Global Atomic (GLO) - 12x Bagger Uranium Junior Closest to Production
Global Atomic aims to start uranium production at the Tier 1 Dasa deposit, in Niger. In addition, Global Atomic has a 49% stake in the BST steel dust recycling operation in Turkey that produces zinc concentrate and provides financial leverage to minimise equity dilution. Global Atomic owns 100% of the Dasa project in Niger, a major uranium deposit first discovered by Company geologists in 2010. A new PEA announced in April 2020 comprises an optimized Phase 1 of a larger mine development at the Dasa project.
We caught up with Stephen Roman, Chairman, President & CEO of Global Atomic Corp after a great couple of years for the company where the share price has gone up from $0.25 to $3 per share. We talked about their ability to pick up staff and equipment from the COMINAK project which is being wound down. We also looked at the market as a whole and the way that they are being valued and also what is going on in Turkey with regard to the contribution from the Zinc revenues.
$3/Share, Who Could've Imagined it?
When we started talking a couple of years ago, the Global Atomic was at $0.25c, and since then they have made tremendous progress, both on the Zinc side with the new plant up and running and now with Uranium and the Dasa project. It's been a very successful past couple of years for the company as their share price has now reached $3.
This increase in share price doesn’t come as a surprise to the company as they have made great progress both on the Zinc side with the new plant and with the Dasa Uranium project. They have the largest, highest grade Uranium project in Africa and have moved through the permitting process in a record 3 month timescale.
Company Overview: The Journey & The Benefits of Mining in Niger
Niger has extensive experience in mining Uranium and has opened up its doors to new investment opportunities. There is a good knowledge base of Uranium mining and it is a big source of revenue for the country. The older projects like COMINAK, which have been in operation for 50 years are now reaching the end of their mine life and as they close their doors, the Dasa project can benefit as it has access to the experienced workforce on their doorstep.
Perfect Timing: Differentiation & Competition
Global Atomic will save time, money and training by employing this available workforce and there is also equipment available too. The Feasibility study will be released at the end Q3, 2021 to include final engineering and will show improvements in capex and opex due to the use of equipment, workforce and expertise from existing projects in Niger. A big drill programme is planned to start in September 2021 and they aim to be ready to go in Q1, 2022 with the most advanced Uranium story in Africa.
Eventually, Global Atomic aims to have a green mine and would like to turn the operation into an electric operation using solar, etc. They have doubled the size of their camp and are gearing up for their programme of drilling. The flank zone is their initial mining area which comes close to the surface but it's only 18-20% of the deposit. The idea with the drilling is to do a little more extension around the flanks as they know it extends on strike and close to the surface so they plan to extend the life of that area. They are keen to move all the inferred to measured and indicated with infill drilling which will have a huge impact on the IRR and NPV because then the entire deposit is incorporated in the economics.
A lot of Uranium companies based in the Athabasca area have valuations of USD$1Bn+ and they are not near production, and not near cashflow revenues and still have the permitting process to go through. The valuations in North America seem to be much more excessive compared to some of the African stories, and Global Atomic is the most advanced African story in terms of getting into cash flow. The permitting regime in Canada is much slower than in Africa, whereas for Global Atomic it took 3 months to get their permit from the time they submitted their permit application. Africa is the place to mine Uranium, and particularly in the Sahara Desert where there's nobody around, as there is no need to move people. The infrastructure is already in situ in Niger because there has been mining there for 50-years. Global Atomic has power lines, water, roads, and towns close enough to bring the labour force in.
Forecasts for Production
The production forecast is to be mining 1,000t/day, about 4.5Mlbs/year, and it is a scalable project. If the Uranium price moves higher and there is a booming Uranium market, they can ramp it up to 1,500t-2,000t/day and double the output.
Valuation of Zinc & Uranium
The Zinc element of Global Atomic is worth potentially USD$200M of the $500M market cap which is from analysis by Cormark Securities in Canada. The new Zinc plant was built in 2019 and it's now running at full capacity having had an excellent quarter. Global Atomic plans to have the project paid out this year and the cash will then start coming back to be employed at the Dasa project.
Focus & Financials: What's Next for Global Atomic?
Global Atomic is good for cash at the moment and their big focus now is to get the Feasibility study completed, start building the project and move towards production.
Changes to the Team: Who Came On-Board & Why?
Dean Chambers has recently come on board as an engineer, and is going to be chair of the audit committee and will also be involved in the project financing initiative. The end game is to have the plant up and running by 2024 and the company is talking to utilities right now about buying Uranium, starting 2025.
Discussions with Utilities & Mood at Market
At this point in time, the utilities are sitting on the fence and haven't made the big decision to start moving into the market which is why the Uranium price is sitting at around $30. They are definitely interested and are thinking about it but sometimes it takes a bit of pressure to get them to move. Sprott Securities are now starting a Uranium fund and are going to be soaking up spot and there are 2-3 others doing the same thing so people know that there's going to be a big movement in price.
Things are starting to happen with environmentalists and various other people now buying into nuclear. We may be getting into a renaissance of nuclear energy that's going to last much longer than previous cycles in Uranium. With an asset that can run for 50-years, Global Atomic is looking to make a lot of money for their shareholders.
To find out more, go to Global Atomic's Website.