Global Atomic Announces Q3 2021 Results Dasa Uranium Project Feasibility Study Nears Completion - Stronger Uranium and Zinc Prices Improve Outlook
NEWS RELEASE
Global Atomic Announces Q3 2021 Results
Dasa Uranium Project Feasibility Study Nears Completion
-
Stronger Uranium and Zinc Prices Improve Outlook
All monetary amounts are in Canadian dollars unless otherwise indicated.
Toronto, ON, November 11, 2021: 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 nine months ended September 30, 2021.
HIGHLIGHTS
Dasa Phase 1 Uranium Project in the Republic of Niger
The Company’s Feasibility Study is near completion and will be released in November.
The Company’s financial adviser has received initial interest from project finance institutions
and negotiations are expected to escalate upon the release of the Feasibility Study.
The Company and Fuel Link Ltd., have initiated Yellowcake offtake discussions with Utliities
and presented the Dasa Project’s expected development timelines and production schedule.
In August, the Republic of Niger confirmed it will limit its interest in the Dasa Project to the
statutory 10% minimum through the Company’s Niger mining subsidiary.
The Company is advancing negotiations with Orano Mining (“Orano”) relating to Direct
Shipping Ore (“DSO”).
The Company began the 15,000 meter Dasa drill program in September 2021 as planned,
with a focus on upgrading mineral resources located on strike of the Phase 1 Flank Zone
mining area to the Measured and Indicated categories and, extending mineralization on strike.
The Company also began a drill program at the Isakanan deposit on the Adrar Emoles 4
permit to recover core for In-Situ leach testing.
Turkish Zinc Joint Venture
The Company’s share of Turkish Zinc Joint Venture (“Turkish Zinc JV”) EBITDA was $3.1
million in Q3 2021 compared with $1.2 million in Q3 2020, reflecting higher zinc prices and
production levels in 2021.
Through Q3 2021 the Company’s share of Turkish Zinc JV EBITDA was $8.9 million compared
to $2.9 million in 2020.
The Company’s share of Turkish Zinc JV Net Income for Q3 2021 was $2.1 million compared
to a loss of $1.4 million in Q3 2020. For the 9 months ended September 30, 2021, the
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Company’s share of Turkish Zinc JV Net Income was $3.9 million compared to a loss of $3.0
million in 2020.
For the 9 months ended September 30, 2021, the Turkish Zinc JV processed 53,012 tonnes
EAFD (2020 – 51,295 tonnes) and shipped 28.1 million pounds zinc contained in concentrates
(2020 – 30.6 million pounds).
Shipments of zinc concentrate from the Turkish Zinc JV to smelters continued unabated in Q3
2021 despite energy-related shutdowns at some smelters.
Cash balance for the Turkish Zinc JV at September 30, 2021 was US $4.0 million.
The non-recourse Turkish Zinc JV debt owing to Befesa was reduced to US $5.65 million at
September 30, 2021 (Global Atomic share – US $2.77 million) and on schedule to be fully
repaid by year end.
Corporate
Cash balance at September 30, 2021 was $7.6 million.
Stephen G. Roman, President and CEO commented, “We are entering a new era of clean,
sustainable electric energy where uranium will play an important role in meeting the world’s
carbon emissions targets. We are fortunate to have advanced our Dasa Project to completion of
the Feasibility Study through some difficult years and are now rewarding our shareholders with a
world class project fully permitted and ready to build. The Uranium market fundamentals have
improved substantially and many nations are now adopting the benefits of baseload nuclear
power with China leading the charge with the recent announcement of 150 new reactor builds
over the next 15 years.”
“The zinc price rise over the past year has also been impressive and contributed to a rapid
payback of development capital at our Iskenderun Project which remains on track for the year
end payout of the Befesa loan.”
“The Dasa Project is progressing on several fronts. As we complete the Feasibility Study to build
the mine and processing plant, we have also initiated activity at the Dasa Project site. A local
Niger contractor has been engaged to begin Box -Cut excavation in January. Once completed ,
CMAC-Thyssen, a Canadian mine contractor based in Val d’Or, Quebec, will collar the portal and
begin underground mine development. Equipment for these work programs has been secured.”
“Our in-fill drilling program is currently underway to upgrade on strike resources and add additional
potential to the Phase 1, Flank Zone mining area. At our Isakanan deposit, core samples are now
being rec overed through additional drilling in order to test the deposit’s porosity and
permeability for In-Situ leaching.”
“Global Atomic has been very active over Q3, and our pace will continue as we remain on track
for deliveries of first Yellowcake by January, 2025.”
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OUTLOOK
Dasa Uranium Project
The Feasibility Study results will be announced in November.
The Company will complete the incorporation of the Niger mining company and issue 10% of
the common shares to the Government of the Republic of Niger.
