Global Atomic Announces Q3 2022 Results
NEWS RELEASE
Global Atomic Announces Q3 2022 Results
Toronto, ON, November 14, 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 nine months ended September 30, 2022.
HIGHLIGHTS
Dasa Uranium Project
In September, 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.
Excavation and ground support for the Box -Cut ramp access to the mine was completed,
setting the stage for underground development.
Site work in preparation for portal and ramp development included cons truction of employee
housing, warehouse and maintenance facilities, surface buildings for mining activities, power
and water servicing of the site.
Mining equipment and supplies continue to arrive at the Dasa site.
Dasa has built up a work force of approximately 150 individuals, drawn mostly from the local
population including both trained mine workers with years of experience in Niger and untrained
labourers who will be enrolled in training and apprenticeship programs.
On July 21, 2022, the Company announced it had engaged Enernet Global Inc. (“Enernet”) to
design an optimized hybrid power plant for the Dasa Project to include solar power and battery
storage. The plant will be built, owned, operated and maintained by Enernet and displace close
to 40% of carbon emissions.
On August 11, 2022, the Company’s Niger mining subsidiary, Société Minière de DASA S.A.
(“SOMIDA”) was incorporated.
On August 26, 2022, the Company engaged Development Consultants Private Limited
(“DCPL”) to complete basic and detailed engineering services required for the construction of
the Dasa processing plant.
On September 19, 2022, the Company engaged Lycopodium Minerals Canada Ltd.
(“Lycopodium”) to provide project management, procurement, project controls and project
execution plan services. Lycopodium’s engagement may be extended to include construction
services to build Dasa’s ore processing plant.
Underground development began on November 5th, 2022, with the Opening Blast Ceremony.
Mining will be conducted by a skilled Nigerien workforce under the guidance of Canadian
contractor CMAC-Thyssen who has provided training on new equipment now being utilized at
the Dasa Mine.
Subsequent to the end of Q3 on October 5, 2022, the Company announced that it had entered
into a Letter of Intent with a second major North American utility to purchase 2.4 million pounds
U3O8.
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Turkish Zinc Joint Venture
The Turkish Zinc Joint Venture (“BST” or the “Turkish JV”) plant processed 60,633 tonnes
EAFD for first nine months of 2022 (53,012 in 2021).
The Turkish JV applied IAS 29, Financial Reporting in Hyperinflationary Economies in Q3. A
$7.3 million gain which is the difference between the closing balance of shareholders' equity
of the Turkish JV at December 31, 2021 and the opening balance at January 1, 2022 is
recognized in equity.
Year-to-date 2022, the Turkish JV EBITDA was $8.6 million ($18.2 million in 2021) and for Q3
2022 was a negative $3.5 million ($6.4 million in 2021).
The negative EBITDA in Q3 results from a combination of the following:
o Zinc price adjustments on provisional sales prices reduced EBITDA by $3.0 million
o The application of Q3 exchange rates to Q1/Q2 results as required under IAS 29 reduced
EBITDA by $1.5 million
o A negative EBITDA adjustment of $0.9 million resulted from the 9 months catch up
adjustment due to inflation accounting under IAS 29
For the first nine months of 2022 and 2021, the zinc contained in concentrate shipments was
29.2 and 28.1 million pounds, respectively.
In the first nine months of 2022 the average zinc price was US$1.65/lb (US$1.31/lb in 2021).
The amount drawn on the revolving credit facility of the Turkish JV was US$6.8 million at the
end of Q3 2022 (Global Atomic share – US$3.3 million).
The cash balance of the Turkish JV was US$2.9 million as at September 30, 2022.
Corporate
In the first nine months of 2022, the Company received $8.9 million through the exercise of
outstanding warrants issued in March 2021.
Global Atomic continues to receive monthly management fees and sales commissions from
the Turkish JV ($209,000 in Q3 2022 compared to $224,000 in Q3 2021).
Cash balance at September 30, 2022, was $18.2 million.
President & CEO of Global Atomic, Stephen Roman, stat ed, “On November 5th I witnessed
remarkable support for the Dasa Mine at our Opening Blast Ceremony, with a turnout of over 800
local Nigeriens, including the Prime Minister of Niger, the Minister of Mines and many national
and regional dignitaries . The blast opened the Portal and commences the underground
development of the Dasa Mine. This is a significant milestone as it marks the beginning of the
realization of all the exploration, drilling, permitting, feasibility process, planning and construction
that the Global Atomic team has been working on diligently since we entered Niger in 2005.”
