Global Atomic Announces 2023 Results and publishes Dasa Uranium Project Feasibility Study Dasa Uranium Project Remains on Schedule to Produce Yellowcake in Q1 2026
NEWS RELEASE
Global Atomic Announces 2023 Results and publishes Dasa Uranium Project Feasibility Study
Dasa Uranium Project Remains on Schedule to Produce Yellowcake in Q1 2026
Toronto, ON, March 27, 2024: Global Atomic Corporation (“Global Atomic” or the “Company”), (TSX: GLO, OTCQX: GLATF, FRANKFURT: G12) announced today its operating and financial results for the year ended December 31, 2023.
HIGHLIGHTS
Dasa Uranium Project - Mineral Resource Estimate
� On May 23, 2023, the Company announced the completion of an updated Mineral Resource Estimate (“MRE”) for the Dasa Project. The MRE includes the results of a 16,000-meter drill program that was designed to convert Inferred Resources to Indicated Resources and resulted in a 50% increase in Indicated Resources at a 1,500-ppm cut-off grade.
Dasa Uranium Project - Off-take Agreements
� In 2023, the Company formalized three off-take agreements with major North American utilities for the delivery of 1.4 million pounds U3O8 per year for the first five years of mining.
These off-take agreements represent a small percentage of the current 68.1 million pounds of production in the new 23.75-year Mine Plan and provide the Company with the ability to repay the debt financing facility, while maintaining leverage to a tightening uranium market.
Dasa Uranium Project - Mining
� Ramp development has been underway since the beginning of 2023, with over 950 meters completed. Mine development is now continuing down dip in the footwall of the orebody.
� In August 2023, the closure of the Benin border interrupted the usual supply route from the Port of Cotonou through Benin to Niger. The Company suspended mine development due to interruptions of its supply chain and depletion of certain consumables until the Company established an alternate shipping route through Togo and Burkina Faso. Using this alternate route, underground mine development resumed in December 2023.
� As of the date hereof, the Dasa Mine, operated by SOMIDA, and overseen by Global Atomic Corporation, achieved 595 days without a Lost Time Injury (“LTI”). This achievement is a testament to management’s dedication to create a safe work environment and the team’s success in implementing effective safety measures.
Dasa Uranium Project – Financing
� The Company is engaged with a Canadian export credit agency and a U.S. development bank to establish a debt facility to finance 60% of Dasa’s development costs. The Company has been advised by this banking syndicate that Credit Committee approval may occur in April 2024, followed by final approval by the Board of Directors in June 2024.
� Management continues to work towards the completion of this debt facility, however, the Company is also involved in discussions with other funding entities and will continue to evaluate alternative funding options that support a financing decision in the best interests of shareholders.
Dasa Uranium Project –Team
� In 2023, the Company added two key members to the Dasa management team: John Wheeler, Director of Operations and Site General Manager and Daniele Valentino, Deputy Director of Operations & Assistant General Manager. Both individuals have substantial West African mining experience and we welcome them to the SOMIDA operating team.
Niger Political Situation
� On February 14, 2023, the Company announced that a local court in Agadez, Niger, had issued orders against the Government of Niger and the Company’s subsidiary in Niger, SOMIDA, in response to historical concerns raised by certain local organizations. On February 24, 2023, the ruling was overturned and annulled as having no merit. SOMIDA continued mine development operations throughout the court proceedings.
� On July 26, 2023, the Niger military initiated a change in government. The new Government of Niger subsequently confirmed its support of the Dasa Project and encouraged SOMIDA to proceed on schedule. The Economic Community of African States (“ECOWAS”) imposed wide-ranging sanctions on Niger, which were subsequently removed in early 2024. The Niger- Benin border is the only border that remains closed, however is expected to open soon. � On October 10, 2023, the United States formally recognized the events of July 26, 2023, as a “Coup d’Etat”, which temporarily halted the U.S. Development Bank’s work on their debt financing facility for the Dasa development.
