Global Atomic Announces Positive Economics FOR Dasa
PRESS RELEASE
GLOBAL ATOMIC ANNOUNCES POSITIVE ECONOMICS FOR DASA
Toronto, ON, April 15, 2020: Global Atomic C orporation (“Global Atomic” or the “Company”), (TSX: GLO ,
OTCQX: GLATF; FRANKFURT: G12 ) the multi-asset development company with cash flow from the BST zinc
recycling facility in Turkey and one of the world’s premi er uranium development assets, at the Dasa Project, in
the Republic of Niger, West Africa, is pleased to announce the results of an optimized mine plan as the basis for
a new Preliminary Economic Assessment (“Study” or “PEA”), outlined in this press release.
Global Atomic’s new PEA comprises an optimized Phase 1 of a larger mine development at the Dasa Project. The
Phase 1 plan is a low Capex development targeting profitable production over a twelve year mine life. During
Phase 1 implementation, Global Atomic will aim to upgrade the substantial mineral resources outside of the
Phase 1 mine plan to feed the larger Dasa Project future mine plan (see Figure 1 below).
The results of the Study will be summarized in a technical report prepared pursuant to Canadian Securities
Administrators’ National Instrument 43 -101, which will be available on the Company’s website
(www.globalatomiccorp.com) and filed on SEDAR within 45 days of today’s date.
HIGHLIGHTS: Optimized Phase 1 Project (All figures are in US dollars)
After-tax NPV8 of $211 million and after-tax IRR of 26.6%
Cash cost of $16.72 per pound1
All-in sustaining cost (“AISC”) of $18.39 per pound2
Average annual steady-state uranium production of 4.4 million pounds U3O8
Initial capital costs of $203 million, including 20% contingency
Phase 1 Project mine life of 12 years, mining 48 million pounds U3O8 @ 5,396ppm
GLOBAL ATOMIC CHAIRMAN, PRESIDENT & CEO, STEPHEN G. ROMAN COMMENTED:
“The Study demonstrates that the Dasa Project can be a significant new supplier of uranium in the form of
yellowcake even in this low uranium price environment. Over the optimized Phase 1 mine plan, using a base case
uranium price of $35 per pound, the operation generates an after tax NPV8 of $211 million and an IRR of 26.6%,
at an all -in sustaining cost of $ 18.39 per pound. This ranks our project in the lowest quartile of the global cost
curve. If we apply a long-term uranium price of $50 per pound, the Project IRR increases to 46.3% and the NPV 8
to $485 million.
Our development plan is a low capex route into production that uses conventional underground mining and a
processing technology similar to that used by the two existing uranium mines in Niger. This mine plan also
provides future access to the contained uranium inventory of over 200 million pounds in the mine’s deeper
horizons. The optimized Phase 1 mine plan initially targets high grade mineralization that starts from a depth of
70 meters below surface that, together with a mining friendly jurisdiction, positions the Company as being the
next entrant to the worldwide uranium supply chain.
Despite current low spot prices, future uranium market fundamentals are encouraging, driven by robust demand
for nuclear power generation and the pressing need for scalable low-carbon energy sources. Primary mine-supply
of uranium continues to dwindle and secondary sources of uranium are tightening . A lack of new projects
1 Cash cost per pound represents mining, processing and site general and administrative costs, royalty and offsite costs, divided by payable uranium of
44.1 million pounds U3O8.
2 All-in sustaining cost per pound of uranium represents mining, processing and site general and administrative costs, royalty, offsite costs and
sustaining capital expenditures, divided by payable uranium of 44.1 million pounds U3O8.
scheduled to come online below a $50 per pound incentive price, means this is an opportune time to advance the
development of the Dasa Project.
The next milestone for the Dasa Project is producing a Final Technical Report (“FTR”) to incorporate additional
work currently underway, including hydrogeological and environmental impact assessment studies. The FTR is
the key mining permit application document tha t will be submitted to the Government of Niger later this year.
Once the mine permit is issued, Global Atomic will be in a position to finalise the engineering needed to construct
the project.”
