TORONTO, Nov. 14,
2022 /CNW/ - Global Atomic Corporation ("Global
Atomic" or the "Company"), (TSX: GLO) (OTCQX: GLATF) (FRANKFURT:
G12) announced today its operating and financial results for the
three and nine months ended September 30,
2022.
HIGHLIGHTS
Dasa Uranium Project
- In September, the Company completed a 15,000-meter drill
program at its Dasa Project that began in Q4 2021, which due to its
success was expanded to include another 1,000 meters.
- Excavation and ground support for the Box-Cut ramp access to
the mine was completed, setting the stage for underground
development.
- Site work in preparation for portal and ramp development
included construction of employee housing, warehouse and
maintenance facilities, surface buildings for mining activities,
power and water servicing of the site.
- Mining equipment and supplies continue to arrive at the Dasa
site.
- Dasa has built up a work force of approximately 150
individuals, drawn mostly from the local population including both
trained mine workers with years of experience in Niger and untrained labourers who will be
enrolled in training and apprenticeship programs.
- On July 21, 2022, the Company
announced it had engaged Enernet Global Inc. ("Enernet") to design
an optimized hybrid power plant for the Dasa Project to include
solar power and battery storage. The plant will be built, owned,
operated and maintained by Enernet and displace close to 40% of
carbon emissions.
- On August 11, 2022, the Company's
Niger mining subsidiary, Société
Minière de DASA S.A. ("SOMIDA") was incorporated.
- On August 26, 2022, the Company
engaged Development Consultants Private Limited ("DCPL") to
complete basic and detailed engineering services required for the
construction of the Dasa processing plant.
- On September 19, 2022, the
Company engaged Lycopodium Minerals Canada Ltd. ("Lycopodium") to
provide project management, procurement, project controls and
project execution plan services. Lycopodium's engagement may be
extended to include construction services to build Dasa's ore
processing plant.
- Underground development began on November 5th, 2022, with the Opening
Blast Ceremony. Mining will be conducted by a skilled Nigerien
workforce under the guidance of Canadian contractor CMAC-Thyssen
who has provided training on new equipment now being utilized at
the Dasa Mine.
- Subsequent to the end of Q3 on October
5, 2022, the Company announced that it had entered into a
Letter of Intent with a second major North American utility to
purchase 2.4 million pounds U3O8.
Turkish Zinc Joint Venture
- The Turkish Zinc Joint Venture ("BST" or the "Turkish JV")
plant processed 60,633 tonnes EAFD for first nine months of 2022
(53,012 in 2021).
- The Turkish JV applied IAS 29, Financial Reporting in
Hyperinflationary Economies in Q3. A $7.3
million gain which is the difference between the closing
balance of shareholders' equity of the Turkish JV at December 31, 2021 and the opening balance at
January 1, 2022 is recognized in
equity.
- Year-to-date 2022, the Turkish JV EBITDA was $8.6 million ($18.2
million in 2021) and for Q3 2022 was a negative $3.5 million ($6.4
million in 2021).
- The negative EBITDA in Q3 results from a combination of the
following:
- o Zinc price adjustments on provisional sales prices reduced
EBITDA by $3.0 million
- o The application of Q3 exchange rates to Q1/Q2 results as
required under IAS 29 reduced EBITDA by $1.5
million
- o A negative EBITDA adjustment of $0.9
million resulted from the 9 months catch up adjustment due
to inflation accounting under IAS 29
- For the first nine months of 2022 and 2021, the zinc contained
in concentrate shipments was 29.2 and 28.1 million pounds,
respectively.
- In the first nine months of 2022 the average zinc price was
US$1.65/lb (US$1.31/lb in 2021).
- The amount drawn on the revolving credit facility of the
Turkish JV was US$6.8 million at the
end of Q3 2022 (Global Atomic share – US$3.3
million).
- The cash balance of the Turkish JV was US$2.9 million as at September 30, 2022.
Corporate
- In the first nine months of 2022, the Company received
$8.9 million through the exercise of
outstanding warrants issued in March
2021.
- Global Atomic continues to receive monthly management fees and
sales commissions from the Turkish JV ($209,000 in Q3 2022 compared to $224,000 in Q3 2021).
- Cash balance at September 30,
2022, was $18.2 million.
