Significant Milestones achieved at the Dasa
Uranium Project
-
Record Quarter
Production at the Turkish Zinc Joint Venture
TORONTO, May 6, 2021 /CNW/ - Global Atomic
Corporation ("Global Atomic" or the "Company"), (TSX: GLO) (OTCQX:
GLATF) (FSE: G12) announced today its operating and financial
results for the three months ended March 31,
2021.
HIGHLIGHTS
Dasa Uranium Project
- The Republic of Niger issued
an Environmental Certificate of Compliance to the Company in
January 2021.
- All permits are now in place for the development of the Dasa
Project and commercial production.
- The Republic of Niger issued
extensions for each of the six exploration permits held by the
Company through December 17,
2023.
- The Pilot Plant project to test and optimize the process flow
sheet launched in 2020 was successfully completed with results that
surpassed the May 2020 PEA and
feature higher uranium recoveries.
- An agreement was signed with Fuel Link Ltd. to develop a
uranium marketing strategy and assist with Yellowcake sales.
Turkish Zinc Joint Venture
- The Turkish JV shipped a record 14.85 million pounds of zinc in
concentrate during Q1 2021, up 43.5% from the 10.35 million pounds
shipped in Q1 2020.
- The Turkish JV processed a record 24,407 tonnes of Electric Arc
Furnace Dust ("EAFD") in Q1 2021, an increase of 32.5% from the
18,420 tonnes processed in Q1 2020.
- The Company's share of the Turkish Zinc Joint Venture ("Turkish
JV") EBITDA was $4.2 million in Q1
2021 compared with $0.8 million in Q1
2020, reflecting higher throughput and zinc prices.
- The Company's share of the Turkish JV Net Income for Q1 2021
was $1.5 million compared to a loss
of $1.2 million in Q1 2020.
- Cash balance for the Turkish JV at March
31, 2021 was US $4.0
million.
- The non-recourse Turkish JV debt owing to Befesa was reduced by
US $4.45 million in Q1
2021 leaving a balance of US $9.15 million outstanding (Global Atomic share –
US $4.48 million).
Corporate
- $2.4 million was received in
February as a result of the accelerated expiry and exercise of
warrants issued pursuant to the May
2020 private placement.
- The Company completed a Bought Deal private placement of
6,250,000 Units on March 16th at a
price of $2.00 per Unit for gross
proceeds of $12,500,000. Each Unit
comprised of one common share and one-half warrant exercisable at
$3.00 per common share over an
18-month period.
- Cash balance at March 31, 2021
was $14.5 million.
- 1,230,000 stock options exercisable at $2.67 per share for five years were granted to
Management.
Stephen G. Roman, President and
CEO commented, "2021 is a pivotal year for the advancement
of our Dasa Project in the Republic of Niger and for our Turkish Zinc Recycling JV in
Turkey. In the first quarter of 2021, we continued our
strong 2020 run of achieving key milestones for the Dasa Project
including the issuance of our Environmental Compliance
Certificate, better-than-expected results from our Pilot Plant test
program with average uranium recovery rates exceeding 94%
and, we initiated our marketing program with Fuel Link.
Our Turkish JV had a record quarter for both EAFD processed and
zinc concentrate shipped to smelters amid stronger zinc prices that
averaged US$1.25 per pound.
For the remainder of the year we look forward to completing
the Dasa Project Feasibility Study and advancing discussions
with nuclear power utilities to secure off-take agreements for a
portion of Phase I Yellowcake production. Successful
completion of these milestones will facilitate the arrangement of
project financing for the Dasa Project. In addition, assuming
the continuation of robust steel and zinc markets, we
should be in a position to retire our Befesa loan by year end with
dividends once again available to support our corporate
development and the Dasa Project."
OUTLOOK
Dasa Uranium Project
- Complete the Feasibility Study by the end of Q3.
- Arrange off-take agreements to sell a portion of Phase 1
Yellowcake production.