� In November 2023, the U.S. Senate voted overwhelmingly to support continued U.S. military presence in Niger. The U.S. Under Secretary for African Affairs stated that the U.S. stands ready to support Niger in a successful transition to democratic rule and the U.S. Development Bank resumed its work on the debt facility for Dasa.
Turkish Zinc Joint Venture
� Operations were impacted by major earthquakes which occurred in Türkiye during Q1 2023. Local steel mills, which supply the Turkish Zinc Joint Venture (“BST” or the “Turkish JV”) with Electric Arc Furnace Dust (“EAFD”), ceased operations for a period of time before resuming operations.
� The Turkish JV processed over 66,000 tonnes EAFD to produce 27.2 million pounds of zinc in concentrate at an average realized price of US$1.20/lb.
� The Company’s share of the Turkish JV EBITDA was a loss of $2.4 million in 2023 (a gain of $4.2 million in 2022).
� The revolving credit facility of the Turkish JV was US$12 million at the end of 2023 (Global Atomic share – US$5.9 million).
� The cash balance of the Turkish JV was US$1.9 million at the end of 2023.
Corporate
� On March 17, 2023, the Company completed a Bought Deal Prospectus Offering of 18,666,667 Units at a price of $3.00 per Unit for gross proceeds of approximately $56 million. Each Unit comprised one common share and one-half warrant exercisable at $4.00 per common share for a period of 18-months from closing.
� On November 21, 2023, the Company filed a Short Form Prospectus for up to $350 million which amount includes up to $50 million that may be raised under an At-the-Market (“ATM”) equity program as per the supplemental prospectus filed December 6, 2023, over the ensuing 25-month period.
� On December 22, 2023, the Company completed a private placement of 9,000,000 Units at a price of $2.50 per Unit for gross proceeds of $15 million. Units comprised one common share and one-half common share purchase warrant. Each full warrant could be exercisable at $3.00 per share for a period of 12 months from closing subject to accelerated expiry should the price of the common shares exceed a volume weighted average price (“VWAP”) of $3.50 for 5 consecutive trading days. The acceleration clause was activated in January 2024 and all warrants exercised for gross proceeds of $9 million.
� Global Atomic continues to receive quarterly management fees and monthly sales commissions from the Turkish JV ($690,000 in 2023 compared to $1,149,000 in 2022), helping to offset corporate overhead costs.
� Cash balance as of December 31, 2023, was $24.9 million.
Subsequent Events
� In January 2024, the Niger Government suspended the approval of new and/or renewed mineral exploration permits, including renewals recently received by the Company. This suspension was initiated to conduct an audit of recently issued exploration permits and related to undisclosed gold shipments. This announcement had no impact on the mining permits or operations at the Dasa Project and the Company expects its exploration permits to be renewed shortly.
� On March 5, 2024, the Company released the results of its Dasa Uranium Project 2024 Feasibility Study (“FS”) as an update to its 2021 Phase 1 Feasibility Study which confirmed an extension of the Mine Plan from 12 years to 23.75 years (2026-2049), a 50% increase in Mineral Reserves to 73 million pounds U3O8 and an increase in total production by 55% to 68.1 million pounds U3O8. Using an average uranium price of $75/lb U3O8, the FS shows an NPV8 of US$917 million, an IRR of 57% and a payback period of 2.2 years.
� On March 5, 2024, the Company announced that it had signed a Letter of Intent from a European nuclear power utility to purchase U3O8 from Dasa, representing its fourth off-take agreement for deliveries starting in 2026.
� On March 16, 2024, Niger announced its intention to terminate its military cooperation agreement with the United Sates. Global Atomic understands the two countries are in discussions to reach a mutually acceptable resolution.
� On March 27, 2024, the Company published the full Dasa Uranium Project Feasibility Study (“FS”), details of which are discussed in the “Uranium Business” section below. The FS is available at the Global Atomic web site and at www.sedarplus.ca.
Global Atomic President and CEO, Stephen G. Roman commented, “I congratulate the entire team at Global Atomic, including those at our Niger subsidiaries and those JV employees in Türkiye for their perseverance and dedication amidst many external challenges in 2023 both geopolitical and geophysical. I also thank our investors who maintained their support and confidence through these challenging times. The strategic nature of the Dasa deposit, the quality of our team, and the world need for clean, reliable, nuclear power are the fundamental drivers for our business.”
