Global Atomic Announces Q1 2023 Results Dasa Uranium Project On Schedule to Produce Yellowcake in Q1 2025
NEWS RELEASE
Global Atomic Announces Q1 2023 Results
Dasa Uranium Project On Schedule to Produce Yellowcake in Q1 2025
Toronto, ON, May 11, 2023: Global Atomic Corporation (“Global Atomic” or the “Company”),
(TSX: GLO, OTCQX: GLATF, FRANKFURT: G12) announced today its operating and financial
results for the quarter ended March 31, 2023.
HIGHLIGHTS
Dasa Uranium Project
The Company revised its Dasa Project, Phase 1, Feasibility Study which:
o 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.
o outlines 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.
o 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.
o estimates initial capital expenditures to be US$208 million.
o Calculated for Phase 1 using a U3O8 price of US$35/lb an after-tax NPV8 of US$147
million and an after-tax IRR of 22.3% and using a U3O8 price of US$50/lb an after-tax
IRR of 44.4% and at US$60 the after-tax IRR would be 56.9%.
The access ramp to the underground Dasa deposit has progressed 325 meters at the end of
April 2023, about 40% complete before reaching the ore level.
Dasa Uranium Project: Subsequent events
On May 8, 2023, the Company formalized its June 2022 Letter of Intent by signing a definitive
agreement with a second major North American utility for their procurement of up to 2.1 million
pounds U3O8 from Dasa within a multi-year delivery window beginning in 2025.
The Company is in the process of completi ng a revised Mineral Resource Estimate (“MRE”)
for the Dasa Project to include results from the 16,000-meter drill program initiated at the end
of 2021.
Long-lead items have been selected and are in the process of being ordered.
Turkish Zinc Joint Venture
In early March 2023, the recycling plant resumed operation following a thorough inspection
and assessment of the facility after the earthquake of February 6, 2023.
The Turkish Zinc Joint Venture (“BST” or the “Turkish JV”) plant processed 6,125 tonnes
EAFD in Q1 2023 as the plant was shutdown at the time of the initial earthquake and remained
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down until regional infrastructure could support a safe resumption of operations in early
March.
The Company’s share of the Turkish JV EBITDA was a loss of $0.4 million in Q1 2023 ($3.4
million gain in Q1 2022).
The zinc contained in concentrate sales in Q1 2023 was 3.7 million pounds.
The average monthly LME zinc price was US$1.42/lb in Q1 2023.
The revolving credit facility of the Turkish JV was US$12.47 million at the end of Q1 2023
(Global Atomic share – US6.1 million)
The cash balance of the Turkish JV was US$0.6 million at the end of Q1 2023.
Corporate
The Company completed a bought deal short form prospectus offering of 18,666,667 Units
on March 17, 2023, at a price of $3.00 per Unit for gross proceeds of $56,002,501. Each Unit
comprised one common share and one-half warrant exercisable at $4.00 per common share.
Global Atomic continues to receive quarterly management fees and monthly sales
commissions from the Turkish JV ($131,000 in Q1 2023 compared to $423,000 in Q1 2022),
helping to offset corporate overhead costs.
Cash balance at March 31, 2023, was $52 million.
Global Atomic President and CEO, Stephen G. Roman commented, “ I am pleased to report on
how well the Dasa Project development is progressing. Our current cash position allows us to
continue with project development on schedule and our bank financing is progressing. We
continue to advance our ramp access to the orebody, are placing orde rs for long- lead plant
equipment and have already built out a full in-country mining team with experienced miners and
a complement of trainees from the villages near the Project. The ramp development now exceeds
325 meters and is expected to reach the top of the ore body in Q4 2023.”
“We are pleased to report that mill equipment costs to date are in line with our Feasibility Study
estimates which were calculated at the peak of inflation for equipment and shipping costs that
have since declined to near pre-pandemic levels.
Further, our estimated cost structure allows the Dasa Project to be profitable at a uranium price
of US$35/lb, improving to an IRR of over 44% at today’s current spot price, now over US$50/lb.
Having signed two off -take agreement with Western utilities at favourable prices and based on
positive discussions at the recent World Nuclear Fuel Cycle conference in The Hague, we expect
additional offtake agreements will materialise as we continue to de-risk the Dasa Project”.
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OUTLOOK
Dasa Uranium Project
The Company’s banking syndicate is now expected to finalize a term sheet by the end of Q2
2023 and to approve the debt facility of the Project Financing prior to the end of Q3 2023.
Additional uranium sales contracts with international electric utilities are expected once
Project Financing details are announced.
The Company plans to issue a newly updated MRE in Q2 2023, followed by a revised
Feasibility Study in Q4 2023.
Detailed engineering is in progress with earthworks underway and civil works expected to
begin in Q4 2023. Components for the Dasa Plant construction will begin to arrive on site by
the end of Q4 2023.
The Main Decline to the Dasa deposit is expected to reach the top of the Flank Zone ore in
Q4 2023, when initial Development Ore will be brought to surface.