- 15,000 meter drill program begins Q4, to a) upgrade extensive
uranium resources on-strike of the Phase 1 Flank Zone and b)
potentially increase the overall uranium resources at Dasa with on
strike step-out drilling.
- Upgraded on-strike resources will enable design of the Phase 2
Mining Area with economics, adding to current Dasa Project
NPV/IRR.
- Break ground to begin mine construction early 2022.
- 2022 underground development to support direct ore
shipments.
- 2023 advance ramping and continue underground development,
begin plant construction.
- By the end of 2024 commission the plant and commence
commercial production.
Turkish Zinc Joint Venture
- The Turkish zinc plant continues to operate at target operating
efficiencies.
- Zinc prices staged a strong recovery in 2020, averaged
$1.25/lb in Q1 2021 and are
expected to remain strong through the balance of the
year.
- Steel production also staged a strong recovery and is expected
to remain strong through 2021 and 2022.
- Full repayment of the Befesa plant modernization loan is
anticipated by the end of 2021, subject to zinc prices and EAFD
availability.
- Turkish JV dividend payments will resume following repayment of
the non-recourse loan from Befesa.
- Global Atomic continues to receive monthly management fees and
sales commissions helping to offset corporate costs.
Summarized income statement and financial position information
is shown as follows:
|
|
|
3 Months Ended
March 31,
|
|
2021
|
2020
|
Revenues
|
$
|
443,163
|
$
|
224,197
|
|
|
|
General and
administration
|
2,011,533
|
552,826
|
Share of loss (net
earnings) from joint venture
|
(1,501,090)
|
1,241,202
|
Finance
expense
|
4,339
|
4,444
|
Foreign exchange
loss
|
(29,382)
|
(25,192)
|
Other
income
|
(35,000)
|
(30,000)
|
Net income
(loss)
|
$
|
(7,237)
|
$
|
(1,519,083)
|
Other comprehensive
income (loss)
|
$
|
(2,338,426)
|
$
|
1,573,485
|
Comprehensive income
(loss)
|
$
|
(2,345,663)
|
$
|
54,402
|
|
|
|
Basic net income
(loss) per share
|
($0.000)
|
($0.010)
|
Diluted net income
(loss) per share
|
($0.000)
|
($0.010)
|
|
|
|
Basic
weighted-average number of shares outstanding
|
155,714,695
|
145,588,289
|
Diluted
weighted-average number of shares outstanding
|
155,714,695
|
145,588,289
|
|
|
|
Cash dividends
declared
|
$0.000
|
$0.000
|
|
|
|
|
March
31,
|
December
31,
|
|
2021
|
2020
|
Cash
|
$
|
14,511,421
|
$
|
2,448,235
|
Exploration &
evaluation assets
|
39,836,317
|
38,676,797
|
Investment in joint
venture
|
11,568,668
|
11,497,351
|
Other
assets
|
657,178
|
418,704
|
Total
assets
|
$
|
66,573,584
|
$
|
53,041,087
|
|
|
|
Total current
financial liabilities
|
$
|
1,598,030
|
$
|
1,231,149
|
Total non-current
financial liabilities
|
$
|
-
|
$
|
-
|
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.
Dasa Uranium Project, Niger
The Feasibility Study undertaken in 2020 is well underway and
results from the Study are expected to be announced by the end of
Q3 2021.
In April, the Company announced that it will begin a new
15,000-meter drill program in September. The drill program is
focused on upgrading the extensive Indicated and Inferred resources
at Dasa to the Measured and Indicated categories on strike of the
Flank Zone. With the upgrading of the on-strike resources, the
Phase 1 Flank Zone mining area is expected to be expanded, adding
to the current 12-year mine plan at the Flank Zone. In addition, it
allows Global Atomic to define the Phase 2 mine plan and calculate
an NPV and IRR on the Phase 2 area. In addition to the infill
drilling, an exploration drill program is also planned to
potentially increase the overall uranium resources at Dasa.
