Global Atomic Announces 2022 Results Dasa Uranium Project On Schedule to Produce Yellowcake in Q1 2025
NEWS RELEASE
Global Atomic Announces 2022 Results
Dasa Uranium Project On Schedule to Produce Yellowcake in Q1 2025
Toronto, ON, March 31, 2023: 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, 2022.
HIGHLIGHTS
Dasa Uranium Project
On April 19, 2022, the foundation for the debt portion of the financing for the Dasa Project was laid
when the Company received a Letter of Interest from Export Development Canada (“EDC”),
confirming their interest in working with the Company in regard to the financing of the Dasa Uranium
Project in the Republic of Niger.
On June 15, 2022, the Company received a Letter of Intent from a major North American utility for
the procurement of Dasa’s uranium, representing the supply of 2.1 million pounds U3O8 over a six-
year period commencing in 2025, representing approximately 7 percent of Dasa’s production over
the period with a revenue potential of US$110 million in real terms.
On June 20, 2022, the Company received Letters of Intent from a banking syndicate to finance the
Dasa Uranium Project in Niger. The syndicate is comprised of North American financial institutions
and includes the previously announced indication from EDC.
On July 21, 2022, the Company announced that it had reached an agreement with Enernet Global
Inc. (“Enernet”), a leading hybrid independent power producer, to commence early engineering for
a hybrid power plant for the Dasa Project.
On August 11, 2022, Global Atomic announced the incorporation of the Company’s Niger mining
subsidiary, Société Minière DASA S.A. or “SOMIDA”, which is owned 80% by Global Atomic and
20% by the Government of Niger, including their 10% carried interest provided under the Niger
Mining Code.
On September 28, 2022, Global Atomic announced the signing of Development Consultants Private
Limited (“DCPL”) of Kolkata, India, and Lycopodium Minerals Canada Ltd. (“Lycopodium”) to
commence the basic and detailed engineering, procurement and project management of the Dasa
Mine processing plant in the Republic of Niger.
On October 5, 2022, the Company received Letter of Intent from a second major western utility for
the procurement of uranium from the Company’s Dasa Project, representing the supply of up to 2.4
million pounds U3O8 within a multi-year delivery window beginning in 2025, representing about 7%
of Dasa’s annual Phase 1 production over the period with a revenue potential valued at US$140
million in real terms.
On November 5, 2022, Global Atomic hosted over 800 people for the Opening Blast Ceremony at
the Dasa Mine which officially commenced the underground development of the Dasa Mine
On November 24, 2022, the fourth update of drill intercepts were reported from the infill drill program
initiated at the Dasa project in 2021, including a 1,000- meter extension to the program as well as
interim results of chemical assays completed to date, which indicated higher grades than reported
in the probe results from the original drill holes.
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Turkish Zinc Joint Venture
The Turkish Z inc Joint Venture (“BST” or the “Turkish JV”) plant processed over 76,000 tonnes
EAFD in 2022.
The Company’s share of the Turkish JV EBITDA was $4.2 million in 2022 ($11.3 million in 2021).
The zinc contained in concentrate shipments in 2022 was 35.2 mil lion pounds and the average
price was US$1.58/lb.
Available funds were used to secure adequate supplies of critical materials in case of unforeseen
supply disruptions.
The revolving credit facility of the Turkish JV was US$8.3 million at the end of 2022 (Global Atomic
share – US4.1 million)
The cash balance of the Turkish JV was US$3.1 million at the end of 2022.
Corporate
Global Atomic continues to receive approximately $1.2 million in management fees and sales
commissions annually from the Turkish JV, helping to offset corporate overhead costs.
Cash balance at December 31, 2022, was $8.4 million.
Subsequent events
The Company revised its Dasa Project, Phase 1, Feasibility Study (“Feasibility Study”), which was
revised primarily to apply “zero grade” to Inferred Resources included in certain stopes of the Phase
1 Mine Plan.
The Feasibility Study confirmed a 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 44.1 million pounds U3O8.
The Study estimates cash costs, including royalties and all Niger off -site costs, of US$19.02/lb
U3O8 and an all-in sustaining cost of US$22.13/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$147 million for an
after-tax IRR of 22.3%. The Feasibility Study sensitivity analysis shows that at a U 3O8 price of
US$50/lb the after -tax IRR rises to 44.4% and at US$60 the after -tax IRR would be 56. 9% for
Phase 1 only.
The Company completed a bought deal private placement of 18,666,667 Units on March 17, 2023,
at a price of $3.00 per Unit for gross proceeds of approximately $56,002,501. Each Unit comprised
one common share and one-half warrant exercisable at $4.00 per common share over an 18-month
period.