President & CEO of Global Atomic, Stephen Roman, stated, "On November 5th I witnessed remarkable support for
the Dasa Mine at our Opening Blast Ceremony, with a turnout of over
800 local Nigeriens, including the Prime Minister of Niger, the Minister of Mines and many national
and regional dignitaries. The blast opened the Portal and commences
the underground development of the Dasa Mine. This is a
significant milestone as it marks the beginning of the realization
of all the exploration, drilling, permitting, feasibility process,
planning and construction that the Global Atomic team has been
working on diligently since we entered Niger in 2005."
"Relating to our Turkish Joint Venture operations, we chose
Q3 to make the IFRS mandated adjustment on the perceived
hyper-inflationary environment in Turkey. This resulted in a significant
increase in our opening equity value of the operation and
subsequent losses in Q3 2022 due to the application of this
standard. We also incurred losses in Q3 from smelter price
adjustments due to the decrease in the zinc price over the quarter.
Shareholders should focus on the 9-month results which show a
positive EBITDA margin despite the Turkish steel industry, which
has not recovered from the effects of Covid and reduced demand.
This is an essential service provided to the Turkish steel mills
and will continue to be so for decades into the future."
OUTLOOK
Dasa Uranium Project
- The Company is proceeding with an update to its Mineral
Resource Estimate ("MRE"). Following the MRE update, an updated
Mine Plan will be developed, and
Dasa's reserve statement updated. It is expected that this will
result in an increase in ore reserves and lower operating
costs.
- Discussions with international electric utilities continue with
the expectation that additional long-term contracts for the sale of
yellowcake will be concluded over the next months.
- The project finance banking syndicate is completing its due
diligence and a term sheet is expected to be signed prior to year
end, with final documentation to follow.
- The Company is continuing discussions with Orano Mining
relating to the direct shipment of development ore to the Somaïr
processing facility located 105 kilometers north of the Dasa
Project.
- Permeability and porosity test results to determine in-situ
leaching potential for the Isakanan Project on the Adrar Emoles 4
permit are expected in Q4 2022, delayed due to backlogs at the
Canadian labs.
Turkish Zinc Joint Venture
- The Turkish zinc plant continues to operate at target operating
efficiencies.
- The business outlook continues to be positive amid inflationary
pressures and lower zinc prices.
COMPARATIVE RESULTS
The following table summarizes comparative results of operations
of the Company:
MD&A TABLE -
HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
(all amounts in
C$)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
Revenues
|
$
209,393
|
|
$
223,645
|
|
$
1,039,371
|
|
$
833,435
|
|
|
|
|
|
|
|
|
General and
administration
|
1,874,722
|
|
1,839,403
|
|
6,907,950
|
|
5,555,109
|
Share of equity loss
(earnings)
|
2,201,074
|
|
(2,134,265)
|
|
(328,227)
|
|
(3,943,846)
|
Other (income)
expense
|
387,999
|
|
(1,000)
|
|
979,634
|
|
(68,000)
|
Finance (income)
expense
|
(40,301)
|
|
7,709
|
|
(83,439)
|
|
18,310
|
Foreign exchange (gain)
loss
|
(2,456,458)
|
|
7,481
|
|
(2,389,045)
|
|
60,854
|
Net income
(loss)
|
$
(1,757,643)
|
|
$
504,317
|
|
$
(4,047,502)
|
|
$
(788,992)
|
Net gain (loss)
attributable to:
|
|
|
|
|
|
|
|
Shareholders of the
Company
|
(1,714,941)
|
|
504,317
|
|
(4,004,800)
|
|
(788,992)
|
Non-controlling
interests
|
(42,702)
|
|
-
|
|
(42,702)
|
|
-
|
Other comprehensive
income (loss)
|
$
1,614,064
|
|
$
148,130
|
|
$
(2,921,921)
|
|
$
(3,738,763)
|
Comprehensive income
(loss)
|
$
(143,579)
|
|
$
652,447
|
|
$
(6,969,423)
|
|
$
(4,527,755)
|
Comprehensive income
(loss) attributable to:
|
|
|
|
|
|
|
|
Shareholders of the
Company
|
(208,938)
|
|
652,447
|
|
(7,034,782)
|
|
(4,527,755)
|
Non-controlling
interests
|
65,359
|
|
-
|
|
65,359
|
|
-
|
|
|
|
|
|
|
|
|
Basic and diluted net
loss per share
|
($0.01)
|
|
$0.00
|
|
($0.02)
|
|
($0.00)
|
|
|
|
|
|
|
|
|
Basic
weighted-average
number of shares outstanding
|
178,178,390
|
|
162,330,717
|
|
176,709,774
|
|
160,449,845
|
Diluted
weighted-average
number of shares outstanding
|
178,178,390
|
|
172,921,252
|
|
176,709,774
|
|
