Global Atomic (GLO) - $12.5M Raise to Complete Feasibility Study

April 12 2021, 13:18 GMT+01:00

Global Atomic

  • TSE: GLO
  • Shares Outstanding: 160.3M
  • Share price C$2.65 (30.03.2021)
  • Market Cap: C$425M

It seems like only yesterday that we started talking to a CAD$0.40 'want to be' uranium producer. And now look at them.

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.

Global Atomic has a unique business model of two complementary businesses to create value and limit dilution. The Dasa Uranium project in the Republic of Niger is a stand alone, high grade, high margin, underground operation which is in Phase 1 of the Dasa Mine plan. The Zinc recovery project in Turkey is processing electric arc furnace dust to produce Zinc Oxide. The Zinc project is providing stable cash-flow whilst Global Atomic brings Uranium to the market.

We spoke recently with Stephan Roman, Chairman, President and CEO, at Global Atomic, a Canadian resource company engaged principally in uranium and zinc businesses. He spoke about recent news of interest for the investing community.

Company Overview

Global Atomic has a 100% interest in the Dasa uranium project in Niger, first discovered by the company’s geologists in 2010. In addition, the company has a 49% stake in the zinc concentrate produced in Iskenderun, Turkey, with a joint venture with BST (Befesa Silvermet Turkey, S.L.). Global Atomic is listed on the Toronto Stock Exchange under the ticker GLO.Global Atomic (GLO) - $12.5M Raise to Complete Feasibility Study

Uranium’s Had a Nice Price Run

We started out conversing about the nice move in price that uranium has had of late. Roman agreed, and indicated that this bodes well for Global’s uranium business: “Finally, with a turn in the Uranium market, it looks like there's some investors thinking that perhaps we have a good Uranium project, as well. So, I think if you look at our project and compare it with others, and the value of a pound in the ground, and how that's viewed with other companies, we are still undervalued”.

Raman indicated Global’s current stock price reflects uranium valued at $1 to $1.50 per pound in the ground. He points out that other uranium companies with projects in less advanced stages have stock prices that imply their in-ground ore at $3 to $5, so he’s quite bullish on the upside for Global Atomic on that basis alone. We pointed out to him that we recently saw a Cormark report that indicated that they are using a “chunky” $8 for the metal in the ground.

Uranium Financing and Production At Dasa Coming On

Roman says his company is not going to be buying pounds at high prices. He already has a nice asset at Dasa: “We have a 250Mlbs deposit right now with a very high-grade and low operating costs so for us”. The pre-feasibility study is complete. Roman expects to complete the definitive feasibility study by Q3/21.

Roman indicated that the company is moving ahead operationally in the field, and that heavy machinery is working on the ground now, setting up the pits, the town site and other infrastructure. He reports that building out the town site and the mine infrastructure should be completed by Q1/22.

Global Atomic (GLO) - $12.5M Raise to Complete Feasibility Study

It was no a big deal to raise money for all this work, according to Roman. They were able to raise $12.5M in just 1 day, with share offerings of $2. This was better than their first capital raising exercise, in which shares went for $0.60 each. Their capital-raising success, he said, reflects shareholder’s belief in the project as well as the rebound in the price of uranium.

The nearby infrastructure landscape is changing as well. Cominak, the Niger National Uranium Company, is closing down. There is a potential to get in on some unused infrastructure. Roman replied that they have a MOU with Orano to truck ore from Dasa to the nearby Somair plant for processing. This is being evaluated, according to Roman, as a value opportunity, and that Global still plans on developing Dasa as a stand-alone facility.Global Atomic (GLO) - $12.5M Raise to Complete Feasibility Study

The Turkish Zinc Business: How it’s Moving Forward      

The situation in Turkey is different because the asset there is in production and is already cash flowing. Zinc is going for about $1.30/lb as of March, 2021. Roman says that they are “running at capacity in Turkey”. This is a valuable stream and may potentially be used to structure additional financing, said the CEO.

We asked Roman about Turkey’s geopolitical situation and how that has affected his zinc business. He answered: “Well, right now, of course, it hasn't affected our business at all. So, you know, we're running very well there. Of course, all of our local costs are in Turkish Lira. We get paid in US dollars, because all of our concentrates are shipped out of Turkey to Europe.” Furthermore, the operation is making money: “We expect to have all the Capex, effectively the money we spent on the new plant paid out this year. Then dividends will start flowing to the company. Currently, we get the management fees and sales commissions every month”.Global Atomic (GLO) - $12.5M Raise to Complete Feasibility Study

Utilities are Showing Interest

We asked Roman about his firm’s business vis-à-vis utilities. He responded that “We are talking to utilities right now and utilities are interested in Global Atomic right now”. These conversations make him believe that the utilities are looking for some new entrants into the market. With regard to Dasa he continued: “We also feel that if we can sign some off-take agreements with a number of utilities, obviously, just as you mentioned, you're going to get much better financing terms and money will be more available because you'll obviously have sales right off the bat. So you know, we were not going to build the project unless we have sales, so right now it's a prime, I would say an incentive for us is to get out there and educate the buyers on the project and get some sales locked in”.Global Atomic (GLO) - $12.5M Raise to Complete Feasibility Study

Competitor Discussion

As the price of uranium has risen, so have the fortunes of some of Global Atomic’s competitors. But he thinks that many companies have a much higher break-even price than he has. As far as Roman is concerned: “ We don't need a higher price, we're moving ahead”. Additionally, he said, that Global Atomic already has the Mining Licence in place, and most companies do not.

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

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