The Company has engaged a Niger contractor to begin the mine Box-Cut excavation in
January 2022.
CMAC-Thyssen International (“CMAC”) has been selected as the contract miner for the Dasa
mine development. Contract discussions are being finalised.
CMAC is planning to mobilize to site in March 2022 and begin ramp development in April,
2022. CMAC will provide contract mining services for the first 2 years, after which the
Company plans to transition to owner-operated mining.
The Dasa mineral resource will be updated in 2022 to include results from the c urrent drill
program, enabling design of the Dasa Phase 2 Mining Area with economics that are expected
to increase the current Dasa Project NPV/IRR. The Phase 1, Flank Zone area encompasses
only 20% of the current Dasa resource.
The Company is continuing discussions with Orano Mining for the processing of DSO at the
Somaïr facility and could begin shipments in 2023.
Upon completion of the Feasibility Study, the Company will enter discussions to select an
Engineering, Procurement, Construction and Management (“EPCM”) contractor.
Initial project debt financing discussions have begun and financing for the mill construction is
expected to be in place H2 2022.
The Company will advance ramping and underground development in 2022 with plant
construction beginning Q1 2023.
The Dasa Uranium Plant is expected to commence commercial production in Q4 2024.
Turkish Zinc Joint Venture
The Turkish Zinc JV plant is expected to process approximately 70,000 tonnes EAFD in 2021.
Zinc prices staged a strong recovery in 2021, averaging US $1.36/pound in Q3 2021, and are
expected to remain strong through the balance of the year and into 2022.
Turkish steel production is expected to strengthen through the remainder of 2021 and into
2022.
Full repayment of the Befesa plant modernization loan is anticipated by the end of 2021.
Turkish Zinc JV dividend payments will resume following repayment of the non-recourse loan
from Befesa.
Global Atomic continues to receive monthly management fees and sales commissions helping
to offset corporate costs.
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COMPARATIVE RESULTS
The following table summarizes comparative results of operations of the Company:
The consolidated financial statements reflect the equity method of accounting for Global Atomic’s
interest in BST. The Company’s share of net earnings and net assets are disclosed in the notes
to the financial statements.
Revenues include management fees and sales commissions received from the Turkish Zinc JV.
These are based on joint venture revenues generated and zinc concentrate tonnes sold.
(all amounts in C$) 2021 2020 2021 2020
Revenues 223,645$ 146,225$ 833,435$ 595,878$
General and administration 1,839,403 676,197 5,555,109 2,177,485
Share of equity loss (earnings) (2,134,265) 1,384,333 (3,943,846) 2,988,607
Other income (1,000) (33,044) (68,000) (93,044)
Finance expense 7,709 3,870 18,310 12,726
Foreign exchange loss (gain) 7,481 (2,659) 60,854 (20,788)
Net income (loss) 504,317$ (1,882,472)$ (788,992)$ (4,469,108)$
Other comprehensive income (loss) 148,130$ (924,400)$ (3,738,763)$ (1,023,689)$
Comprehensive income (loss) 652,447$ (2,806,872)$ (4,527,755)$ (5,492,797)$
Basic net income per share $0.003 ($0.012) (0.005)$ (0.030)$
Diluted net income per share $0.003 ($0.012) (0.005)$ (0.030)$
Basic weighted-average number of
shares outstanding 162,330,717 150,695,797 160,449,845 149,402,735
Diluted weighted-average number of
shares outstanding 172,921,252 157,871,978 160,449,845 157,541,571
30-Sep 31-Dec
2021 2020
Cash 7,559,938$ 2,448,235$
Exploration & evaluation assets 43,264,573 37,812,477
Investment in joint venture 13,288,281 11,497,351
Other assets 1,976,907 1,283,024
Total assets 66,089,699$ 53,041,087$
Total liabilities 1,087,648$ 1,231,149$
Shareholders' equity 65,002,051$ 51,809,938$
Three months ended September 30, Nine months ended September 30,
As at
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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 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
Upon completion of the PEA, the Company undertook various optimization and trade-off studies
and initiated the final Feasibility Study for the Phase 1 mine plan. The results of the Feasibility
Study are expected to be announced shortly.
After close to 50 years in operation, in March 2021 Orano shut the Cominak underground mine in
Arlit, located approximately 100 kilometers north of the Dasa Project, due to ore exhaustion. The
Cominak shut down provides the Company with a large skilled work force available for the Dasa
Mine. Global Atomic has begun the interviewing process and plans building the in-country Global
Atomic mining team over the coming months.
The Company signed a Memorandum of Understanding with Orano Mining in 2017, to supply
DSO to its Somaïr plant and to explore other opportunities for cost savings for both operations.