“We proved the impressive scope of Dasa early in 2023, when we published a revised Mineral Resource Estimate which converted Inferred Resources into 50% more Indicated Resources. We also delineated another 51.4 million pounds in the Inferred category that could eventually be brought into our next technical update. In early 2024, we announced a new Feasibility Study that extended the Dasa Mine Plan from 12 to 23 years, increased Mineral Reserves by 50% to 73 million pounds and uranium production by 55% to 68.1 million pounds. Using a conservative uranium base price of $75 per pound and very conservative cost assumptions that include several layers of contingencies, the Study forecasts a very attractive after-tax NPV and an impressive after-tax IRR.”
“The current roster of 275 employees at the Dasa Project, are continuing with underground and surface development to prepare for the processing plant erection planned to start later this year. The construction crews will begin arriving as the expanded camp is completed mid-year. I look forward to bringing further updates to shareholders as we continue to advance the Dasa Project to first Yellowcake production in Q1, 2026.”
OUTLOOK
Dasa Uranium Project
� Continue development of the underground ramp and site infrastructure to remain on schedule to supply uranium ore to the processing plant from the end of 2025.
� Addition of an in-country construction team, bringing the site complement from 275 to approximately 500.
� In Q2 2024, our Bank Syndicate is expected to approve the Debt Financing facility for the development of the Dasa Project.
� Complete final engineering, site development and civil works for the Dasa processing plant and begin installation of equipment.
� Continue marketing efforts to secure additional uranium off-take agreements.
Turkish Zinc Joint Venture
� The Company anticipates operations at its Turkish JV will be profitable in 2024 as local steel mills normalise production.
COMPARATIVE RESULTS
The following table summarizes comparative results of operations of the Company:
| Year ended December 31, 2023 2022 | |
| (all amounts in C$) | |
| Revenues General and administration Share of equity loss Other expense Finance income, net Foreign exchange loss | $ 6 89,996 $ 1,149,494 10,275,282 10,265,688 4,128,171 287,779 - 583,246 (1,159,471) (155,142) 4,032,344 2,666,330 |
| Net loss | $ ( 16,586,330) $ ( 12,498,407) |
Net income (loss) attributable to:
Shareholders of the Company (16,603,680) (12,475,109)
Non-controlling interests 17,350 (23,298)
| Other comprehensive income | $ 9 13,394 $ 9 01,107 |
| Comprehensive loss | $ ( 15,672,936) $ (11,597,300) |
Comprehensive gain (loss) attributable to:
Shareholders of the Company (15,670,449) (11,630,229)
Non-controlling interests (2,487) 32,929
| Basic and diluted net loss per share Basic weighted-average number of shares outstanding Diluted weighted-average number of shares outstanding | ($0.08) ($0.07) 198,082,525 177,647,065 198,082,525 177,647,065 |
| December 31, December 31, 2023 2022 | |
| Cash and cash equivalents $ 24,857,915 $ 8,400,008 Property, plant and equipment 129,986,343 82,234,716 Exploration & evaluation assets 1,370,358 1,115,983 Investment in joint venture 12,628,251 16,387,040 Other assets 8,755,878 2,118,258 | |
| Total assets $ 1 77,598,745 $ 110,256,005 | |
| Total liabilities $ 19,412,976 $ 8,746,681 | |
| Total equity $ 158,185,769 $ 1 01,509,324 |
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.
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. Revenues in 2023 have decreased due to lower zinc prices and 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.
Share of net earnings from joint venture represents Global Atomic’s equity share of net earnings from the Turkish Zinc JV.
Finance income includes interest earned from the short-term bank deposits. Finance income increased significantly in 2023, representing higher interest rates and higher cash balances on hand since the Company’s March 2023 equity raise.
