Global Atomic Announces Q2 2022 Results
NEWS RELEASE
Global Atomic Announces Q2 2022 Results
Toronto, ON, August 11, 2022: Global Atomic Corporation (“Global Atomic” or the “Company”),
(TSX: GLO, OTCQX: GLATF, FRANKFURT: G12) announced today its operating and financial
results for the three and six months ended June 30, 2022.
HIGHLIGHTS
Dasa Uranium Project
➢ In Q4 2021, the Company began a 15,000-meter drill program at the Dasa Project with three
objectives:
o Conduct infill drilling to upgrade Inferred Resources to Indicated Resources so that
they may be included in a revised mine plan.
o Connect Mining Zones 2, 2a and 2b to Zone 3 to form one continuous expanded zone
instead of four separate zones.
o Expand the total resources in the area of Phase 1.
➢ On April 19, 2022, the Company provided a second update on the drill program that included
the probe results of 10 additional holes which indicated that mining zones 2, 2a, 2b and 3 now
represent a contiguous ore body approximately three times larger than initially defined in the
Phase 1 Feasibility Study mine plan.
➢ On April 19, 2022, the Company also announced that it had received a Letter of Interest from
Export Development Canada (“EDC”) confirming thei r interest in working with the Company
in regard to the financing of the Dasa Uranium Project.
➢ On June 15, 2022, the Company announced that it had entered into a Letter of Inte nt with a
major North American utility to supply 2.1 million pounds U 3O8 over a six-year period
commencing 2025; the revenue potential of this sale exceeds US$110 million in real terms
and represents about 7% of Phase 1 production.
➢ On June 20, 2022, the Company announced that it had received Letters of Intent from a
banking syndicate to finance the processing plant at Dasa and that the syndicate is comprised
of North American financial institutions, including EDC.
➢ On July 21, 2022, the Company announced it had engaged Enernet Global Inc. (“Enernet”) to
design an optimal hybrid power solution for the Dasa Project, which would be built, owned,
operated and maintained by Enernet.
➢ The Box -Cut excavation for the mine continued and was completed with ground support
installed subsequent to the end of the quarter.
➢ Site work in preparation for portal and ramp development includes construction of employee
housing, warehouse and maintenance facilities, surface buildings for mining activities, power
and water servicing of the site.
➢ A convoy of 37 trucks carrying camp infrastructure including accommodations, generators and
office buildings has arrived on site in anticipation of the arrival of the mining team.
Page 2 of 13
➢ The Company’s Niger mining subsidiary , Société Minière de DASA S.A. (“SOMIDA”) was
incorporated on August 11, 2022.
➢ The Niger Government elected to increase its interest in total to 20% of SOMIDA, including
the 10% free carried interest and an additional 10% interest to be funded.
Turkish Zinc Joint Venture
➢ The Turkish Zinc Joint Venture (“BST” or the “Turkish JV”) plant processed 45,611 tonnes
EAFD for first six months of 2022 (36,642 in 2021).
➢ The Company’s share of the Turkish JV EBITDA was $2.5 million in Q2 2022 ($1.6 million in
Q2 2021).
➢ Year-to-date 2022, the Company’s share of EBITDA was $6.0 million ($5.8 million in 2021).
➢ For the first six months of 2021 and 2022, the zinc contained in concentrate shipments was
20.0 million pounds.
➢ In the first six months of 2022 the average zinc price was US$1.74/lb (US$1.28/lb in 2021).
➢ The non-recourse Befesa 2019 plant expansion loan was fully paid at the end of Q2 2022, a
reduction of US$4.65 million from the year end.
➢ The revolving credit facility of the Turkish JV has been paid down to US$6.8 million at the end
of Q2 2022 (Global Atomic share – US$3.3 million).
➢ The cash balance of the Turkish JV was US$2.8 million as at June 30, 2022.
Corporate
➢ At the Company’s Annual and Special Meeting of Shareholders on June 23, 2022, George
Flach, Vice Chairman and VP Exploration resigned from the Board and Management but
continues as a consultant to the Company.
➢ Fergus P. Kerr, P.Eng, former General Manager of Denison’s Elliot Lake uranium operatio n
joined the Board of Directors.
➢ Global Atomic continues to receive management fees and sales commissions monthly from
the Turkish JV ($398,000 in Q2 2022 compared to $167,000 in Q2 2021).
➢ Cash balance at June 30, 2022, was $15 million.
President & CEO of Global Atomic, Stephen Roman, stated, “ Global Atomic had an excellent
second quarter of 2022. We advanced several key initiatives for the Dasa Project and our Turkish
JV Zinc operation had a strong operating performance and made its final payment on t he 2019
expansion loan.”