Turkish Zinc JV, Iskenderun, Turkey
The following table summarizes comparative operational metrics
of the Iskenderun facility.
|
3 Months Ended
March 31,
|
|
2021
|
2020
|
|
100%
|
100%
|
|
|
|
Exchange rate (TL/C$,
average)
|
5.83
|
4.55
|
Exchange rate
(C$/US$, average)
|
1.27
|
1.34
|
|
|
|
Exchange rate (TL/C$,
period-end)
|
6.57
|
4.64
|
Exchange rate
(C$/US$, period-end)
|
1.26
|
1.42
|
|
|
|
EAFD processed
(DMT)
|
24,407
|
18,420
|
|
|
|
Average zinc price
(US$/LB.)
|
1.25
|
0.96
|
|
|
|
Production
(DMT)
|
8,755
|
6,366
|
Shipments
(DMT)
|
9,456
|
6,642
|
|
|
|
Shipments (zinc
content ,000 LB.)
|
14,850
|
10,350
|
|
|
|
The average zinc price in Q1 2021 was US $1.25/lb, up from US $0.97/lb in Q1 2020. The zinc price was
negatively affected due to COVID-19 in Q1 & Q2 2020, but then
began recovering from the summer 2020 through to the end of the
year. The zinc price continued to hold up throughout Q1 2021, in
view of tight concentrate supplies and continued demand
recovery.
In April 2021, the World Steel
Association published a short-range outlook for the industry,
projecting an overall production increase globally of 5.8% in 2021
over 2020, and a further 2.7% increase in 2022. This outlook is
based on the expectation of strong global recovery from COVID-19
with increased vaccinations, supported globally by government
stimulus and pent-up demand.
The Iskenderun plant processed 24,407 tonnes of EAFD in Q1 2021,
representing 89% of capacity. Efficiency of raw materials use in
the production process has improved, as have zinc recovery rates.
The Turkish JV is realizing the benefits of its investment in the
modernized Iskenderun plant.
The following table summarizes comparative results for Q1 2021
and 2020 of the JV at 100%.
|
3 Months Ended
March 31,
|
|
2021
|
2020
|
|
100%
|
100%
|
Net sales
revenues
|
$
|
15,798,634
|
$
|
8,284,270
|
|
|
|
Cost of
sales
|
7,987,519
|
7,149,307
|
Foreign exchange
(gain)
|
(728,375)
|
(495,421)
|
EBITDA(1)
|
$
|
8,539,490
|
$
|
1,630,384
|
|
|
|
Management fees &
sales commissions
|
905,742
|
450,427
|
Depreciation
|
729,357
|
897,412
|
Interest
expense
|
280,818
|
485,035
|
Foreign exchange
loss
|
2,622,994
|
3,012,660
|
Tax expense
(recovery)
|
937,130
|
(682,083)
|
Net income
(loss)
|
$
|
3,063,450
|
$
|
(2,533,067)
|
|
|
|
Global Atomic's
equity share
|
$
|
1,501,090
|
$
|
(1,241,202)
|
|
|
|
Global Atomic's
share of EBITDA
|
$
|
4,184,350
|
$
|
798,888
|
|
|
(1)
|
EBITDA is a non-IFRS
measure, does not have a standardized meaning prescribed by IFRS
and may not be comparable to similar terms and measures presented
by other issuers. EBITDA comprises earnings before income taxes,
interest expense (income), foreign exchange loss (gain) on debt,
depreciation, management fees, sales commissions, lossesQ1
(gains) on sale of property, plant and equipment and
impairment charges.
|
The Turkish JV realized significant growth in revenues during Q1
2021 compared to the same period in 2020, reflecting the combined
effect of higher throughput in the plant and a higher zinc price.
This resulted in EBITDA of $8.5
million for the quarter (at 100%) compared to $1.6 million in Q1 2020.
The cash balance of the Turkish JV was US $4.0 million at March 31,
2021.