“Relating to our Turkish Joint Venture operations, we chose Q3 to make the IFRS mandated
adjustment on the perceived hyper -inflationary environment in Turkey. This resulted in a
significant increase in our equity value of the operation with a consequent loss incurred on the
opposite side of the ledger. Shareholders should focus on the 9- month results which show a
positive EBITDA margin despite the Turkish steel industry, which has not recovered from the
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effects of Covid and reduced demand. We maintain this is an essential service provided to the
Turkish steel mills and will continue to be so for decades into the future.”
OUTLOOK
Dasa Uranium Project
The Company is proceeding with an update to its Mineral Resource Estimate ("MRE").
Following the MRE update, an updated Mine Plan will be developed, and Dasa’s reserve
statement updated. It is expected that this will result in an increase in ore reserves and lower
operating costs.
Discussions with international electric utilities continue wit h the expectation that additional
long-term contracts for the sale of yellowcake will be concluded over the next months.
The project finance banking syndicate is completing its due diligence and a term sheet is
expected to be signed prior to year end, with final documentation to follow.
The Company is continuing discussions with Orano Mining relating to the direct shipment of
development ore to the Somaïr processing facility located 105 kilometers north of the Dasa
Project.
Permeability and porosity test results to determine in- situ leaching potential for the Isakanan
Project on the Adrar Emoles 4 permit are expected in Q4 2022, delayed due to backlogs at the
Canadian labs.
Turkish Zinc Joint Venture
The Turkish zinc plant continues to operate at target operating efficiencies.
The business outlook continues to be positive amid inflationary pressures and lower zinc
prices.
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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 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.”
(all amounts in C$) 2022 2021 2022 2021
Revenues 209,393$ 223,645$ 1,039,371$ 833,435$
General and administration 1,874,722 1,839,403 6,907,950 5,555,109
Share of equity loss (earnings) 2,201,074 (2,134,265) (328,227) (3,943,846)
Other (income) expense 387,999 (1,000) 979,634 (68,000)
Finance (income) expense (40,301) 7,709 (83,439) 18,310
Foreign exchange (gain) loss (2,456,458) 7,481 (2,389,045) 60,854
Net income (loss) (1,757,643)$ 504,317$ (4,047,502)$ (788,992)$
Net gain (loss) attributable to:
Shareholders of the Company (1,714,941) 504,317 (4,004,800) (788,992)
Non-controlling interests (42,702) - (42,702) -
Other comprehensive income (loss) 1,614,064$ 148,130$ (2,921,921)$ (3,738,763)$
Comprehensive income (loss) (143,579)$ 652,447$ (6,969,423)$ (4,527,755)$
Comprehensive income (loss) attributable to:
Shareholders of the Company (208,938) 652,447 (7,034,782) (4,527,755)
Non-controlling interests 65,359 - 65,359 -
Basic and diluted net loss per share ($0.01) $0.00 ($0.02) ($0.00)
Basic weighted-average
number of shares outstanding 178,178,390 162,330,717 176,709,774 160,449,845
Diluted weighted-average
number of shares outstanding 178,178,390 172,921,252 176,709,774 160,449,845
Septem ber 30, December 31,
2022 2021
Cash 18,243,116$ 34,179,449$
Property, plant and equipment 70,643,264 46,175,097
Exploration & evaluation assets 994,383 681,989
Investment in joint venture 16,537,956 8,981,986
Other assets 6,108,912 3,581,512
Total assets 112,527,631$ 93,600,033$
Total liabilities 7,314,511$ 2,895,756$
Shareholders' equity 105,213,120$ 90,704,277$
Three months ended September 30, Nine months ended September 30,
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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 2022.
Net gain (loss) attributable to Non- controlling interest represents 20% ownership of the
Republic of Niger in SOMIDA. $42 thousand loss is related to the exchange loss of SOMIDA
incurred during the period between the incorporation and the reporting date.
Other Comprehensive Income (loss) represents unrealized exchange gains (losses) that arise
from the translation of the balance sheets from functional currencies (US$, West African CFA
Franc and TRY) to the Canadian dollar presentation currency.
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 t he 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.
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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.
The Phase 1 Feasibility Study identified five zones of mineral reserves as shown in the following
schematic.
The mining inventory included in the Feasibility Study included a minor amount of Inferred
Resources shown as follows:
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The Zones vary in grades, with Zone 1 (Flank Zone) contributing the largest portion of the U 3O8
tonnes:
Reserve Expansion
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,
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 Q1 2023.
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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.
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 Agree ment, 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. 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.
Equipment and mining consumables have been procured and shipped to site.