Turkish Zinc Joint Venture
The Electric Arc Furnace Dust (“EAFD”) recycling plant is expected to operate at full capacity
through to the end of May 2023, however supply interruptions of EAFD are expected to
continue until Turkish steel mills resume historic operating levels.
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COMPARATIVE RESULTS
The following table summarizes comparative results of operations of the Company:
(all amounts in C$) 2023 2022
Revenues 130,841$ 432,116$
General and administration 2,832,831 3,176,234
Share of equity loss (earnings) 1,388,274 (1,433,337)
Other expense - 606,711
Finance income (71,468) (29,817)
Foreign exchange loss 1,210,716 180,921
Net loss (5,229,512)$ (2,068,596)$
Net loss attributable to:
Shareholders of the Company (5,237,663) (2,068,596)
Non-controlling interests 8,151 -
Other comprehensive income (loss) 2,718,776$ (2,248,684)$
Comprehensive loss (2,510,736)$ (4,317,280)$
Comprehensive loss attributable to:
Shareholders of the Company (2,518,218) (4,317,280)
Non-controlling interests 7,482 -
Basic and diluted net loss per share ($0.03) ($0.01)
Basic weighted-average
number of shares outstanding 184,583,128 174,878,070
Diluted weighted-average
number of shares outstanding 184,583,128 174,878,070
March 31, December 31,
2023 2022
Cash 52,053,620$ 8,400,008$
Property, plant and equipment 91,353,371 82,234,716
Exploration & evaluation assets 1,193,347 1,115,983
Investment in joint venture 16,587,783 16,387,040
Other assets 3,316,136 2,118,258
Total assets 164,504,257$ 110,256,005$
Total liabilities 10,665,997$ 8,746,681$
Shareholders' equity 153,838,260$ 101,509,324$
Three months ended March 31,
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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. See also the commentary above under “Turkish Zinc EAFD
Operations.”
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.
General and administration costs at the corporate level include general office and management
expenses, stock option awards, depreciation, costs related to maintaining a public listing,
professional fees, audit, legal, accounting, tax and consultants’ costs, insurance, travel, and other
miscellaneous office expenses.
Share of net earnings from joint venture represents Global Atomic’s equity share of net
earnings from the Turkish JV. In view of limited production, lower zinc prices in 2022,
extraordinary expenses due to the earthquake, resulting in a negative equity income of $1.4
million.
Uranium Business
Mineral Resources and Reserves
On January 9, 2023, the Company revised its Dasa Project, Phase 1, Feasibility Study
(“Feasibility Study”), which was revised primarily to apply “zero grade” to Inferred Resources
included in certain stopes of the Phase 1 Mine Plan.
The Zones shown in the above section vary in grades, with Zone 1 (Flank Zone) contributing the
largest portion of the U3O8 tonnes:
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Feasibility Study including
Inferred Resources
Revised Feasibility Study with
“zero grade” Inferred
Resources
Zone
In-situ
Tonnes U3O8 PPM
RoM
Tonnes RoM U3O8 PPM
RoM U3O8
Tonnes
RoM U3O8
PPM
RoM U3O8
Tonnes
1
2,464,615 6,980
2,316,047
6,887
15,950
6,847
15,856
2
264,339 3,621
256,078
3,574
915
3,540
906
3
656,114 3,093
633,541
3,056
1,936
2,480
1,571
4
604,673 3,003
584,616
2,966
1,734 2,872
1,679
5
478,916 3,312
463,345
3,269
1,515
3,031
1,405
Total
4,468,657 5,279
4,253,626
5,184
22,050
5,035
21,417
The inferred resources, representing 4.4% of total mineral resources to be mined in Phase I, was
treated as zero grade waste in the revised feasibility study. Impacts of this grade change are
summarized in the table below:
Original Feasibility
Study
Revised Feasibility
Study
Average mill feed grade (ppm) 5,184 5,267
Total production over 12-year Phase 1 mine plan (Mlb) 45.4 44.1
Average cash cost1 (US$/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
Reserve Expansion
The Company completed a 15,000-meter drill program at its Dasa Project that began in Q4 2021,
which 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 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 its 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.
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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 of 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 oper ating 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. Following 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.
The first blast of the portal took place on November 5, 2022, marking the start of the underground
development. Surface infrastructure to support CMAC was completed during 2022. At the Dasa
Mine, operations ar e proceeding on schedule with 325 meters of underground development
completed at the end of April 2023 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 engagemen t
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is expected to extend to construction management in view of their extensive West African
experience.
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 project financing US$75 million of the
Dasa Project. On June 15, 2022, Global Atomic also received addit ional 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.
Due diligence has been underway since June 2022 and has largely been completed . The
Company’s banking syndicate is expected to finalize a term sheet by the end of Q2 2023 and to
complete documentation and close the debt facility by the end of Q3 2023.
Turkish Zinc 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 the 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).
The following table summarizes comparative operational metrics of the Iskenderun facility.