Foreign exchange loss represents realized and unrealized exchange losses that arise from the translation of foreign currency denominated assets and liabilities to local currency. For the year ended December 31, 2023, devaluation of the United States dollar relative to the West African Franc (“CFA”) and Canadian dollar resulted in $4 million foreign exchange loss.
Uranium Business
Niger Mining Company
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 Agreement, 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.
Mineral Resources
Since 2011, GAFC’s exploration activities have been primarily focused on the Dasa deposit. In 2018, GAFC began a drill program at an area identified as the “Flank Zone” to assess the potential for near-surface high-grade mineralization, as well as testing strike extensions of the deeper mineralization at depth. The Company was successful with both programs. The drilling identified significant amounts of high-grade mineralization in the Flank Zone and in several new zones along strike and down dip. This information guided the location of the 16,000-meter infill drilling program in 2021 and 2022 when the Company drilled a further 28 diamond drill holes for a total of 16,368 meters, targeting areas of Inferred Resources, so they could be upgraded to the Indicated category. Using this new data, AMC Consultants, (“AMC”), was engaged to prepare an updated Mineral Resource Estimate (“2023 MRE”) which they reported on with an effective date of May 12, 2023.
Highlights from the 2023 MRE included a grade-tonnage report at varying cut-off grades and are summarized in the following table:
| Grade-Tonnage report, highlights from 2023 MRE | ||||||
|---|---|---|---|---|---|---|
| Cut-Off | Category | Tonnes | eU O 3 8 | Contained | ||
| Cut-Off | metal | |||||
| eU O , 3 8 | Mt | ppm | Mlb | |||
| ppm | ||||||
| 100 | Indicated | 103.6 | 803 | 183.5 | ||
| Inferred | 71.0 | 636 | 99.5 | |||
| 320 | Indicated | 44.9 | 1,602 | 158.5 | ||
| Inferred | 25.4 | 1,435 | 80.4 | |||
| 1,200 | Indicated | 12.6 | 4,201 | 117.1 | ||
| Inferred | 5.9 | 4,320 | 56.1 | |||
| 1,500 | Indicated | 10.1 | 4,926 | 109.6 | ||
| Inferred | 4.4 | 5,349 | 51.5 | |||
| 2,500 | Indicated | 5.7 | 7,258 | 91.0 | ||
| Inferred | 2.4 | 8,211 | 43.2 | |||
| 10,000 | Indicated | 0.9 | 22,185 | 43.5 | ||
| Inferred | 0.6 | 18,362 | 25.3 |
The 2023 MRE concluded on the following Mineral Resource Statement:
| Category | Tonnes | eU3O8 | Contained Uranium Metal | ||
|---|---|---|---|---|---|
| Mt | ppm | Mlb | |||
| Indicated | 10.1 | 4,913 | 109.3 | ||
| Inferred | 4.5 | 5,243 | 51.4 |
The following resource schematic shows the Indicated and Inferred resources as estimated in the MRE. Indicated Resources are shown in purple and Inferred Resources are shown in yellow.
Reserves
Following the updated MRE, the Company has updated the previous Phase 1 Feasibility Study. The updated Feasibility Study (“2024 Feasibility Study”) was reported with an effective date of February 28, 2024, and the full Feasibility Study was filed on SEDAR+ on March 27, 2024.
The 2024 Feasibility Study estimated the following Mineral Reserves.
| Mineral Reserve Category | RoM (Mt) | eU308 (ppm) | U308 (t) | U308 (Million lbs) |
|---|---|---|---|---|
| Proven Mineral Reserve | - | - | - | - |
| Probable Mineral Reserve | 8.05 | 4,113 | 33,097 | 73.0 |
Reserve Expansion
Enhancement of throughput and possible mill expansions will be investigated to improve and maintain the processing plant output. Achieving increased throughput will significantly lower the unit operating costs over time. Additional infill drilling is expected to upgrade Inferred Resources to the Indicated Resource category so these can be included in subsequent mine plans.