160,449,845
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
|
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
$
18,243,116
|
|
$
34,179,449
|
|
|
|
|
Property, plant and
equipment
|
70,643,264
|
|
46,175,097
|
|
|
|
|
Exploration &
evaluation assets
|
994,383
|
|
681,989
|
|
|
|
|
Investment in joint
venture
|
16,537,956
|
|
8,981,986
|
|
|
|
|
Other assets
|
6,108,912
|
|
3,581,512
|
|
|
|
|
Total
assets
|
$
112,527,631
|
|
$
93,600,033
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
$
7,314,511
|
|
$
2,895,756
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity
|
$
105,213,120
|
|
$
90,704,277
|
|
|
|
|
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. See also
the commentary above under "Turkish Zinc EAFD Operations."
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.
General and administration costs at the
corporate level include general office and management expenses,
stock option awards, depreciation, costs related to maintaining a
public listing, professional fees, audit, legal, accounting, tax
and consultants' costs, insurance, travel and other miscellaneous
office expenses. The variance between the years is largely due to
higher stock option grants in Q1 2022 and increased staffing that
took place in 2022.
Net gain (loss) attributable to Non-controlling
interest represents 20% ownership of the Republic of
Niger in SOMIDA. $42
thousand loss is related to the exchange loss of SOMIDA incurred
during the period between the incorporation and the reporting
date.
Other Comprehensive Income (loss) represents
unrealized exchange gains (losses) that arise from the translation
of the balance sheets from functional currencies (US$, West African
CFA Franc and TRY) to the Canadian dollar presentation
currency.
Uranium Business
Following completion of the Preliminary Economic Assessment of
the Dasa Project in May 2020, the
Company initiated various trade-off studies which were followed up
by a Feasibility Study for the first 12 years ("Phase 1").
The Phase 1 Feasibility Study was reported with an effective
date of November 15, 2021 and the
full Feasibility Study was filed on SEDAR on December 30, 2021.
Laboratory test work was undertaken in three independent pilot
plant campaigns with results from each campaign guiding and
directing the subsequent campaign. Variations in quantity and
type of process recovery consumables were used to determine the
optimum recovery of uranium for the most practical equipment
selection with the lowest reasonable consumable cost. The
final selection of the process followed the principles established
in uranium operations in the region which have proven to be
successful over the past 50 years.
Mineral Reserves for the Dasa Project were estimated based on
the geology and Mineral Reserve Estimate ("MRE") previously
reported by CSA Global. An engineering design and costing
exercise was undertaken to a feasibility study level of accuracy
which supports the MRE.
Detailed engineering designs were undertaken for the underground
mine workings, mining surface infrastructure, process plant,
tailing storage facility, and support services infrastructure.
These designs enabled detailed pricing enquiries to be issued to
the market in the development of a comprehensive capital cost and
sustaining cost estimate. Labour and consumable material
requirements were developed and costed in the open markets to
establish an expected operating cost over Phase 1. Sourcing
of electrical power and water was determined to meet the mine
requirements, and these too, contributed to the operational cost
estimate. The capital cost estimate, sustaining cost estimate
and operational cost estimates for the various elements of the mine
and process plant were combined into an economic analysis of the
project to determine a financial model for the mine.
The Feasibility Study was completed at a detailed level of
design and engineering to enable an appropriate level of confidence
to be applied to the economic viability and outcomes of the
project. As a result of the Feasibility Study, the following
Mineral Reserves were estimated.
Mineral Reserve
Category
|
RoM
|
eU308
|
U308
|
U308
|
(tonnes)
|
(ppm)
|
(t)
|
(Million
lbs)
|
Proven Mineral
Reserve
|
-
|
-
|
-
|
|
Probable Mineral
Reserve
|
4,066,390
|
5,267
|
21,417
|
47.217
|
The Phase 1 Feasibility Study identified five zones of mineral
reserves as shown in the following schematic.
