after tax! It is important for investors to remember the Phase 1 mine
plan represents approximately 20% of the known deposit. The Dasa Deposit is the largest, high-
grade uranium deposit under development in Africa, and remains open along strike and down dip
for further exploration and expansion.”
“The outlook for the Company continues to improve. Higher zinc prices during 202 1 helped
double EBITDA from our Turkish Zinc JV over the prior year and zinc prices continue to rise in
2022. At the Dasa Project site we continue to make excellent progress with the excavation of
the Boxcut and building surface infrastructure in prepara tion for mining. The Dasa drilling
program initiated in the fall of 2021 has shown excellent results and by converting Inferred
Resources to the Measured and Indicated categories we expect to increase contiguous Phase 1
mine plan Mineral Reserves and improve Project economics. Demand for uranium is increasing
as nuclear power is now recognized as a key contributor of baseload, green power solution that
will assist in meeting net zero carbon targets. The Dasa Project remains on schedule to produce
Yellowcake at the beginning of 2025, and make a meaningful contribution to world uranium
supply.”
OUTLOOK
Dasa Uranium Project
➢ The Company expects to finalize the incorporation of its Niger mining company in Q2
2022.
➢ The Company began the boxcut excavation in February and expects this to be complete
in April.
➢ Surface infrastructure to support mine development activities is under construction.
➢ Based on an updated mine plan and budget schedule, timing of mining will coincide with
mill completion in Q4, 2024. Ore stockpiling will be kept to a minimum by matching the ore
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development schedule with the mill completion, unless an agreement to transport
development ore to Orano Mining is reached.
➢ Mining equipment has begun to arrive on site and at the Por t of Cotonou in Benin.
Assembly and commissioning will occur over the summer months and CMAC -Thyssen
(CMAC) will begin training programs in Q3, 2022.
➢ The Company has engaged engineering consultants to complete Value Engineering
studies for the mill construction, due by the end of March.
➢ An EPCM (Engineering, Procurement, and Construction Management) contract is
expected to be awarded in Q2 2022.
➢ Detailed engineering will be initiated immediately following the EPCM contract award to
support the start of the processing plant construction in Q1 2023.
➢ Project financing is expected by the end of the year to support construction of the
processing plant.
➢ The Dasa drilling program has been successful in both indicating an expansion of the
resources and upgrading Inferred Resources to Indicated Resources.
➢ On completion of the Dasa drill program currently scheduled for June, and the receipt of
assays, the current Mineral Resource Estimate (“MRE”) will be updated.
➢ Following the MRE update, a revised mine plan will be d eveloped and the reserve
statement updated; it is expected that this will result in an increase in Phase 1 ore reserves
and lower operating costs.
➢ The Company is continuing discussions with Orano Mining relating to direct shipping of
development ore to the Somair Mine located 105 kilometers north of the Dasa Project.
➢ The Isakanan drill program was completed in February and core samples have been
shipped to Canada to test for in-situ leach potential.
Turkish Zinc Joint Venture
➢ The Turkish zinc plant continues to operate at target operating efficiencies.
➢ Various factors have influenced the zinc price in the current year, which has traded above
US$1.60 per pound throughout the year-to-date period.
➢ Repayment of the remaining Befesa loan is expected to occur in Q2 2022.
➢ Turkish JV dividend payments will resume following repayment of the Befesa loan.
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COMPARATIVE RESULTS
The following table summarizes comparative results of operations of the Company:
The consolidated financial statements reflect the equity method of accounting for Global Atomic’s
interest in the Turkish JV. The Company’s share of net earnings and net assets are disclosed in
the notes to the financial statements.
Revenues include management fees and sales commissions received from the joint venture.
These are based on joint venture revenues generated and zinc concentrate tonnes sold.
Revenues in 2021 have increased with the increased zinc prices and higher sales in the Turkish
Zinc JV.