2024 Feasibility Study Results
2024 Feasibility Study on the Dasa deposit was completed using a uranium price of US$75/pound U3O8. Key economic and production statistics are as follows:
| Summary Project Metrics @ US$75/lb U3O8 | |||
|---|---|---|---|
| Project Economics (USD) | |||
| After-tax NPV (8% discount rate) | US$M | $917 | |
| After-tax IRR | % | 57% | |
| Cash flow (before capex & taxes) | US$M | $2,948 | |
| Undiscounted after-tax cash flow (net of capex) | US$M | $1,839 | |
| After-tax payback period from Jan 2024 | Years | 4.2 | |
| After-tax payback period from start-up | Years | 2.2 | |
| Unit Operating Costs | |||
| LOM average cash cost(1) | $/lb U3O8 | $30.73 | |
| AISC(2) | $/lb U3O8 | $35.70 | |
| Production Profile | |||
| Mine Life | Years | 23.75 | |
| Total tonnes of mineralized material processed | M Tonnes | 8.05 | |
| Mill processing rate | Tonnes/day | 1,000 | |
| Mill Head Grade | ppm | 4,113 | |
| Overall Mill Recovery (2) | % | 93.4% | |
| Total Lbs U3O8 processed | Mlbs | 73.0 | |
| Total Lbs U3O8 recovered | Mlbs | 68.1 | |
| Average annual Lbs U3O8 production (3) | Mlbs | 2.9 | |
| Peak annual Lbs U3O8 production | Mlbs | 4.9 |
(1) Cash costs include all mining, processing, site G&A, and royalty costs, as well as Niamey head office and other off-site costs. All-in sustaining costs (“AISC”) include cash costs plus capital expenditures forecast after the start of commercial production.
(2) Ramp up of the mill is assumed to take 11 months, during which recoveries increase. Once stable production levels have been achieved at the end of 11 months, the recovery rate stabilizes at 94.15%.
The economic analysis for the Study was done via a discounted cash flow (“DCF”) model based on the mining inventory from the 2024 Feasibility Study Mine Plan at a price of US$75 per pound of U3O8. Sensitivity analysis was carried out at price intervals from US$60 per pound to US$105 per pound, as shown in the table below. The DCF includes an assessment of the current tax regime and royalty requirements in Niger. Net present value (“NPV”) figures are calculated using a range of discount rates as shown. The discount rate used for the base-case analysis is 8% (“NPV8”). NPV has been calculated by discounting net cash flows to the start of operations, January 1, 2026, and deducting undiscounted remaining initial capital costs therefrom.
| Economic sensitivity with varying uranium prices (USD) | |||||
|---|---|---|---|---|---|
| Uranium price (per pound) | $60/lb | $75/lb | $90/lb | $105/lb | |
| Before-tax NPV @ 8% | $656 M | $1,122 M | $1,572 M | $2,022 M | |
| After-tax NPV @ 8% | $551 M | $917 M | $1,269 M | $1,621 M | |
| After-tax IRR | 38.2% | 57.0% | 74.8% | 92.9% |
The 2024 Feasibility Study is based on a plant throughput of 1,000 tonnes per day (t/d) or 365,000 tonnes per annum (t/a). The plant equipment has been designed for 1,200 t/d throughput but the 2024 Feasibility Study assumes plant availability of 86% (1,200 t/d x 86% = 1,032 t/d). The Arlit processing plants achieve 92% availability, by comparison. If SOMIDA has a similar experience, throughput would increase to about 1,104 t/d (1,200 t/d x 92% = 1,104 t/d). The plant layout has been optimised to enable the addition of more processing lines in the future. Much of the equipment has been over-sized by 20%, so minimal capital costs would be required to achieve throughput of 1,325 t/d (1,200 t/d x 1.2 x .92 = 1,325 t/d). Fixed mining, processing and site costs are significant, so increases in throughput would have a significant impact on reducing unit costs.