PEA Overview
The updated 2019 Mineral Resource Estimate (“ MRE”), is used as the basis for the Study. 3 This Study
investigates underground mining of an area of high grade mineralization, known as the Flank Zone. Additional
high-grade mineralisation in stratabound lenses is also considered in the mine plan. Based on t his investigation,
a stand -alone, underground mining scenario was assessed as the best option. The PEA indicates the Phase 1
mine could operate for twelve years, including the ramp up, and at steady state mining , is planned to produce
over four million pounds of U3O8 annually.
The objective of the Study was to assess the potential economic and technical viability of uranium production at
the Dasa Project as an integrated operating facility to mine and produce yellowcake on the property. Summary
project metrics are shown in Table 1 below:
Table 1. Summary Project Metrics @ US$35/lb U3O8
Project Economics
Average Royalty rate (based on Mining Code sliding scale) % 9.1%
Average annual mine EBITDA(1) $M $93.8
After-tax NPV (8% discount rate) $M $211
After-tax IRR % 26.6%
Undiscounted after-tax cash flow (net of capex) $M $437
After-tax payback period Years 4.00
Unit Operating Costs
LOM average cash cost $/lb U3O8 $16.72
AISC $/lb U3O8 $18.39
Production Profile
Mine Life Years 12
Total tonnes of mineralized material processed M Tonnes 4.0
Peak tonnes per day mineralized material Tonnes/day 1,124
Mill Head Grade ppm/t 5,396
Overall Mill Recovery % 92%
Total Lbs U3O8 processed Mlbs 47.9
Total Lbs U3O8 recovered Mlbs 44.1
Average annual Lbs U3O8 production Mlbs 4.4
Peak annual Lbs U3O8 production Mlbs 5.2
(1) Mine EBITDA is a non -IFRS measure, does not have a standardized meaning prescribed by IFRS and may not be
comparable to similar terms and measures presented by other issuers. Mine EBITDA comprises earnings before income
taxes, interest expense (income) and f inancing expense (income), amortization expense, and other expenses including
corporate costs.
3 See news release dated July 18, 2019 and titled “GLOBAL ATOMIC ANNOUNCES SIGNIFICANT RESOURCE UPGRADE AT DASA PROJECT” filed on
SEDAR at www.sedar.com and available on the Company website at www.globalatomiccorp.com
Economics
The economic analysis for the PEA was done via a discounted cash flow ( “DCF”) model based on the mining
inventory from the PEA optimized Phase 1 mine p lan and a price of US$35 per pound of eU 3O8. Sensitivity
analysis was carried out at $5 per pound price intervals from $25 per pound to $50 per pound, as shown in Table
2. The DCF includes an assessment of the current tax regime and royalty requirements in Niger. Net present
value (“NPV”) figures are calculated using a range of discount rates as shown in Table 3. The discount rate used
for the base-case analysis is 8% (“NPV8”). Cash flows are discounted to the start of first construction.
Table 2. Economic sensitivity with varying uranium prices(1)
Uranium price (per pound) $25/lb $30/lb $35/lb $40/lb $45/lb $50/lb
Before-tax NPV @ 8% $41 M $139 M $260 M $365 M $485 M $601 M
After-tax NPV @ 8% $34 M $113 M $211 M $294 M $391 M $485 M
After-tax IRR 11.5% 18.5% 26.6% 32.6% 39.7% 46.3%
(1) Mine Stope Optimisation (“MSO”) and schedule for all uranium price sensitivities used the MSO base case model at $35
per pound uranium
Table 3. Economic sensitivity with varying discount rates using base-case uranium price $35/lb
Discount rate (%) 5% 8% 10% 12%
Before-tax NPV $341 M $260 M $215 M $177 M
After-tax NPV $279 M $211 M $173 M $141 M
Mining and Resources
The Study proposes the development of an underground mine using a sublevel blast-hole retreat with cemented
paste backfill as a mining method on a 20 meter sublevel spacing.