Global Atomic President and CEO, Stephen G. Roman commented, “In 2022, we made significant
strides in advancing the Dasa Project in Niger, most notably opening up the portal, building the
surface infrastructure and hiring a local experienced mining executive and workforce to begin
underground development of the mine. We are on schedule to produce yellowcake in 2025 and
are advancing the project on all fronts thanks to the confidence of investors w ho participated in
our recent equity raise. Bank financing is also progressing well with the terms approval process
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nearing completion and an announcement of final debt facility approval at the end of Q2, as
previously stated.”
“To address any other furt her funding needs we are currently discussing potential offtake
agreements with pre- payments from international electric utilities and we are evaluating other
funding proposals received as alternatives to equity. Meanwhile in the near term, for the Dasa
processing plant we expect to complete detailed engineering, order long- lead equipment and
begin earthworks in advance of construction. We also plan to issue a revised Mineral Resource
Estimate, which will lead to a revised mine plan and updated Phase 1 Feasibility Study for Dasa.”
OUTLOOK
Dasa Uranium Project
In Q2 2023, a banking syndicate is expected to approve the debt portion of the project financing to
complete the Dasa Project.
Additional uranium sales contracts with international electric utilities are expected to be signed once
the project financing package is completed.
In Q2 2023, the Company expects to complete a revised Mineral Resource Estimate (“MRE”) for
the Dasa Project based on the 16,000-meter drill program initiated at the end of 2021.
The Company plans to use the revised MRE to complete a revised mine plan for the Dasa Project,
followed by a revised Feasibility Study in Q4 2023
In Q2 2023, the Company expects to complete the basic engineering for the plant at the Dasa site,
place orders for long-lead items and begin site preparation.
The Company continues discussions with Orano Mining relating to the direct shipment of
development ore to their Somaïr processing facility located 150 kilometers north of Dasa.
Turkish Zinc Joint Venture
In early March 2023, the recycling plant resumed operation following a thorough inspection and
assessment of the facility after earthquake on February 6, 2023.
Continued supply interruptions for the availability of Electric Arc Furnace Dust (“EAFD”) are
expected until Turkish steel mills increase their productivity that has been hampered by the effects
of COVID during the past few years and more recently by the 2023 earthquake.
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COMPARATIVE RESULTS
The following table summarizes comparative results of operations of the Company:
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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.
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 expenses, professional fees and salaries have increased in 2022
compared with 2021 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.
Net gain (loss) attributable to Non- controlling interest represents 20% ownership of the
Republic of Niger in SOMIDA. $23 thousand loss is related to the exchange loss of SOMIDA
incurred during the period between the incorporation and the reporting date.
Uranium Business
Mineral Resources and Reserves
As noted on the overall Dasa resource schematic above, there are significant Inferred Resources
located above Zone 3 and between Zones 2 and 3. The Company completed a 15,000-meter drill
program at its Dasa Project that began in Q4 2021, w hich due to its success was expanded to
include another 1,000 meters. Drill results indicate that Zones 2, 2a and 2b now represent a
contiguous zone that joins up with Zone 3 and is estimated to be approximately three times larger
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than initially defined (see the longitudinal depiction below). Recent drilling has also targeted the
extension of Zone 4.
On the strength of results from the overall drill program, Global Atomic is updating the Dasa
Mineral Resource Estimate (“MRE”) and will in turn update it s Mine Plan which is expected to
result in larger and contiguous mining Zones, reduced underground development work between
the Zones, lower operating costs and an increase in mineable reserves.
The updated MRE is expected to be completed in Q2 2023. The Company plans to use the revised
MRE to complete a revised mine plan for the Dasa Project, followed by a revised Feasibility Study
in Q4 2023.
On January 9, 2023, the Company revised its Dasa Project, Phase 1, Feasibility Study
(“Feasibility Study”), which was revised primarily to apply “zero grade” to Inferred Resources
included in certain stopes of the Phase 1 Mine Plan.
