Global Atomic (GLO) - 'Category of One' Uranium Developer

Global Atomic is a Canadian resource company advancing the large, high-grade Dasa uranium deposit in the Republic of Niger. In addition, Global Atomic benefits from the dividend stream generated by its share in the Befesa Silver-met zinc concentrate production facility in Turkey.

We caught up with Stephen Roman, Chairman, President & CEO of Global Atomic Corp following a successful year for the company in 2020. Global Atomic received the mining permit for the Dasa project on 23rd December which happened very quickly since they submitted the development plan and application in September.

2020 Review & Big Moments for Global Atomic

Looking back to 2020, the two big moments for Global Atomic, in terms of the share price appreciation and of the market's understanding of the company, were the PEA and the approval of the mining permit just before Christmas, just prior to the election.

They had a good indication when they submitted their development plan that they were high on the list to get their permit approved fairly quickly because the government wanted to get specific items done before the election.

Moving Forward: Plans, Process, & Timing

Global Atomic plans to do a Bankable Feasibility Study on the phase 1 flank zone at Dasa to allow them to get into production early and they are working very diligently on this, hoping for completion by Q3/21. The mining permit allows them to move things forward on that front and they are currently completing the geo-tech drilling to finalise their mine plan and they have the cash to do all of this. 

The pilot plant study is nearing completion where material has been shipped from the Dasa deposit to Canada and run through the pilot plant. The results will be coming out very soon and will be integrated into their Feasibility Study.  We anticipate plenty of news flow during the early part of 2021 as they complete these initiatives.

The Dasa project already has the mining permit approved and the engineering work is being completed so the biggest barrier to getting into production would be raising sufficient financing. The Uranium market needs some indication that Uranium prices are moving upwards then more financing will become available. The main goal for Global Atomic is to complete the Bankable Feasibility Study to get the numbers out to the market. The whole Dasa deposit is 250Mlbs and the flank zone is about 45Mlbs thereabouts which is 18% - 20% of the deposit.

Befesa Silvermet Zinc: Valuation, Upside, & Scaling Up

Zinc price is currently at CAD$1.28/lb which means that the Zinc operation in Turkey is worth about CAD$150M which is equates to most of the market cap. The Zinc operation provides monthly management and sales commissions, which covers a lot of overhead costs. An annual dividend is paid to the partners which is declared at the annual meeting every year, and paid in the march of each year. 

The Zinc operation is running at capacity at the moment and if the Zinc price stays where it is, it will bring $12M - $15M net to the company on an annual basis which is money that can support some debt to leverage the cash flow to build the Dasa mine. The Turkish Zinc operations are long-term, steady cash flow as the Steel industry has picked up in Turkey and there's a lot of waste to process. Global Atomic is a green company that cleans things up and produces no Carbon during the process.  

Dasa is a standout high grade Uranium project with big growth potential as Global Atomic has yet to explore all the strike extensions and down-dip extensions on the deposit. Now that the mining permit is approved, they can continue developing the asset once they start production to keep building the value of the asset. Several Uranium mines are shutting down due to ore exhaustion so the Uranium prices will start to increase as the supply becomes limited. Global Atomic is one of the only junior companies which will be ready to go into production and hit that price rise.

Global Atomic has just built a brand new plant at the Turkish operation in 2019 which has increased the size from 60,000t- 65,000t a year throughput to 110,000t-120,000t which is now big enough for their needs. They have made the plant much more efficient, much cleaner, and the highest tech available for this type of recycling plant. Now, their JV partner, Befesa, is building some plants in China and also has a number of plants in Europe and there are potentially other JV opportunities out there for Global Atomic to work with Befesa in the future.

The Uranium Market: Timing, Contracts, Price, & Funding

It's difficult to say when utilities are going to actually start to move on the Uranium but they have started talking to Uranium producers like Cameco, Kazatomprom, and also Global Atomic. 

Global Atomic has been approached by several utilities that want to do Uranium off-take agreements right now which is good news for securing finance for the project. The utilities need to know when Global Atomic can actually deliver and so the plan is to start earthworks in early 2022 to potentially start shipping ore from the mine to a nearby mill in 2023. If all goes according to plan, they would be producing ‘Yellow Cake’ towards Q3/24 with pricing on Uranium for 2024 expected up to +USD$40/lbs at that time. This is definitely an incentive price for Global Atomic who are looking to sign agreements at prices for 2 to 3 years time rather than today's price. 

Who Controls the Mill: Negotiating Terms

Global Atomic is currently in discussions with Orano, the mill owner, regarding the price and terms for the Uranium that’s contained in the ore plus a processing fee and are hoping to get some clarity on this in the next few months. The MOU they originally signed stated they would buy it at spot, but of course, spot is fluctuating. It also stipulated 100,000t a year would be shipped to them for 5-years. 

We look forward to hearing a lot more from Global Atomic in 2021 as they really are in a category of one. There’s no other Uranium junior that is positioned like Global Atomic with a large high-grade deposit that has just received its mining permit for Uranium production. And with a very meaningful +40 year annuity stream from its zinc JV.

To find out more, go to Global Atomic's Website. 

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