The Phase 1 mine plan considered only the stope shapes above cut -off grade (“COG”). To gener ate the stope
shape the MSO mine design tool has been used applying 2,300 parts per million (“ppm”) U3O8 COG. Within the
optimized Phase 1 mine plan considered in the Study, only high grade mineralized material down to a maximum
depth of 594 meters below surface has been included. All stopes with grades below the average COG have been
eliminated from the actual evaluation , although within individual stopes there does exist some lower grade
material as shown in Table 4 below.
Table 4. Mining Parameters LOM Total Grade U3O8 Contained U3O8
Units M tonnes ppm M lbs
High Grade Mineralized Material 1.25 11,305 31.1
Medium Grade Mineralized Material 0.98 3,777 8.2
Low Grade Mineralized Material 1.29 2,538 7.2
Lowest Grade Mineralized Material 0.61 1,114 1.5
Total Mined Material 4.13 5,274 48.0
Closing Stockpile -0.10 475 -0.1
Total Processed Mineralized Material 4.03 5,396 47.9
Waste material 0.99 -
Highlights from the July 18, 2019 MRE included a grade-tonnage report at varying cut-off grades across all of the
resource are summarized in the following table.
Table 5. Grade-Tonnage report, highlights from July 18, 2019 MRE
Cut-Off Category Tonnes eU3O8 Contained metal
eU3O8, ppm Mt ppm Mlb
100 Indicated 81.6 718 129.1
Inferred 96.1 606 128.4
300 Indicated 34.4 1,446 109.6
Inferred 37.6 1,260 104.6
1,000 Indicated 9.6 3,885 82.1
Inferred 10.2 3,308 74.2
2,000 Indicated 4.6 6,624 66.8
Inferred 4.5 5,713 56.8
2,500 Indicated 3.6 7,849 61.9
Inferred 3.4 6,838 51.4
5,000 Indicated 1.6 13,186 46.8
Inferred 1.6 10,805 37.2
10,000 Indicated 0.6 24,401 31.1
Inferred 0.8 14,598 25.3
15,000 Indicated 0.3 34,236 24.3
Inferred 0.1 21,493 4.0
Processing
The Project will use conventional uranium processing techniques, comprised of dry SAG grinding and
classification; pug -leaching and curing; uranium extraction circuit (re -pulping and sol id liquid separation);
uranium purification and precipitation circuit; drying and pack aging; and a paste plant for mine backfill . Based
on considerable metallurgical testwork, a recovery of 92% is estimated over the life of the Project , which is
planned to produce 44.1 million pounds of U3O8 as yellowcake during optimized Phase 1 operations.
The plant is designed with a capacity of 1,000 tonnes per day (t/d) or 365,000 tonnes per annum (t/a) using a
modularised design. Layout has been optimised to enable the addition of more processing lines in the future.
Operating Costs
Table 6. Operating Cost(1) LOM
($million)
$/lb U3O8
Recovered
$/tonne of
Feed
Mining Cost 181 4.12 45
Processing Cost 219 4.97 54
G&A Cost 195 4.43 48
Cash Cost 596 13.52 148
Royalty (sliding scale based on EBIT formula) 141 3.20 35
Total Cash Cost 737 16.72 183
Sustaining Capital 73 1.67 18
AISC(2) 811 18.39 201
(1) Due to rounding, some columns may not total exactly as shown
(2) All-in sustaining cost per pound of U3O8 represents mining, processing and site G&A costs, royalty,
off site costs and sustaining expenditures, divided by payable 44.1 million pounds of U3O8
Capital Costs
Table 7. Capital Costs(1) Initial
($million)
Sustaining
Capital
($million)
LOM
($million)
Mining 55 43 97
Processing 67 4 71
Infrastructure 39 0 39
Total Direct Capital Costs 161 46 207
Indirect & Owner's Cost 12 4 16
Total Direct and Indirect Capital Costs 173 51 223
Contingency 30 13 43
Reclamation 0 10 10
Total Capital Costs 203 73 276
(1) Due to rounding, some columns may not total exactly as shown
Value Opportunities
In July 2017, Global Atomic signed a Memorandum of Understanding ( “MOU”) with Orano Mining, to supply a
minimum 100,000 tonnes of uranium-bearing rock per annum to Orano’s operations in Arlit, approximately 100
kilometers north of the Dasa Project , for a minimum of 5 years . Discussio ns between the two companies
regarding this development opportunity are on -going. A successful conclusion would result in Global Atomic
having reduced up-front capital requirements for commencing the project.