The Company has continued to advance its negotiations with Orano to process up to 500,000
tonnes of Dasa development ore at the Somaïr facility.
The Company has engaged HCF International Advisers as financial adviser to assist with the
arrangement of project debt financing. Concurrently, the Company has developed a marketing
strategy and discussions are ongoing with utilities with a view of securing contracts for a portion
of Dasa Phase 1 Yellowcake production.
The Company began a 15,000-meter drill program at Dasa in September 2021. The drill program
is focused on upgrading Indicated and Inferred resources on strike of the Phase 1 Flank Zone
Mining Area to the Measured and Indicated categories plus an extension of mineralization on
strike. With the upgrading of the on-strike resources, the Phase 1 Flank Zone mining may expand,
adding to the current 12-year mine plan at the Flank Zone, as w ell as allowing Global Atomic to
define the Phase 2 mine plan incorporating the upgraded mineral resources.
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The Company also initiated a drill program at the Isakanan deposit in September. Previous drilling
has indicated a substantial resource exists. The Isakanan deposit may be amenable to In-Situ
leaching and the current drill program and related test work will define this potential.
Turkish Zinc JV EAFC Operations
The following table summarizes comparative operational metrics of the Turkish Zinc JV facility.
The average zinc price in Q3 2021 was US $1.36/lb, up from US $1.06/lb in Q3 2020. The zinc
price was negatively affected by COVID -19 in Q1 & Q2 2020, but began recovering from the
summer 2020 through to the end of the year. The zinc price has continued its upward trend
throughout 2021. China has imposed reduced operating hours for smelters and European
smelters have reduced production, both the result of higher energy costs and lower availability.
Notwithstanding, Waelz oxide concentrates sold by Befesa, including those from the Turkish Zinc
JV, continue to be in high demand, so there has been no impact on our business.
A general recovery in the steel industry began in Q3 2020 and has continued into 2021. For the
9 months ended September 30, 2021, global steel production was up 7.8% over the comparable
2020 period. Global steel production in Q3 2021 showed virtually no change from the same period
in 2020. Within this, Chinese steel production declined by 13% in Q3 2021 compared with Q3
2020, resulting in a decline in China’s market share from 60% to 53%. Steel production in the rest
of the world increased by 19% in Q3 2021 when compared to 2020.
The World Steel Association recently published its short-term outlook for demand, which projects
a 2.2% overall global demand growth in 2022. This demand growth is broadly -based across all
countries, with the exception of China, where demand growth is projected to be flat in 2022. China
has experienced adverse weather, a weakened real estate sector, and government caps on steel
production due to energy constraints. The World Steel Association expects all economies to
experience continued steel demand growth due to pent up demand in the manufacturing sector
and the gradual easing of supply chain disruptions in the automotive sector.
Three months ended September 30, Nine months ended September 30,
2021 2020 2021 2020
100% 100% 100% 100%
Exchange rate (TL/C$, average) 6.78 5.44 6.44 4.98
Exchange rate (C$/US$, average) 1.26 1.33 1.25 1.35
Exchange rate (TL/C$, period-end) 6.98 5.80 6.98 5.80
Exchange rate (C$/US$, period-end) 1.27 1.33 1.27 1.33
Average zinc price (US$/lb) 1.36 1.06 1.31 0.97
EAFD processed (DMT) 16,370 12,269 53,012 51,295
Production (DMT) 5,461 4,593 18,478 18,755
Shipments (DMT) 5,460 4,189 18,658 19,941
Shipments (zinc content '000 lbs) 8,015 6,296 28,071 30,641
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Turkish steel production has increased by 15% in the 9 months of 2021 compared with 2020.
Expanding consumer loans and infrastructure projects have helped to drive steel demand. As
well, Turkey has increased its exports to offset reduced Chinese exports. The steel producers in
Turkey are increasing production capacity. In recent months, a major Electric Arc Steel Mill in the
Iskenderun region has resumed production in a plant that had been on care and maintenance for
a number of years. Another producer has announced plans to begin construction of a new plant
in the Iskenderun region. In the Izmir region, two steel producers have announced plans to expand
their production facilities. These projects will increase the supply of EAFD in the Turkish market
and should enable the Turkish Zinc JV to increase throughput at the Iskenderun plant.
The following table summarizes comparative results of the Turkish Zinc JV at 100%.
(1) 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. EBITDA comprises earnings before income taxes, interest expense
(income), foreign exchange loss (gain) on debt, depreciation, management fees, sales commissions, losses ( gains) on sale of
property, plant and equipment and impairment charges.
The Turkish Zinc JV realized significant growth in revenues during the nine months of 2021
compared to the same period in 2020, benefitting from higher zinc prices and reduced treatment
charges in 2021. EBITDA increased to $18.2 million for the 9 months 2021 (Global Atomic share
- $8.9 million) compared with $5.9 million in 2020 (Global Atomic share - $2.9 million).