The mining inventory included in the Feasibility Study included
a minor amount of Inferred Resources shown as follows:
|
RoM
tonnes
|
U3O8
ppm
|
U3O8
(t)
|
U3O8
(Million lbs)
|
Measured
|
-
|
-
|
-
|
|
Indicated
|
4,066,390
|
5,267
|
21,417
|
47.217
|
Inferred
|
187,236
|
3,375
|
632
|
1.393
|
Total Mining
inventory
|
4,253,626
|
5,184
|
22,050
|
48.611
|
The Zones vary in grades, with Zone 1 (Flank Zone) contributing the
largest portion of the U3O8 tonnes:
Zone
|
In-situ
Tonnes
|
U3O8
PPM
|
RoM
Tonnes
|
RoM U3O8
PPM
|
RoM U3O8
Tonnes
|
1
|
2,464,615
|
6,980
|
2,316,047
|
6,887
|
15,950
|
2
|
264,339
|
3,621
|
256,078
|
3,574
|
915
|
3
|
656,114
|
3,093
|
633,541
|
3,056
|
1,936
|
4
|
604,673
|
3,003
|
584,616
|
2,966
|
1,734
|
5
|
478,916
|
3,312
|
463,345
|
3,269
|
1,515
|
Total
|
4,468,657
|
5,279
|
4,253,626
|
5,184
|
22,050
|
Reserve Expansion
There are significant Inferred Resources located above Zone 3
and between Zones 2 and 3. The Company completed a
15,000-meter drill program at its Dasa Project that began in Q4
2021, which due to its success was expanded to include another
1,000 meters. Drill results indicate that Zones 2, 2a and
2b now represent a contiguous zone
that joins up with Zone 3 and is estimated to be approximately
three times larger than initially defined (see the longitudinal
depiction below). Recent drilling has also targeted the extension
of Zone 4.
On the strength of results from the overall drill program,
Global Atomic is updating the Dasa Mineral Resource Estimate
("MRE") and will in turn update its Mine
Plan which is expected to result in larger and contiguous
mining Zones, reduced underground development work between the
Zones, lower operating costs and an increase in mineable
reserves. The updated MRE is expected to be completed in Q1
2023.
Mining Permits and Niger Mining Company
In September 2020, GAFC applied
for the Mining Permit on the Dasa deposit and the Mining Permit was
subsequently awarded on December 23,
2020. The Company also completed its Environmental Impact
Statement and on January 28, 2021
received its Environmental Certificate of Compliance.
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.
Dasa Mine Development and Construction
The Company has entered into an agreement with CMAC-Thyssen
International Inc. ("CMAC"), a contract miner based in Val d'Or, Quebec to provide contract mining
services in the development of the Dasa underground mine over the
first 24 months of mining. Following the March 2020 closure of the Cominak underground
uranium mine in Arlit, there is a pool of skilled miners available
to the Company in Niger.
CMAC is providing training, development and oversight of the
Niger workforce with the new
equipment that will be used at site. Initial mining will
comprise only ramp development during the first 12 months, followed
by access and level development. Equipment and mining consumables
have been procured and shipped to site.
The Box-Cut has been completed and is prepared for development
of the portal. The First Blast of the portal took place on
November 5, 2022, marking the start
of the underground development. Surface infrastructure to support
CMAC has been completed.
The Company engaged DCPL and Lycopodium to commence the EPCM
process to build Dasa's ore processing plant. DCPL is
focusing on the Basic and Detailed Engineering required for the
final design of the Dasa Process Plant. Lycopodium is providing
project management, procurement, project controls and a project
execution plan services. Lycopodium's engagement may be
extended to include construction management in view of their
extensive West African experience.
Project Financing
Global Atomic has received a Letter of Interest ("LOI") from
Export Development Canada ("EDC") confirming their interest in
working with the Company on a project financing of the Dasa
Project. EDC expects to partner with other export credit agencies,
commercial banks and/or financial institutions as co-lenders and to
have a lead role in the structuring of the debt facility. EDC
has indicated a potential participation, at typical bank rates for
a greenfield mining project finance, of up to US$75 million to form the cornerstone of what is
expected to be a syndicate of banks. On June 15, 2022, Global Atomic also received
additional Letters of Intent such that a syndicate has been formed
to finance the Dasa Project. The syndicate is comprised of
North American financial institutions, including EDC.
