Global Atomic (GLO) - Uranium Junior Priming for Production

It’s been a big year for Global Atomic. Their zinc plant in Turkey is running at capacity and zinc prices are the highest they have been in recent years. In addition, their flagship uranium project, the Dasa uranium project in Niger, is showing leading economics and perfect timing.

Global Atomic submitted the PEA for the Dasa project in May of 2020. They also completed the development plan, environmental impact statement and hydrogeology study earlier this year. They’re currently awaiting a mining permit from the Niger government before they can move into the next phase.

We spoke to Stephen Roman, Chairman, President & CEO of Global Atomic Corp., having previously caught up with them in July of this year.

Uranium Deposits

Uranium is used to power nuclear reactors because of its ability to reach and sustain nuclear fission. Nuclear fission is the reaction that occurs when the nucleus of an atom splits into two or more smaller nuclei. This reaction releases a very large amount of energy, which is used to generate electricity at nuclear-powered power plants. Uranium atoms are easily split apart, making the metal ideal for nuclear reactor fuel.

Like other critical metals, uranium has to be mined from somewhere. Kazakhstan is the largest uranium producer, accounting for 42% of global production (22,808 tonnes) in 2019. Canada (6,938 tonnes) and Australia (6,613 tonnes) contributed 12% and 13%, respectively. 2019 uranium production from Niger was 2,983 tonnes, with plenty more resources left in the ground. Economic uranium deposits primarily occur in two forms: unconformity-related and sandstone-hosted. Each deposit style accounts for about one-third of the world’s economic uranium resources. The remaining uranium deposits occur in a variety of styles, including intrusive, volcanic, conglomerate pebble, collapse breccia pipe and many more.

An unconformity is a surface separating two layers of rock that represents a gap in time–that is, a time period where no rock was deposited or all rock was eroded away. These deposits are usually found in sedimentary basins that formed on top of ancient metamorphic basement rocks. Groundwater circulating in the basin concentrates and deposits the uranium, which comes from deposits in the basement rock or sedimentary basin deposits. Some well-known uranium unconformity deposits are the Athabasca Basin in Canada and the Kombolgie Basin in Australia. 

The Dasa project in Niger is a high-grade sandstone-related deposit. Uranium is found in medium to coarse-grained sandstone layers that are often interbedded with layers of shale. These impermeable shale layers are often immediately above and below the sandstone layers, allowing uranium-rich fluids to circulate freely within the sandstone. Concentrations of organic matter, sulfides or hydrocarbons create the reducing conditions necessary for uranium deposits to form. This organic matter formed from land plants, which first appeared about 450 million years ago. Sandstone uranium deposits are mainly found in rocks around this age. Uranium mineralization occurs in the form of carnotite, uranophane and uranium-rich titanite. Resources are measured in terms of U3O8. 

After uranium is mined, the raw material is processed to form yellowcake. The rock extracted from the mine is crushed and ground at a mill, in order to liberate the uranium particles. The crushed material is then leached in tanks with sulfuric acid to dissolve the uranium oxides. Uranium is precipitated out of this solution and dried to form yellowcake, a solid concentrate of yellow uranium oxide granules. After further processing, yellowcake becomes enriched uranium that is suitable for use in nuclear reactors. The resulting material is converted to uranium dioxide powder and compressed to form hard ceramic pellets. These pellets make up the fuel rods in the core of nuclear reactors.

Uranium Market and Outlook 

Uranium is a hot commodity right now. Nuclear energy, powered by uranium, is growing in popularity as a clean energy source. The United States has the most nuclear reactors and is moving towards using nuclear energy as a baseload power source. Numerous nuclear reactors are under construction around the world, including a 1,400 megawatt reactor recently commissioned by the United Arab Emirates. An additional 55 nuclear reactors are currently under construction, with another 40 expected to be completed by the end of the decade. Advanced Small Modular Reactors (SMRs) are emerging as an alternative to traditional nuclear reactors. SMRs are cheaper to build and operate, requiring less capital investment. They have a small footprint, so they can be built in communities that are inaccessible to traditional nuclear reactors.