(all amounts in C$) 2021 2020
Revenues 957,723$ 707,552$
General and administration 9,156,217 3,397,564
Share of equity loss (earnings) (4,112,819) 1,012,580
Other income (68,001) 16,787
Finance expense 19,882 4,371
Foreign exchange loss (gain) 108,197 (86,044)
Net income (loss) (4,145,753)$ (3,637,706)$
Other comprehensive income (loss) (9,086,937)$ (1,490,473)$
Comprehensive income (loss) (13,232,690)$ (5,128,179)$
Basic and diluted net loss per share ($0.026) ($0.024)
Basic and diluted weighted-average
number of shares outstanding 162,371,970 149,403,862
2021 2020
Cash 34,179,449$ 2,448,235$
Property, plant and equipment 46,175,097 72,721
Exploration & evaluation assets 681,989 37,812,477
Investment in joint venture 8,981,986 11,497,351
Other assets 3,581,512 1,210,303
Total assets 93,600,033$ 53,041,087$
Total liabilities 2,895,756$ 1,231,149$
Shareholders' equity 90,704,277$ 51,809,938$
Year ended December 31,
As at December 31,
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General and administration costs at the corporate level include general office and management
expenses, stock option awards, costs related to maintaining a public listing, professional fees,
audit, legal, accounting, tax and consultants’ costs, insurance, travel and other miscellaneous
office expenses. Stock option ex penses, professional fees and salaries have increased in 2021
compared with 2020 due to growth required to support Dasa development.
Share of net earnings from joint venture represents Global Atomic’s equity share of net
earnings from the Turkish Zinc JV. The significant growth in 2021 EBITDA of the Turkish Zinc JV
has resulted in positive equity income compared to a loss in 2020.
Uranium Business
Following completion of the Preliminary Economic Assessment of the Dasa Project in May 2020,
the Company initiated various trade-off studies which were followed up by a Feasibility Study. The
Feasibility Study was reported with an effective date of November 15, 2021 and the full Feasibility
Study was filed on SEDAR on December 30, 2021.
The Feasibility Study was completed at a detailed level of design and engineering to enable an
appropriate level of confidence to be applied to the economic viability and outcomes of the project.
As a result of the Feasibility Study, the following Mineral Reserves were estimated.
Mineral Reserve Category
RoM
(tonnes)
U308
(ppm)
U308
(t)
U308
(Million lbs)
Proven Mineral Reserve - - -
Probable Mineral Reserve 4,066,390 5,267 21,417 47.217
The mining inventory included in the Feasibility Study included a minor amount of Inferred
Resources. In Q4 2021, the Company began an infill drilling program to convert the Inferred
Resources to Indicated Resources. To date, this drilling program has been very successful and
has identified additional resources in these areas as well. The drilling campaign will likely be
completed at the end of Q2 2022. Once the assays have been received, the MRE will be updated
to reflect both the additional resources and changes in resource categorization.
The expectation is that there will be a significant conversion of Inferred to Indicated Resources.
Once the MRE has been updated, the Company will also update its mine plan. The updated mine
plan will also result in an update to the reserve estimate, and is expected to be completed before
year end.
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Phase 1 Feasibility Study Results
The Phase 1 Feasibility Study on the Dasa deposit was completed using a uranium price of
US$35/pound U3O8. Key economic and production statistics are as follows:
Summary Project Metrics @ US$35/lb U3O8
Project Economics (USD)
After-tax NPV (8% discount rate) US$M $157
After-tax IRR % 22.7%
Undiscounted after-tax cash flow (net of capex) US$M $677
After-tax payback period Years 3
Unit Operating Costs
LOM average cash cost(1) $/lb U3O8 $18.91
AISC(2) $/lb U3O8 $21.93
Production Profile
Mine Life Years 12
Total tonnes of mineralized material processed M Tonnes 4.25
Mill processing rate Tonnes/day 1,000
Mill Head Grade ppm 5,184
Overall Mill Recovery (2) % 93.4%
Total Lbs U3O8 processed Mlbs 48.6
Total Lbs U3O8 recovered Mlbs 45.4
Average annual Lbs U3O8 production (3) Mlbs 3.5
Peak annual Lbs U3O8 production Mlbs 6.0
(1) Cash costs include all mining, processing, site G&A, and royalty costs, as well as Niamey head office and other off -site costs.
All-in sustain costs (“AISC”) include cash costs plus capital expenditures forecast after the start of commercial production.
