Global Atomic announced Q1/22 results and provided an update on its flagship Dasa uranium project in the Republic of Niger, and its zinc business in Turkey. EPS of neg. $0.026 was in line with our estimates of neg. $0.02/sh. While Q1/22 was slightly off for its zinc operations given the maintenance shutdown, higher zinc prices almost made up for the entire loss of sales as compared to last year and should fare well for the company moving forward. We also note that the focus of most investors remains on Dasa, which is quickly moving towards development. It was a very positive quarter for exploration, project financing, and other de-risking efforts. We believe Dasa is heading in the right direction as the project is being continuously improved and de-risked. With a commitment of up to US$75M from Export Development Canada, GLO is gaining its financial independence which it can use in its favour as it arranges off-takes and other development contracts needed to cover ~US$200M in Capex. Discussions continue surrounding Orano’s purchase of development ore as per its MOU, but meanwhile, we see mine development deferred until a reasonable offer is arranged. We also expect an updated Dasa resource and mine plan in June which should provide significant Phase 1 economic improvement.
Tag: Global Atomic Corp.
Global Atomic provided an update on project financing initiatives and drilling results from its 90%-owned, Dasa uranium project in the Republic of Niger. The company has received a letter of intent (LOI) from Export Development Canada (EDC) for potential participation of up to US$75M in the project financing. We view this news very positively as it further de-risks the development of Dasa, with project financing now expected to be completed by Q4/22. Dasa is Africa’s largest uranium project with high grades at ~0.7% U3O8. With box cut construction underway, we believe all eyes are on Dasa, which remains on track for commissioning in Q4/24.
Global Atomic (GLO) announced FY/21 results and provided an update on its flagship Dasa uranium project in the Republic of Niger, and its zinc business in Turkey. While the zinc prices are rising and that asset is making money, even at 70% capacity, we believe all eyes are on the Dasa uranium project where construction began earlier this year. Mine portal construction is due by April, with mine and plant slated for Q4/24 commissioning. Dasa is Africa’s largest uranium development project, and it is high grade at ~0.7% U3O8. Furthermore, rising prices may prove incredibly fruitful. Phase 1 FS contemplated an after-tax NPV8% of US$157M with 12-year mine life and IRR of 22.7% at US$35/lb U308. At near current uranium prices of ~US$60/lb, NPV increases to US$676M with an IRR of 57.2%.
This price increase is following a news article from Bloomberg yesterday speculating that the US might sanction Russian uranium supplier, which had previously been excluded from the Russian oil and gas import ban. UxC suggests that the article triggered a huge jump on Wednesday afternoon following its daily 2:30pm price cut-off. It appears that the response is mainly from traders bidding up the price.
Yesterday, Red Cloud hosted the first day of its three-day 2022 Very Pre-PDAC Mining Showcase, which featured 36 presenting uranium and battery metal companies including our keynote speakers Andrew Leyland, Head of Strategic Advisory at Benchmark Mineral Intelligence and Anna Bryndza, Executive Vice President at UxC, LLC and had over 1,000 participants registered in advance of the event. With this note, we want to provide a quick recap of the highlights from the conference for those who were unable to attend the live event. If you would like to attend Day Two and Three of Red Cloud’s 2022 Very Pre-PDAC Mining Showcase, register here. Replays are available on the Red Cloud website.
Uranium prices are up sharply on apparent Sprott Physical Uranium Trust (SPUT) buying as security of supply concerns emerge in light of economic sanctions levied against Russia in response to the Ukraine invasion. Funding of additional physical U3O8 purchases by SPUT may help propel prices above US$50/lb and perhaps close to incentive prices needed by project developers. We anticipate uranium equities to react very positively.
Global Atomic (GLO) provided an update on its flagship Dasa uranium project in the Republic of Niger, upcoming drill programs and its zinc business in Turkey. The development of Dasa is on schedule with the initial box cut blast, leading to mine portal construction by late April/22. Global Atomic is quickly moving towards potential production and could have development ore available for sale as it sinks the Flank zone underground development. In our view, given that the mine has amongst the highest grade in the world at ~0.7% U3O8, we see this project moving towards production regardless of minor spot price fluctuations. The mine is already funded, but the sale of development ore (500kt under MOU) could ultimately help finance process plant construction. We also do not see ore shipments to be a long-term solution, as the ore is too rich. Global Atomic’s goal is to build the US$150M plant quickly, which would reduce trucking costs, lower Opex, and provide the benefit of long-term contracts and allow GLO to control its own destiny.