Global Atomic Corporation (“Global Atomic” or the “Company”),
(TSX-V: GLO, FRANKFURT: G12) is pleased to announce its operating
and financial results for the first quarter (“Q1 2019”) ended March
31, 2019.
Highlights:
- The Turkish EAFD plant modernization and expansion project is
on schedule.
- The plant is scheduled to be commissioned in August and resume
operations in September.
- The Company is stockpiling EAFD to support a quick ramp up of
operations.
- The new plant is expected to generate free cash flow on the
re-start and dividend payments are expected to resume in 2021,
following repayment of construction costs.
- The updated Resource Statement for the DASA uranium deposit is
near completion and will include all assay data from the 2018 drill
program.
- A mine plan based on the updated Resource Statement will be
developed and included in a feasibility study which is scheduled to
be completed by H1 2020.
- The Company will apply for the DASA Mining Permit in mid-2020
with permits expected to be issued Q4 2020.
- The Company began trading on the TSX Exchange on May 8, 2019
and continues to trade under the stock symbol: GLO.
Outlook:
- The Turkish EAFD plant is expected to be back in production
prior to the end of Q3 2019.
- Work on the resource update and feasibility study indicate the
DASA deposit is a large, high grade uranium deposit that will
demonstrate strong economics.
- Discussions with the French Government uranium producer Orano
Mining regarding the Memorandum of Understanding executed in July
2017 are progressing well and the Company is considering various
options for early delivery of ore.
Base Metals Division
Operations
The BST joint venture owns and operates an EAFD
processing plant in Iskenderun, Turkey. The plant processes EAFD
containing 25% to 30% zinc that is obtained from electric arc steel
producers and produces a zinc concentrate grading 68% to 70% zinc
that is then sold to zinc smelters.
Global Atomic holds a 49% interest in the BST
joint venture 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
income statement. The following table summarizes comparative
results for 2019 and 2018 of the joint venture at 100%.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/97f209e8-903f-4f29-ba57-dcafc2bb6d74
- 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) and
financing expense (income), amortization expense, foreign exchange
loss (gain), and other expenses including management fees, sales
commissions; gain on sale of property, plant and equipment and
impairment charges.
The following table summarizes comparative
operational metrics of the Iskenderun facility.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/63f74ee6-8638-42e6-aabb-6789e6c822b9
Operating results in Q1 2019 reflect the closure
of the plant in January to enable construction of the new plant.
Accordingly, results are not comparable to those of the prior year.
A significant tax credit is included in Q1 2019, resulting from
recognition of a deferred tax asset related to tax credits
available against future taxes payable, based on new plant
investments under the Turkish investment incentive program.
The modernization and expansion of the
Iskenderun plant is estimated to cost approximately US $26 million.
The contracts for the supply and installation of the equipment are
largely on an “EPC” basis, so there is limited risk of cost
overruns. BST is funding the costs of the project with existing
cash and available credit facilities, with the result that no
equity contributions are required from the joint venture
partners.
Photos accompanying this announcement are available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/0e1e1ac7-6477-4dd4-9ce4-92dc18722770
https://www.globenewswire.com/NewsRoom/AttachmentNg/4a41c305-cc5d-40f1-b4ae-27275b8a8a51
The Iskenderun plant project continues to be on
schedule, with commissioning to be completed by September 2019,
after which the plant will be fully operational. The existing plant
was closed in January 2019 to facilitate the construction of the
new plant. During the shut-down period EAFD is being stored in a
warehouse and an estimated 25,000 tonnes EAFD will be available at
start-up of the new plant. The economics of the new plant will be
greatly improved as a result of the following:
- EAFD throughput increases from 60,000 tonnes to 110,000 tonnes
EAFD
- Zinc recovery rates are expected to improve from 80% to
90%
- Zinc contained in concentrate will double from 30 million
pounds/year to 60 million pounds/year based on full
utilization
- Unit operating costs will be reduced
- Dependent on utilization rates and zinc prices, EBITDA is
expected to increase by 2 to 3 times.
The Iskenderun plant will utilize the best
available technology and process EAFD in a clean, environmentally
sensitive manner.