(2) Ramp up of the mill is assumed to take 12 months, during which recoveries increase. Once stable production levels have been
achieved at the end of this 12 months, the recovery rate stabilizes at 94.15%.
(3) Annual production averages 4.8 million lbs/annum during the first 7 years when the high grade Zone 1 is being mined.
The economic analysis for the Study was done via a discounted cash flow (“DCF”) model based
on the mining inventory from the Feasibility S tudy Phase 1 mine plan and a price of US$35 per
pound of U 3O8. Sensitivity analysis was carried out at price intervals from US$35 per pound to
US$60 per pound, as shown in the table below. The DCF includes an assessment of the current
tax regime and royalt y requirements in Niger. Net present value (“NPV”) figures are calculated
using a range of discount rates as shown. The discount rate used for the base -case analysis is
8% (“NPV8”).
Economic sensitivity with varying uranium prices (USD)
Uranium price (per pound) $35/lb $40/lb $50/lb $60/lb
Before-tax NPV @ 8% $187 M $309 M $556 M $804 M
After-tax NPV @ 8% $157 M $259 M $468 M $676 M
After-tax IRR 22.7% 30.6% 44.6% 57.2%
The plant is designed with a capacity of 1,000 tonnes per day (t/d) or 365,000 tonnes per annum
(t/a). The plant layout has been optimised to enable the addition of more processing lines in the
future.
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The Company is in the process of incorporating a Niger mining company to develop and mine the
Dasa deposit. The company’s name has been agreed with the Niger Mines Minister to be Société
Minière de Dasa S.A. avec CA (“SOMIDA”). Discussions are on-going about other aspects of the
incorporation of SOMIDA. On August 19, 2021, the Mines Minister issued a formal letter to the
Company indicating that it would only be participating in the equity of SOMIDA for the 10% free
carried interest. Notwithstanding, the Min es Minister could change this position up until the
incorporation of SOMIDA.
The Company has entered into an agreement with CMAC -Thyssen International Inc. (“CMAC”),
a contract miner based in Val d’Or, Quebec to provide contract mining services in the development
of the Dasa underground mine over the first 24 months of mining. Foll owing the March 2020
closure of the Cominak underground uranium mine in Arlit, there is a pool of skilled miners
available to the Company in Niger. CMAC will be providing training, development and oversight
of the Niger workforce with the new equipment that will be used at site. Initial mining will comprise
only ramp development during the first 12 months, followed by access and level. Equipment and
mining consumables are being procured and shipped to site. In view of worldwide supply chain
disruptions, moving materials to site is taking longer than expected.
The boxcut has been blasted and all preparations should be complete in April. Surface
infrastructure is under construction and will continue to be installed throughout the summer. All
equipment and supplies should arrive at site by the end of the summer to be ready to start the
portal and ramp development thereafter. Although well -funded, the Company has decided to
conserve cash and will begin the underground mine development in Q4 2022 rather than in April
2022. Until an agreement to direct ship ore to Orano’s operation in Arlit is finalized, considerable
cash can be saved by not stockpiling development ore longer than necessary. This decision has
additional benefit of allowing time for more deliveries of equipment and consumables to arrive
prior to underground mine development.
Upon completion of the Feasibility Study, the Company has embarked on certain Value
Engineering studies to improve on the Feasibility Study processing plant design details. Su ch
studies will be completed by the end of March and an EPCM provider will be selected in Q2 2022.
Following the appointment of an EPCM provider, detailed engineering will get underway and
surface groundwork preparation will begin in Q4 of this year followed by remaining civils work and
construction beginning in 2023. The Company’s plan is to commission the processing plant in Q4
2024 so that yellowcake can be produced at the beginning of 2025.
In 2021, the Company engaged HCF International Advisers Limit ed (“HCF”) as its financial
advisor to secure project finance for the Dasa Project. HCF has succeeded in short -listing a
number of interested project lenders who are in the process of due diligence. It is expected that
term sheets can be agreed upon in Q2 2022 to be followed by final due diligence and
documentation. With this schedule, the project finance could be in place by Q4 2022 with
drawdowns to coincide with the start of processing plant construction in 2023.