The cash balance of the Turkish Zinc JV was US $4.0 million at September 30, 2021.
Total debt was reduced to US $12.65 million in 2021 from US $21.8 million at the end of 2020. At
September 30, 2021, the Befesa loan totaled US $5.65 million (December 31, 2020 – US $13.6
million) which bears interest at Libor + 4.0% with no fix ed maturity date. As at September 30,
Three months ended September 30, Nine months ended September 30,
2021 2020 2021 2020
100% 100% 100% 100%
Net sales revenues 12,694,730$ 5,555,087$ 34,901,981$ 22,649,656$
Cost of sales 6,252,229 3,681,069 17,518,999 18,111,776
Foreign exchange loss (gain) 27,879 (611,932) (789,346) (1,367,023)
EBITDA(1)
6,414,623$ 2,485,950$ 18,172,328$ 5,904,903$
Management fees & sales commissions 461,697 294,929 1,688,371 1,202,901
Depreciation 630,438 802,560 1,974,306 2,412,597
Interest expense 170,015 457,675 640,972 1,370,798
Foreign exchange loss on debt 56,059 4,415,934 3,290,991 8,670,782
Other expense (income - (49,097) - (49,097)
Deferred tax expense 740,770 (610,882) 2,529,021 (1,603,879)
Net income 4,355,644$ (2,825,169)$ 8,048,666$ (6,099,199)$
Global Atomic's equity share 2,134,266$ (1,384,333)$ 3,943,846$ (2,988,608)$
Global Atomic's share of EBITDA 3,143,165$ 1,218,116$ 8,904,441$ 2,893,402$
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2021, Global Atomic’s share of the Befesa loan was US $2.77 million. The local Turkish revolving
credit facility balance was US $7.0 million at September 30, 2021 (December 31, 2020 - US $8.2
million) and bears interest at 3.18%. It is expected that the Befesa loan will be paid out by the end
of 2021. The Turkish revolving credit facility can be rolled forward. Once the Befesa loan has been
repaid, dividend payments to the Company will resume.
QP Statement
The scientific and technical disclosures in this news release have been reviewed and approved
by Ronald S. Halas, P.Eng. and George A. Flach, P.Geo. who are “qualified persons” under
National Instrument 43- 101 – Standards of Disclosure for Mineral Properties.
About Global Atomic
Global Atomic Corporation (www.globalatomiccorp.com) is a publicly listed company that
provides a unique combination of high- grade uranium mine development and cash- flowing zinc
concentrate production.
The Company’s Uranium Division includes four deposits with the flagship project being the large,
highgrade Dasa Project, discovered in 2010 by Global Atomic geologists through grassroots field
exploration. With the issuance of the Dasa Mining Permit and an Environmental Compliance
Certificate by the Republic of Niger, the Dasa Project is fully permitted for commercial production.
Final design in support of the Company’s Feasibility Study is ongoing.
Global Atomics’ Base Metals Division holds a 49% interest in the Befesa Silvermet Turkey, S.L.
(“BST”) Joint Venture, which operates a modern zinc production plant, located in Iskenderun,
Turkey. The plant recovers zinc from Electric Arc Furnace Dust (“EAFD”) to produce 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 Frankfurt 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, with approximately 50% of the European EAFD market and facilities located
throughout Europe, Asia and the United States of America.
Key contacts:
Stephen G. Roman
Chairman, President and CEO
Tel: +1 (416) 368-3949
Email: [email protected]
Bob Tait
VP Investor Relations
Tel: +1 (416) 558-3858
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 Atomics’ development potential and timetable of its operations, development and exploration assets; Global Atomics’ ability to raise additional funds necessary; the future price of uranium;
the estimation of mineral reserves and resources; conclusions of economic evaluation; the realization of mineral reserve estimates; the timing and amount of estimated future production, development and
exploration; cost of future activities; capital and operating expenditures; success of exploration activities; mining or processing issues; 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”, “is expected”, “estimates”, variations of such words and
phrases or statements that certain actions, events or results “could”, “would”, “might”, “will be taken”, “will begin”, “will include”, “are expected”, “occur” or “be achieved”. All information contained in this
news release, other than statements of current or historical fact, is forward -looking information. Statements of forward -looking information are subject to known and unknown risks, 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 at the date such statements are made. Although management of Global Atomic has attempted to identify important factors
that could cause actual results to be materially different from those 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 sho uld not place undue
reliance upon forward-looking statements. Global Atomic does not undertake to update any forward-looking statements, except in accordance with applicable securities law. Readers should also review the risks
and uncertainties sections of Global Atomics’ annual and interim MD&As.
The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy and accuracy of this news release.