| Operating Cost(1) (USD) | LOM ($million) | $/lb U3O8 Recovered | $/tonne of Feed |
|---|---|---|---|
| Mining Cost | 620.2 | 9.10 | 77.08 |
| Processing Cost | 681.5 | 10.00 | 84.69 |
| G&A Cost | 443.7 | 6.51 | 55.15 |
| Cash Cost | 1,745.4 | 25.62 | 216.92 |
| Royalties | 348.1 | 5.11 | 43.26 |
| Total Cash Cost | 2,093.4 | 30.73 | 260.18 |
| Sustaining Capital | 338.6 | 4.97 | 42.11 |
| AISC(2) | 2,432.0 | 35.70 | 302.29 |
(1) Due to rounding, some columns may not total exactly as shown
(2) All-in sustaining cost per pound of U3O8 represents mining, processing and site G&A costs, royalty, off site costs and sustaining expenditures including closure costs, divided by payable 68.1 million pounds of U3O8
As shown below, the mining grades are higher in the initial years than later, however, further drilling to include high grade Inferred Resources is expected to smooth the grade profile. The current Mine Plan grade profile is shown below.
ORE MINED (TONNES & GRADE)
450 8,000 7,008 400 6,322 6,349 7,000
5,261 6,000 5,055 5,2185,038 4,9334,9064,846 4,0634,412 4,3804,387 5,000 250 3,518 4,000 3,101 3,2462,982 200 2,723 2,442 2,5692,4582,7382,590 2,751 2,259 3,000
2,000
50 1,000 0 0
Ore Mined Ore Grade: U3O8
Accordingly, ore processed will also vary in grade and impact cash cost in the various periods as follows:
| ` | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2026-32 | 2033-40 | 2041-49 | 2026-49 | |||||
| Years | 7 | 8 | 8.75 | 23.75 | ||||
| Ore processed (MT) | 2.5 | 2.9 | 2.7 | 8.0 | ||||
| Grade (ppm) | 5,538 | 4,274 | 2,668 | 4,113 | ||||
| U3O8 produced (Lbs M) | 27.6 | 25.4 | 15.2 | 68.1 | ||||
| Average Annual (Lbs M) | 3.9 | 3.2 | 1.7 | 2.9 | ||||
| Mining cost per pound | $5.77 | $8.84 | $15.61 | $9.10 | ||||
| Processing cost per pound | $7.66 | $9.35 | $15.37 | $10.00 | ||||
| G&A cost per pound | $5.26 | $6.08 | $9.52 | $6.51 | ||||
| Total cash cost per pound before royalties | $18.69 | $24.28 | $40.50 | $25.62 |
Capital costs for the production period were estimated as follows in the Feasibility Study:
| Capital Costs(1) (USD) | Initial Capital (2) ($million) | Sustaining Capital ($million) | Total ($million) |
|---|---|---|---|
| Mining | 58.8 | 218.7 | 277.5 |
| Processing | 83.2 | 38.9 | 122.1 |
| Infrastructure | 68.2 | 5.2 | 73.4 |
| Total Direct Capital Costs | 210.2 | 262.8 | 473 |
| Indirect & Owner's Cost | 60.9 | 30 | 90.9 |
| Total Direct and Indirect Capital Costs | 271.1 | 292.8 | 563.9 |
| Contingency (3) | 37.2 | 29.9 | 67.1 |
| Reclamation | 0 | 15.9 | 15.9 |
| Total Capital Costs | 308.3 | 338.6 | 646.9 |
(1) Due to rounding, some columns may not total exactly as shown.
(2) Initial capital is net of $67.2 million already spent to December 31, 2023, and before financing and corporate overhead charges
(3) The contingency provision included in the initial capital cost estimate includes $7.9 million for mining. The contingency provision for sustaining capital costs is $29.9 million relating entirely to mining.
Offtake Agreements
In 2023, the Company executed three uranium offtake agreements for sales to North American utilities. These agreements total between 6.9 and 8.4 million pounds U3O8 over 6 years beginning in 2026. The higher amount assumes the exercise of options available to the buyers. On March 5, 2024, the Company announced that it had received an LOI for the sale of uranium to a strategic European nuclear power utility for up to 780,000 pounds U3O8 over 3 years beginning in 2026. These offtake agreements provide the Company with the ability to repay project construction loans while maintaining leverage to a firming U3O8 price.