The names of all members of the syndicate will be announced
following further due diligence and board approvals by the
financial institutions involved. The Company expects to enter
into term sheets with the syndicate before year end, followed by
documentation in Q1 2023.
Turkish Zinc JV EAFD Operations
The Company's Turkish EAFD business operates through a joint
venture with Befesa Zinc S.A.U. ("Befesa"), an industry leading
Spanish company that operates several Waelz kilns throughout
Europe, North America and Asia. On October
27, 2010, Global Atomic and Befesa established a joint
venture, known as Befesa Silvermet Turkey, S.L. ("BST" or the
"Turkish JV") to operate an existing plant and develop the EAFD
recycling business in Turkey.
BST is held 51% by Befesa and 49% by Global Atomic. A
Shareholders Agreement governs the relationship between the
parties. Under the terms of the Shareholders Agreement, management
fees and sales commissions are distributed pro rata to Befesa and
Global Atomic. Net income earned each year in Turkey, less funds needed to fund operations,
must be distributed to the partners annually, following the BST
annual meeting, which is usually held in the second quarter of the
following year.
BST owns and operates an EAFD processing plant in Iskenderun,
Turkey. The plant processes
EAFD containing 20% to 30% zinc that is obtained from electric arc
steel mills, and produces a zinc concentrate grading 65% to 70%
zinc that is then sold to zinc smelters.
Global Atomic holds a 49% interest in the Turkish JV and, as
such, the investment is accounted for using the equity basis of
accounting. Under this basis of accounting, the Company's
share of BST's earnings is shown as a single line in its
Consolidated Statements of Income (Loss).
The following table summarizes comparative operational metrics
of the Iskenderun facility.
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
100 %
|
|
100 %
|
|
100 %
|
|
100 %
|
|
|
|
|
|
|
|
|
Exchange rate (C$/TL,
average)
|
13.72
|
|
6.78
|
|
12.43
|
|
6.44
|
Exchange rate (US$/C$,
average)
|
1.31
|
|
1.26
|
|
1.29
|
|
1.25
|
|
|
|
|
|
|
|
|
Exchange rate (C$/TL,
period-end)
|
13.51
|
|
6.98
|
|
13.51
|
|
6.98
|
Exchange rate (US$/C$,
period-end)
|
1.37
|
|
1.27
|
|
1.37
|
|
1.27
|
|
|
|
|
|
|
|
|
Average zinc price
(US$/lb)
|
1.48
|
|
1.36
|
|
1.65
|
|
1.31
|
|
|
|
|
|
|
|
|
EAFD processed
(DMT)
|
15,022
|
|
16,370
|
|
60,633
|
|
53,012
|
|
|
|
|
|
|
|
|
Production
(DMT)
|
4,596
|
|
5,461
|
|
18,435
|
|
18,478
|
Shipments
(DMT)
|
6,389
|
|
5,460
|
|
20,150
|
|
18,658
|
|
|
|
|
|
|
|
|
Shipments (zinc content
'000 lbs)
|
9,200
|
|
8,015
|
|
29,163
|
|
28,071
|
For the nine months ended September 30,
2022, world steel production decreased by 4.3% over the
comparable 2021 period. The impact by region was mixed.
For the first nine months of 2022 compared to H1 2021:
Chinese production decreased 3.4%; European Union production
decreased 8.2%; North American production decreased 4.2%, and
Turkish production decreased by 9.3%.
In October 2022, the World Steel
Association released an update of its short-term outlook for
demand, which projected 2.3% overall global demand contract in 2022
and a recovery of 1.0% in 2023. The impact of the Ukrainian
conflict on global steel markets is uncertain, however as exports
from Russia and Ukraine have historically accounted for 10% of
global steel exports, it is likely a material percentage of this
supply will be replaced by increased production in other
countries.
The Ukrainian conflict, post-COVID demand increases, raw
material shortages and global logistics challenges have in
combination resulted in substantial inflationary pressures on all
costs. Although strong zinc prices have largely offset the impact
of inflation on dollar margins, the EBITDA margin percentage has
declined in the current year.