Total debt, which includes the Befesa Loan and the Revolving
Credit Facility, has been reduced by US $5.1
million in Q1 2021. At March 31,
2021, the Befesa loans totalled US $9.15 million (December
31, 2020 – US $13.6 million)
and bear interest at Libor + 4.0% with no fixed maturity date. The
Turkish Revolving Credit Facility balance was US $7.5 million at March 31,
2021 (December 31, 2020 - US
$8.15 million) and bears interest at
2.98%.
QP Statement
The scientific and technical
disclosures in this news release have been reviewed and approved by
Ronald S. Halas, P.Eng. and
George A. Flach, P.Geo. who are
"qualified persons" under National Instrument 43-101 – Standards of
Disclosure for Mineral Properties.
About Global Atomic
Global Atomic Corporation
(www.globalatomiccorp.com) is a publicly listed company that
provides a unique combination of high-grade uranium mine
development and cash-flowing zinc concentrate production.
The Company's Uranium Division includes four deposits with the
flagship project being the large, highgrade Dasa Project,
discovered in 2010 by Global Atomic geologists through grassroots
field exploration. With the issuance of the Dasa Mining Permit and
an Environmental Compliance Certificate by the Republic of
Niger, the Dasa Project is fully
permitted for commercial production. Final design in support of the
Company's Feasibility Study is on-going.
Global Atomics' Base Metals Division holds a 49% interest in the
Befesa Silvermet Turkey, S.L. ("BST") Joint Venture, which operates
a new, state of the art zinc production plant, located in
Iskenderun, Turkey. The plant
recovers zinc from Electric Arc Furnace Dust ("EAFD") to produce a
high-grade zinc oxide concentrate which is sold to zinc smelters
around the world. The Company's joint venture partner, Befesa Zinc
S.A.U. ("Befesa") listed on the Frankfurt exchange under 'BFSA', holds a 51%
interest in and is the operator of the BST Joint Venture. Befesa is
a market leader in EAFD recycling, with approximately 50% of the
European EAFD market and facilities located throughout Europe and Asia.
The information in this release may contain forward-looking
information under applicable securities laws. Forward-looking
information includes, but is not limited to, statements with
respect to completion of any financings; Global Atomics'
development potential and timetable of its operations, development
and exploration assets; Global Atomics' ability to raise additional
funds necessary; the future price of uranium; the estimation of
mineral reserves and resources; conclusions of economic evaluation;
the realization of mineral reserve estimates; the timing and amount
of estimated future production, development and exploration; cost
of future activities; capital and operating expenditures; success
of exploration activities; mining or processing issues; currency
exchange rates; government regulation of mining operations; and
environmental and permitting risks. Generally,
forward-looking statements can be identified by the use of
forward-looking terminology such as "plans", "is expected",
"estimates", variations of such words and phrases or
statements that certain actions, events or results "could",
"would", "might", "will be taken", "will begin", "will include",
"are expected", "occur" or "be achieved". All information
contained in this news release, other than statements of current or
historical fact, is forward-looking information.
Statements of forward-looking information are subject to known and
unknown risks, uncertainties and other factors that may cause the
actual results, level of activity, performance or achievements of
Global Atomic to be materially different from those expressed or
implied by such forward-looking statements, including but not
limited to those risks described in the annual information form of
Global Atomic and in its public documents filed on SEDAR from time
to time.
Forward-looking statements are based on the opinions and
estimates of management at the date such statements are made.
Although management of Global Atomic has attempted to identify
important factors that could cause actual results to be materially
different from those forward-looking statements, there may be other
factors that cause results not to be as anticipated, estimated or
intended. There can be no assurance that such statements will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance upon
forward-looking statements. Global Atomic does not undertake
to update any forward-looking statements, except in accordance with
applicable securities law. Readers should also review the
risks and uncertainties sections of Global Atomics' annual and
interim MD&As.
The Toronto Stock Exchange has not reviewed and does not accept
responsibility for the adequacy and accuracy of this news
release.
SOURCE Global Atomic Corporation