“Earlier today, the Company finalized the formation of SOMIDA as its Niger subsidiary enabling
the Company to accelerate activities in Niger . With all permits in place and project financing
scheduled for completion by the end of the year, Dasa remains on track for yellowcake production
by the beginning of 2025.”
“We believe the Dasa Project is well timed with the renaissance in demand for nuclear power.
Global Atomic is expected to be in the lowest cost quartile of uranium producers.”
Page 3 of 13
OUTLOOK
Dasa Uranium Project
➢ The banking syndicate that intends to finance the processing plant at Dasa has begun its due
diligence process and expects to close its project financing in Q4 of this year.
➢ The Company is continuing discussions with Orano Mining relating to the direct shipment of
development ore to the Soma ïr processing facility located 105 kilometers north of the Dasa
Project.
➢ Discussions with international Electric Utilities continue with the expectation that additional
long-term contracts will be concluded during 2022.
➢ Surface infrastructure construction to support mine and mill development activities continues.
➢ Mining equipment and supplies have arrived on site and at the Port of Cotonou in Benin to
support the start of mine development.
➢ Additional mining equipment and supplies will arrive throughout Q3 2022.
➢ CMAC-Thyssen (“CMAC”), the Company’s contract miner, will begin training programs in Q3
2022 and start mine development in Q4 2022.
➢ The Company’s EPCM strategy (Engineering, Procurement, and Construction Management)
is expected to be finalized in Q3, with detailed engineering and procurement activities
beginning shortly thereafter.
➢ On completion of the Dasa drill program anticipated in early September, and subsequent
receipt of assays, the Company will update the current Mineral Resource Estimate (“MRE”).
➢ Following the MRE update, a revised Mine Plan will be developed, and the reserve statement
updated. It is expected that this will result in an increase in Phase 1 o re reserves and lower
operating costs.
➢ Permeability and porosity test results to determine in-situ leaching potential for the Isakanan
Project on the Adrar Emoles 4 permit are expected in Q3 2022.
Turkish Zinc Joint Venture
➢ The Turkish zinc plant continues to operate at target operating efficiencies.
➢ The zinc price has weakened but remains well above the 2020 low price of US$0.80/lb, at
which the Turkish JV was still profitable.
➢ The business outlook continues to be positive amid inflationary pressures and lower prices.
➢ Now that the Befesa loan has been repaid, Turkish JV dividend payments will resume.
COMPARATIVE RESULTS
The following table summarizes comparative results of operations of the Company:
Page 4 of 13
The consolidated financial statements reflect the equity method of accounting for Global Atomic’s
interest in the Turkish JV.
Revenues include management fees and sales commissions received from the joint venture.
These are based on joint venture revenues generated and zinc concentrate tonnes sold.
General and administration costs at the corporate level include general office and management
expenses, stock option awards, depreciation, costs related to maintaining a public listing,
professional fees, audit, legal, accounting, tax and consultants’ costs, insurance, travel and other
miscellaneous office expenses. The variance between the years is largely due to higher stock
option grants in Q1 2022 and increased staffing that took place in Q2 and Q3 2021.
Share of net earnings from joint venture represents Global Atomic’s equity share of net
earnings from the Turkish JV. In view of higher zinc prices in 2022, operating margins more than
(all amounts in C$) 2022 2021 2022 2021
Revenues 397,862$ 166,627$ 829,978$ 609,790$
General and administration 1,856,994 1,704,173 5,033,228 3,715,706
Share of equity loss (earnings) (1,095,964) (308,491) (2,529,301) (1,809,581)
Other (income) expense (15,076) (32,000) 591,635 (67,000)
Finance (income) expense (13,321) 6,262 (43,138) 10,601
Foreign exchange (gain) loss (113,508) 82,755 67,413 53,373
Net income (loss) (221,263)$ (1,286,072)$ (2,289,859)$ (1,293,309)$
Other comprehensive income (loss) (2,287,301)$ (792,754)$ (4,535,985)$ (3,886,893)$
Comprehensive income (loss) (2,508,564)$ (2,078,826)$ (6,825,844)$ (5,180,202)$
Basic and diluted net loss per share ($0.001) ($0.008) ($0.013) ($0.008)
Basic and diluted weighted-average
number of shares outstanding 177,036,594 162,119,449 175,963,295 158,934,765
June 30, December 31,
2022 2021
Cash 14,964,775$ 34,179,449$
Property, plant and equipment 60,981,836 46,175,097
Exploration & evaluation assets 914,132 681,989
Investment in joint venture 9,572,848 8,981,986
Other assets 2,717,982 3,581,512
Total assets 89,151,573$ 93,600,033$
Total liabilities 1,444,009$ 2,895,756$
Shareholders' equity 87,707,564$ 90,704,277$
Three months ended June 30, Six months ended June 30,
Page 5 of 13
offset the non -cash expenses, resulting in a positive equity inc ome of $1.1 million in Q2 2022
($308,500 in Q2 2021) and $2.5 million in H1 2022 ($1.8 million in H1 2021).