The Zones vary in grades, with Zone 1 contributing the largest portion of the U3O8 tonnes:
Feasibility Study including
Inferred Resources
Revised Feasibility Study
with “zero grade” Inferred
Resources
Zone
In-situ
Tonnes U3O8 PPM
RoM
Tonnes
RoM U3O8
PPM
RoM U3O8
Tonnes
RoM U3O8
PPM
RoM U3O8
Tonnes
1
2,464,615 6,980
2,316,047
6,887
15,950
6,847
15,856
2
264,339 3,621
256,078
3,574
915
3,540
906
3
656,114 3,093
633,541
3,056
1,936
2,480
1,571
4
604,673 3,003
584,616
2,966
1,734 2,872
1,679
5
478,916 3,312
463,345
3,269
1,515
3,031
1,405
Total
4,468,657 5,279
4,253,626
5,184
22,050
5,035
21,417
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The inferred resources, representing 4.4% of total mineral resources to be mined in Phase I,
was treated as zero grade waste in the revised feasibility study. Impacts of this grade change
are summarized in the table below:
Original Feasibility
Study
Revised Feasibility
Study
Average mill feed grade (ppm) 5,184 5,267
Total production over 12-year Phase 1 mine plan (Mlb) 45.4 44.1
Average cash cost1 (US$/lb) 18.91 19.02
Average AISC (US$/lb) 21.93 22.13
Internal After-tax Rate of Return (“IRR”) @ $US35/lb 22.7% 22.3%
After-tax Net Present Value (“NPV8”) (US$ millions) @ $US35/lb 157 147
Internal Rate of Return (“IRR”) @ $US50/lb 44.6% 44.4%
After-tax Net Present Value (“NPV8”) (US$ millions) @ $US50/lb 468 456
Niger Mining Company
Under Niger’s Mining Code, a Niger mining company must be incorporated to carry out mining
activities. Société Minière de Dasa S.A. (“SOMIDA”) was incorporated on August 11, 2022. The
Republic of Niger received its 10% free carried interest in the shares o f SOMIDA and elected to
subscribe for an additional 10%, resulting in a total ownership of 20% of the shares. Under the
terms of the Company’s Mining Agreement, the Republic of Niger commits to fund its
proportionate share of capital costs and operating deficits for the additional 10% interest. The
Republic of Niger has no further option to increase its ownership.
Dasa Mine Development and Construction
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 is 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 development.
Equipment and mining consumables have been procured and shipped to site.
The Box-Cut has been completed and the Fi rst Blast of the portal took place on November 5,
2022, marking the start of the underground development. Surface infrastructure to support CMAC
has been completed. At the Dasa Mine, operations are proceeding on schedule with over 200
meters of underground development now completed on the decline ramp plus for re-muck and
safety bays.
The Company engaged DCPL and Lycopodium to commence the EPCM process to build Dasa’s
ore processing plant. DCPL is focusing on the Basic and Detailed Engineering required for the
final design of the Dasa Process Plant. Lycopodium is providing project management,
procurement, project controls and a project execution plan services. Lycopodium’s engagement
may be extended to include construction management in view of their extensive West African
experience.
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Project Financing
Global Atomic has received a Letter of Interest (“LOI”) from Export Development Canada (“EDC”)
confirming their interest in working with the Company on a project financing of the Dasa Project.
EDC expects to partner with other export credit agencies, commercial banks and/or financial
institutions as co-lenders and to have a lead role in the structuring of the debt facility. EDC has
indicated a potential participation, at typical bank rates for a greenfield mining project finance, of
up to US$75 million to form the cornerstone of what is expected to be a syndicate of banks. On
June 15, 2022, Global Atomic also received additional Letters of Intent such that a syndicate has
been formed to finance the Dasa Project. The syndicate is comprised of North American financial
institutions, including EDC.
The names of all members of the syndicate will be announced following credit committee and
board approvals by the financial institutions involved. The Company expects to enter into term
sheets with the syndicate shortly and to receive final approvals in Q2 2023.
Turkish Zinc JV EAFD Operations
The Company’s Turkish EAFD business operates through a joint venture with Befesa Zinc S.A.U.
(“Befesa”), an industry leading Spanish company that operates a number of Waelz kilns
throughout Europe, North America and Asia. On October 27, 2010, Global Atomic and Befesa
established joint venture, known as Befesa Silvermet Turkey, S.L. (“BST” or the “Turkish JV”) to
operate an existing plant and develop the EAFD recycling business in Türkiye. BST is held 51%
by Befesa and 49% by Global Atomic. A Shareholders Agreement governs the relationship
between the parties. Under the terms of the Shareholders Agreement, management fees and
sales commissions are distributed pro rata to Befesa and Global Atomic. Net income earned each
year in Türkiye, less funds needed to fund operations, must be distributed to the partners annually,
following the BST annual meeting, which is usually held in t he second quarter of the following
year.
BST owns and operates an EAFD processing plant in Iskenderun, Türkiye. The plant processes
EAFD containing 25% to 30% zinc that is obtained from electric arc steel mills, and produces a
zinc concentrate grading 65% to 68% zinc that is then sold to zinc smelters.
Global Atomic holds a 49% interest in the Turkish JV and, as such, the investment is accounted
for using the equity basis of accounting. Under this basis of accounting, the Company’s share of
the BST’s earnings is shown as a single line in its Consolidated Statements of Income (Loss).