The majority of the world’s uranium supply comes from three countries: Kazakhstan, Canada and Australia. The majority of global uranium production in 2019 came from Kazakhstan, Canada and Australia. Namibia, Uzbekistan, Niger, Russia and China contribute to the global uranium supply as well. However, as demand for nuclear power grows, the excess supply of uranium in the market is starting to dwindle. Mining companies are seeking out new uranium resources and utilities companies are getting in on the action. Utilities companies are beginning to realize that they need to stockpile resources and have started working directly with mining companies to ensure a steady, long-term supply of uranium. 

Dasa Uranium Project

Africa has proven to be a good place to do mining business. Niger has a long track record of being favorable to the mining industry. Progress towards getting a mining permit has been slowed down while Niger prepares for its general election at the end of December. Fortunately, both the incumbent and opposing parties are keen to see the Dasa project move forward. Another bonus to working in Niger is that the COVID pandemic has hardly affected mining operations. Global Atomic’s consultants have been able to visit the mine site to lay our plans for the mill, the tailings and the portal. They’ve also been able to work with local contractors who have more than 50 years of experience building mining infrastructure. 

While they wait for mining permits, Global Atomic has done some tests at the Dasa area. They drilled off the flank zone, using the cash flow from their zinc project in Turkey. They are using the recovered ore to run a pilot plant for uranium ore processing. The pilot plant is a three phase approach, where each phase will improve upon the previous. Global Atomic is working with a facility in Canada, called Process Research Ore Tech. The research facility is very experienced in uranium extraction, metallurgy and developing flowsheets. Global Atomic is currently using a flowsheet similar to nearby Cominak Mine, owned by Orano. The pilot has been successful thus far, showing clean metallurgy, good recoveries and low acid consumption. Global Atomic will continue optimizing the flowsheet but overall it shows a very viable project. 

The Estafor Drill rig - Global Atomic Dec. '20

Global Atomic is also carrying out geotechnical drilling. Geotechnical drilling is required to finalize the mine plan. The rock mechanic consults will use the geotechnical drilling results to locate the mine portal and complete the mine design and layout. This data will be compiled with the plant’s final engineering flowsheet and additional drill and assay results. The goal is to complete a Bankable Feasibility Study (BFS) by mid-2021. 

The next step is for Global Atomic to get project financing, which they’ve thought out quite carefully. They are taking a staged approach to minimize CapEx requirements. Global Atomic has a 49% stake in the Befesa Silvermet Joint Venture in Turkey. This operation produces zinc via recovery from metallurgic waste. The plant is running at capacity and Global Atomic plans to use the payout from this project to help fund the Dasa project. This plan is promising, given the increase in zinc prices from USD$0.80c to $1.26/lbs. 

In addition to cash flow from the Befesa zinc project, Global Atomic has the potential to work with neighboring mines in Niger to generate cash. French nuclear company Orano has two subsidiaries, Cominak and Somaïr, operating uranium mines in Arlit, Niger, 105 km north of the Dasa project. In 2017, Global Atomic and Orano signed a MOU regarding direct shipment of Dasa uranium ore to the Somaïr mill. Local contractors have more than 50 years of experience working with uranium and are interested in working with Global Atomic, as the Somaïr mine will close in early 2021 due to depletion reserves. This sales agreement has the potential to expedite the project, allowing Global Atomic to start Dasa mining operations without building their own mill. They intend to have an integrated mine and plant operation, once they have enough cash to build the mill. CEO Stephen Roman estimates they’ll reach this stage in 12 to 24 months based on current uranium prices. 

An integrated project will provide the most return for shareholders, but Global Atomic is wisely taking a staged approach to development. Uranium pricing for contracts with utilities companies is still up in the air. Global Atomic has done base case modeling at USD$35/lbs, with sensitives from USD$25/lbs to USD$50/lbs. Uranium is projected to be around USD$40/lbs in 2024 when Global Atomic should be in production. If everything proceeds according to schedule, they should begin construction at Dasa by Q1 of 2022 and will be shipping yellowcake to Orano by mid-2023. If prices remain at USD$40/lbs as expected, the project will be very exciting from a profitability standpoint.

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