The PEA presents an optimized Phase 1 mine plan for the Dasa d eposit based on the extraction 4.13 million
tonnes of mineralised material from a sub-vertical section of the deposit on the flank of the graben, from depths
of approximately 70 meters to 600 meters below surface. Value opportunities exist in extending the mine -life
beyond an initial 12 years, as can be seen from the longitudinal projection shown below. A large volume of
mineralised material in the Inferred Resource category is present in the flat -lying portions of the graben
between 400 meters and 800 meters below surface that could be mined in future decades. In addition the
deposit remains open along strike and at depth.
Figure 1. Dasa longitudinal projection
Next Steps
Global Atomic is currently conducting hydrogeological and environmental studies for inclusion into the FTR to be
submitted to the Government of Niger later this year. Limited infill drilling is also being planned with the aim to
upgrade Inferred Resources to Indicated Resources.
Once the Mine Permit is issued, Global Atomic will be in a position to finalise the engineering , geotechnical and
any final infill drilling needed to construct the project.
Technical Information
The current PEA was prepared by CSA Global Consultants Canada Ltd (“CSA Global”). The PEA optimized Phase 1
is preliminary in nature and includes 12% Inferred Mineral Resources that are considered too speculative
geologically to have the economic considerations applied to them that would enable them to be categorized as
mineral reserves. A plan to upgrade the Inferred resources to Indicated resources is being evaluated at present.
Unlike mineral reserves, mineral resources do not have demonstrated economic viability. There is no certainty
that the PEA results will be realized.
The current PEA and other scientific and technical information contained in this news release were prepared by
CSA Global Pty. Ltd., in accordance with the Canadian regulatory requirements set out in National Instrument
43-101, Standards of Disclosure for Mineral Projects (“NI 43 -101”), and has been reviewed and approved by, as
it relates to mineral resources: Dmitry Pertel, M.Sc., MA IG, Principal Resource Geologist (CSA Global); as it
relates to metallurgy and processing: Russell Bradford BSc, MAusIMM (CP) Associate Principal Metallurgist (CSA
Global); as it relates to sampling, drilling, exploration and QAQC: George Flach , P.Geo (Global Atomic) ; as it
relates to mining, infrastructure, mining costs, environment and permitting: Michael Seymour, P.Eng., Associate
Principal Mining Engineer ( CSA Global ); and as it relates to financial modelling and economic analysis: Alex
Veresezan, P.Eng., Manager, Mining Americas (CSA Global). Dmitry Pertel, Russell Bradford, and Alex Veresezan
are all independent Qualified Persons (“QP”), as defined under NI 43 -101. George Flach is a non-independent
Qualified Person (“QP”), as defined under NI 43-101.
The mineral resource and mineral reserve estimates contained herein may be subject to legal, political,
environmental or other risks that could materially affect the potential development of such mineral resources.
The results of the PEA optimized Phase 1 will be summarized in a technical report prepared pursuant to NI 43 -
101. Which will be available on the Company’s website (www.globalatomiccorp.com) and will be filed on SEDAR
within 45 days. The technical re port will include more information with respect to the key assumptions,
parameters, methods and risks of determination associated with the foregoing.
About Global Atomic
Global Atomic Corporation is a TSX listed company that provides a unique combination of high-grade uranium
development and cash flowing zinc concentrate production.
The Company’s Uranium Division includes six exploration permits in the Republic of Niger covering an area of
approximately 750 km 2. Uranium mineralization has been identified on each of the permits, with the most
significant discovery being the Dasa deposit situated on the Adrar Emoles III concession, discovered in 2010 by
Global Atomic geologists through grassroots field exploration. The Dasa deposit is currently undergoing
feasibility studies and an EIS prior to applying for a Mining Permit in H2 2020.