Other Comprehensive Income (loss) represents unrealized exchange gains (losses) that arise
from the translation of the balance sheets from function al currencies (West African CFA Franc
and Turkish Lira) to the Canadian dollar presentation currency. For example, the Turkish plant
had a cost to construct that is reported in Turkish Lira, translated at the time the investment was
made. Since then, the T urkish Lira has depreciated relative to the Canadian dollar, so an
unrealized loss occurs on translation of the same asset at the current date, even though there
has been no change in its economic value. This unrealized loss on translation of non -monetary
balance sheet assets and liabilities is recorded as comprehensive income (loss).
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 for
the first 12 years (“Phase 1”). The Phase 1 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.
Laboratory test work was undertaken in three independent pilot plant campaigns with results from
each campaign guiding and directing the subsequent campaign. Variations in quantity and type
of process recovery consumables were used to determine the optimum recovery of uranium for
the most practical equipment selection with the lowest reasonable consumable cost. The final
selection of the process followed the principles established in uranium operations in the region
which have proven to be successful over the past 50 years.
Mineral Reserves for the Dasa Project were estimated based on the geology and Mineral Reserve
Estimate (“MRE”) previously reported by CSA Global. An engineering design and costing exercise
was undertaken to a feasibility study level of accuracy which supports the MRE.
Detailed engineering designs were undertaken for the underground mine workings, mining
surface infrastructure, process plant, tailing storage facility, and support services infrastructure.
These designs enabled detailed pricing enquiries to be issued to the market in the development
of a comprehensive capital cost and sustaining cost estimate. Labour and consumable material
requirements were developed and costed in the open markets to establish an expected operating
cost over Phase 1. Sourcing of electrical power and water was determined to meet the mine
requirements, and these too, contributed to the operational cost estimate. The capital cost
estimate, sustaining cost estimate and operational cost estimates for the various elements of the
mine and process plant were combined into an economic analysis of the project to determine a
financial model for the mine.
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.
Page 6 of 13
The Phase 1 Feasibility Study identified five zones of mineral reserves as shown in the following
schematic.
Page 7 of 13
The mining inventory included in the Feasibility Study included a minor amount of Inferred
Resources shown as follows:
The Zones vary in grades, with Zone 1 (Flank Zone) contributing the largest portion of the U 3O8
tonnes:
Reserve Expansion
As noted on the overall resource schematic, there are significant Inferred Resources located
above Zone 3 and between Zones 2 and 3. 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 Q3 2022. Once the assays have been
received, the MRE will be up dated to reflect both the additional resources and changes in
resource categorization.
These drill results indicate that Zones 2, 2a and 2b now represent a contiguous zone with Zone
3 which is estimated to be approximately three times larger than initially defined (see the
longitudinal depiction on the following page ). Recent drilling has also targeted the extension of
Zone 4.
As the next step to compiling these drill results into a new Mineral Resource Estimate (“MRE”) for
Dasa, the Company has engaged Dmitry Pertel of AMC Consultants of Perth, Australia. Mr. Pertel
completed all the previous work on the Dasa Project while with CSA Global. The updated MRE
results will then be used to develop an updated Mine Plan and resultant Reserves update. With
increased Indicated Resources between Zones 2 and 3, such resources are expected to extend
Page 8 of 13
the number of years of mining in Zones 2 a nd 3, which will defer the development required to
access Zones 4 and 5. This should improve overall production costs of the Dasa Project.
Mining Permits and Niger Mining Company
In September 2020, GAFC applied for the Mining Permit on the Dasa deposit and the Mining
Permit was subsequently awarded on December 23, 2020. The Company also completed its
Environmental Impact Statement and on January 28, 2021 received its Environmental Certificate
of Compliance. GAFC now holds all permits required to construct and mine the Dasa deposit.
Under Niger’s Mining Code, upon the issuance of a mining permit, the resource must be
transferred to a newly incorporated Niger mining corporation, which the Company and the Niger
Mines Minister have agreed to name Soc iété Minière de Dasa S.A. (“SOMIDA”). SOMIDA was
incorporated on August 11, 2022. The Republic of Niger is granted 10% of the common shares
of SOMIDA at no cost on a carried interest basis and GAFC is entitled to be repaid 100% of the
historic exploration costs incurred. The Republic of Niger has also elected to increase its interest
in the common shares of SOMIDA by 10% by committing to fund its proportional share of future
debt and equity requirements. Subsequent to the incorporation of SOMIDA, the Republic of Niger
has no rights to further increase its interest. The Government interest in SOMIDA is solely in the
common shares of that entity and entitles it to payments of dividends on such equity shares.
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