In addition to the existing nine hyperinflationary economies
including Venezuela and
Argentina, the Turkish economy was
deemed to be hyperinflationary after the International Monetary
Fund World Economic Outlook ("IMF WEO") that was published in
April 2022 reported a 3-year
cumulative rate of inflation of 74% and an annual rate of inflation
of 36% as of December 2021. For 2022,
the IMF WEO forecasts an annual rate of inflation of 52% (2023:
30%) and a 3-year cumulative rate of inflation of 138% (2023:
169%). The Turkish Statistical Institute ("TURKSTAT") reported a
3-year and 12-month cumulative rate of inflation of 145% and 83%,
respectively, as of September 30,
2022. Therefore, the Turkish economy is considered
hyperinflationary, requiring the first-time application of IAS 29,
Financial Reporting in Hyperinflationary Economies. IAS 29
requires the non-monetary assets and liabilities and income
statements of countries with hyperinflationary economies to be
restated to reflect the changes in the general purchasing power of
their functional currency, thereby generating a profit or loss on
the net monetary position which is recognized in net income as gain
or loss on net monetary position. In addition, the financial
statements of the subsidiaries in these countries are translated at
the closing exchange rate of the reporting period concerned, in
accordance with IAS 21, The Effects of Changes in Foreign Exchange
Rates.
The comparative information is not restated, because it has
already been presented in Canadian dollar (CAD). The gain of
$7.3 million between the closing
balance of shareholders' equity of the Turkish JV at December 31, 2021 and the opening balance at
January 1, 2022 is recognized in
equity:
Opening net assets of
the Company's investments in joint venture at January 1,
2022
|
|
$
8,981,986
|
Gain on first time
application of IAS 29
|
|
|
|
7,314,097
|
Cormpany's share of net
earnings of joint venture
|
|
|
|
328,227
|
Company's share of
other comprehensive loss of joint venture
|
|
|
|
(86,354)
|
Carrying value of the
Company's investment in joint venture at September 30,
2022
|
|
$
16,537,956
|
The following table summarizes comparative results for the three
and nine months ended September 30,
2022 and 2021 of the Turkish JV at 100%.
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
100 %
|
|
100 %
|
|
100 %
|
|
100 %
|
Net sales
revenues
|
$
15,812,371
|
|
$
12,694,730
|
|
$
48,289,793
|
|
$
34,901,981
|
Cost of
sales
|
19,803,086
|
|
6,252,229
|
|
41,092,605
|
|
17,518,999
|
Foreign exchange gain
(loss)
|
528,443
|
|
(27,880)
|
|
1,514,451
|
|
789,346
|
EBITDA(1)
|
$
(3,462,272)
|
|
$
6,414,621
|
|
$
8,711,639
|
|
$
18,172,328
|
|
|
|
|
|
|
|
|
Management fees &
sales commissions
|
452,422
|
|
461,697
|
|
2,142,367
|
|
1,688,371
|
Depreciation
|
1,775,404
|
|
630,438
|
|
2,518,976
|
|
1,974,306
|
Interest
expense
|
377,852
|
|
170,015
|
|
914,605
|
|
640,972
|
Foreign exchange loss
on debt and cash
|
870,963
|
|
56,059
|
|
3,431,433
|
|
3,290,992
|
Monetary
gain
|
(2,490,661)
|
|
-
|
|
(2,490,661)
|
|
-
|
Tax expense
|
43,736
|
|
740,770
|
|
1,525,068
|
|
2,529,021
|
Net income
|
$
(4,491,988)
|
|
$
4,355,642
|
|
$
669,851
|
|
$
8,048,666
|
Global Atomic's equity
share
|
$
(2,201,074)
|
|
$
2,134,265
|
|
$
328,227
|
|
$
3,943,846
|
|
|
|
|
|
|
|
|
Global Atomic's share
of EBITDA
|
$
(1,696,513)
|
|
$
3,143,164
|
|
$
4,268,703
|
|
$
8,904,441
|
(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 and
bank, depreciation, management fees, sales commissions, losses
(gains) on sale of property, plant and equipment.
|
The Company elected to present the catch-up adjustment fully in the
consolidated statements of income (loss) for the three months ended
September 30, 2022 and the impact of
inflation on income and expenses recognised in the previous
quarters are not restated. In addition, income and expenses are
translated at the closing exchange rate of the reporting period
whereas they were translated at the year-to-date average exchange
rate in the Q1 and Q2 condensed interim financial statements.