Global Atomic’s Base Metals Division holds a 49% interest in the Befesa Silvermet Turkey, S.L. (“BST”) Joint
Venture, which operates a new, state-of-the art processing facility, located in Iskenderun, Turkey, that converts
Electric Arc Furnace Dust (“EAFD”) into a high-grade zinc oxide concentrate which is sold to zinc smelters around
the world. The Company’s joint venture partner, Befesa Zinc S.A.U. (“Befesa”) listed on the Fr ankfurt exchange
under ‘BFSA’, holds a 51% interest in and is the operator of the BST Joint Venture. Befesa is a market leader in
EAFD recycling, capturing approximately 50% of the European EAFD market, with facilities located throughout
Europe and Asia.
The new BST Joint Venture plant is expected to double annual production of zinc from 30 million lbs to 60
million lbs supported by EAFD supply currently available for processing in Turkey.
Key contacts:
Stephen G. Roman Merlin Marr-Johnson
Chairman, President & CEO Executive VP
Tel: +1 (416) 368-3949 Tel: +44 7803 712 280
Email: [email protected] Email: [email protected]
The information in this release may contain forward -looking information under applicable securities laws. Forward-looking information includes, but is not limited to, statements with respect to completion of
any financings; Global Atomic’s development pote ntial and timetable of its operating, development and exploration assets; Global Atomic’s ability to raise additional funds n ecessary; the future price of
uranium; the estimation of mineral reserves and mineral resources; conclusions of economic evaluation ; the realization of mineral reserve estimates; the timing and amount of estimated future production,
development and exploration; costs of future activities; capital and operating expenditures; success of exploration activitie s; mining or processing issue s; currency exchange rates; government regulation of
mining operations; and environmental and permitting risks. Generally, forward -looking statements can be identified by the use of forward -looking terminology such as "plans", “targets”, "expects" or "does
not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate ", or "believes", or variations of such words and phrases or statements that certain
actions, events or results "may", "could", "w ould", "might" or "will be taken", "occur" or "be achieved". All information contained in this news release, other than state ments of current and historical fact, is
forward looking information. Forward -looking statements are subject to known and unknown r isks, uncertainties and other factors that may cause the actual results, level of activity, performance or
achievements of Global Atomic to be materially different from those expressed or implied by such forward -looking statements, including but not limited to those risks described in the annual information form
of Global Atomic and in its public documents filed on SEDAR from time to time.
Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Although ma nagement of Global Atomic has attempted to identify important
factors that could cause actual results to differ materially from those contained in forward -looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended.
There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not
place undue reliance on forward -looking statements. Global Atomic does not undertake to update any forward -looking statements, except in accordance with app licable securities laws. Readers should also
review the risks and uncertainties sections of Global Atomic’s annual and interim MD&As.
These estimates have been prepared in accordance with the requirements of Canadian securities laws, which differ from the requirements of U.S. securities laws. The terms “mineral resource”, “measured
mineral resource”, “indicated mineral resource” and “inferred mineral resource” are defined in NI 43 -101 and recognized by Canadian securities laws but are not defined terms und er the U.S. Securities and
Exchange Commission (“SEC”) Guide 7 (“SEC Guide 7”) or recognized under U.S. securities laws. U.S. investors are cautioned no t to assume that any part or all of mineral deposits in these categories will ever
be upgraded to minera l reserves. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and great uncertainty as t o their economic and legal feasibility. It cannot be assumed
that all or any part of an “inferred mineral resource” will ever be up graded to a higher category. Under Canadian securities laws, estimates of “inferred mineral resources” may not form the basis of feasibility
or pre -feasibility studies. U.S. investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable. Accordingly, these mineral resource
estimates and related information may not be comparable to similar information made public by U.S. companies subject to the r eporting and disclosure requirements under the U.S. federal securities laws and
the rules and regulations thereunder, including SEC Guide 7.
The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.