Zinc concentrates are sold to smelters in US dollars ("US$").
Because the Turkish Lira ("TRY") is the functional currency of the
Turkish operations, sales are converted to TRY at the date of the
sale when funds are subsequently received. When the TRY depreciated
in both Q3 2021 and Q3 2022, exchange gains were recognized on
those sales. In calculating EBITDA, these exchange changes related
to the functional and reporting currencies are treated as
operations related (i.e., above the EBITDA subtotal). Sales are
recorded upon receipt at the smelter, which means that recorded
sales in any given month generally represent the concentrate from
EAFD processed in the prior month. Sales for the nine months ended
September 30, 2022 were produced in
December 2021 through August 2022.
As disclosed in the above table, EBITDA of negative $3.5 million for the three months ended
September, 2022, is the difference between the EBITDA for the nine
months ended September 30, 2022
amounting to $8.7 million and EBITDA
for the six months ended June 30,
2022 amounting to $12.2
million and includes the cumulative impact of final price
adjustments to prior period sales, devaluation of TRY and using
closing exchange rate rather than year-to date average and
hyperinflation adjustment. Excluding the negative impact of
hyperinflation accounting ($2.4
million) and the negative impact of provisional pricing
($3.0 million), EBITDA from
operations in Q3 2022 would be $2.1
million.
Sales are initially recognized with provisional pricing upon
receipt at the smelter but the final price is set at a later time
in accordance with the contracts signed with the smelters. Since
average zinc price of 1.78 US$/lb in
Q2 2022 reduced to 1.48 US$/lb in Q3,
a $3.0 million loss from the Q2 2022
shipments' final price adjustment is recorded in Q3 2022 and
reduces EBITDA.
By applying IAS 29, income and expenses of the nine months ended
September 30, 2022 are translated at
the closing exchange rate from TRY to CAD which is 15% higher than
the CAD/TRY rate used in the six months period ended June 30, 2022. The financial impact of using a
higher CAD/TRY rate for the first six months of 2022 EBITDA is a
loss of $1.5 million, included in Q3
EBITDA.
Since the Company elected to present the hyperinflation catch-up
adjustment fully in the consolidated statements of income (loss)
for the three months ended September 30,
2022, $0.9 million loss from
the nine periods ended September 30,
2022 is included in Q3 2022 EBITDA.
The cash balance of the Turkish JV was US$2.9 million at September 30, 2022.
Total debt was reduced to US$6.8
million in Q3 2022 from US$12.45
million at the end of 2021. The local Turkish revolving
credit facility balance was US$6.8
million at September 30, 2022
(December 31, 2021 - US$7.8 million) and bears interest at 11%. The
Turkish revolving credit facility can be rolled forward. In Q2
2022, the Befesa loan related to the 2019 plant expansion, was
fully paid (December 31, 2021 –
US$4.65 million). Now that the Befesa
loan has been repaid, Turkish JV dividend payments will resume.
The foreign exchange loss is an unrealized loss, and largely
relates to the devaluation of the TRY relative to the US$ from
13.36 on December 31, 2021, to 18.52
at September 30, 2022. In economic
terms, all revenues are received in US$ and these will be used to
pay down the US denominated debt, so no exchange gains/losses will
be realized in US$ terms. The accounting exchange losses relate to
the debt and cash balances are shown below EBITDA as a financing
related cost.
QP Statement
The scientific and technical disclosures in this news release
have been reviewed and approved by Ronald
S. Halas, P.Eng. who is a "qualified person" 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, high-grade 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. The Phase 1 Feasibility Study
for Dasa representing approximately 20% of the known resource was
filed in December 2021 and estimates
Yellowcake production to commence by the end of 2024. Mine
excavation began in Q1 2022.
Global Atomic's Base Metals Division holds a 49% interest in the
Befesa Silvermet Turkey, S.L. (BST) Joint Venture, which operates a
modern 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) 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, Asia and the United
States of America.
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