Photos accompanying this announcement are available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/0b7f4797-3fe6-4aff-abc0-33d4ed0b3dd8
https://www.globenewswire.com/NewsRoom/AttachmentNg/ab60b7b0-bec6-4c98-aade-ce5201afd1fb
Uranium Division Operations
Subsequent to the acquisition of GAFC in late
2017, the Company remobilized to the field and drilling began in
late drilling activities in January 2018. Global Atomic drilled
approximately 27,000 metres at the DASA deposit during 2018. The
primary objectives of the drill program were to prove the potential
for near surface production at the Flank Zone and to assess the
potential for further discoveries and resource expansion along
strike and down dip. This program was very successful.
Drilling at the Flank Zone significantly
expanded resources and drilling along strike and down dip
identified several new zones at the Tegama Hill, Tegama Hill South,
the Northeast extensions and the Southwest Extensions (see the
image below):
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/b11597ab-cb98-48df-be6e-95417354f03d
Near surface drilling at the Flank Zone
completed in the first half of 2018 was used as the basis for an
updated National Instrument (“NI”) 43-101 Mineral Resource Estimate
prepared by CSA Global Pty Ltd. (“CSA Global”). The updated
resource report incorporates an additional 36 drill holes totaling
approximately 15,000 metres drilled from January to June 2018.
The June 30, 2018 CSA Global report concluded on
the Mineral Resource Statement for the DASA deposit shown in the
table below:
Category |
Tonnes |
eU3O8 |
Contained metal |
Mt |
Ppm |
Mlb |
Indicated – Pit Constrained |
7.08 |
3,251 |
50.8 |
Indicated – Underground |
2.5 |
2,553 |
14.1 |
Total Indicated |
9.59 |
3,068 |
64.8 |
Inferred – Pit Constrained |
0.26 |
1,135 |
0.7 |
Inferred – Underground |
8.18 |
2,647 |
47.7 |
Total Inferred |
8.44 |
2,600 |
48.4 |
* These results are based on gamma probing.
Final results will be released once chemical assaying is completed
at ALS Global in Vancouver, Canada.
- Mineral Resources are based on CIM definitions and is reported
as at 1st June 2018.
- Mineral Resources for pit constrained resources are estimated
within the limits of an ultimate pit shell
- Mineral Resources for underground resources are estimated
outside the limits of ultimate pit shell.
- A cut-off grade of 320 ppm eU3O8 has been applied for open pit
resources.
- A cut-off grade of 1200 ppm eU3O8 has been applied for
underground resources.
- A bulk density of 2.36t/m3 has been applied for all model
cells.
- Rows and columns may not add up exactly due to rounding.
Subsequent to completion of the latest Mineral
Resource Estimate, the Company continued to intersect additional
high grade mineralization in the Flank Zone. An updated Mineral
Resource Statement is currently being prepared by CSA Global,
taking into account all of the 2018 drill results and related
assays. The updated Mineral Resource Statement is expected to be
available late Q2 or early Q3 2019.
CSA Global is presently updating the Mineral
Resource Statement for DASA to incorporate all available
information. Once this is completed, several mine plans will be
evaluated to arrive at the optimal mining scenario. Any additional
studies required to support a feasibility study will be initiated,
so that a feasibility study is available late 2019. Upon completion
of the feasibility study, Global Atomic will apply for a Mining
Permit on the DASA deposit. Historically, mining permits have been
awarded within 4 to 6 months.
Global Atomic is in the second renewal period
for its Exploration Permits. Such Exploration Permits
previously had an expiry date of January 29, 2019. However, on
December 17, 2018, all six Exploration Permits were extended for 24
months to January 29, 2021. This provides sufficient time to enable
the Company to complete the feasibility study and make application
to obtain its Mining Permit for the DASA deposit.
QP Statement
George A. Flach, Vice President of Exploration,
P.Geo. is the Qualified Person (QP) as defined in NI 43-101 and has
prepared, supervised the preparation of, and approved the
scientific technical disclosure in this news release.
The PEA was completed in accordance with NI
43-101, Canadian Institute of Mining, Milling and Petroleum (“CIM”)
standards. The PEA is preliminary in nature and includes Inferred
Mineral Resources that are too speculative geologically to have
economic considerations’ applied to them that would enable them to
be categorized as Mineral Reserves. There is no certainty that PEA
results will be realized. Mineral Resources are not Mineral
Reserves and do not have demonstrated economic viability.
About Global Atomic
Global Atomic Corporation is a TSX listed
company providing a unique combination of high grade uranium
development and cash flowing zinc concentrate production.
The Company’s Uranium Division includes six
exploration permits in the Republic of Niger covering an area of
approximately 750 km2. Uranium mineralization has been identified
on each of the permits, with the most significant discovery being
the DASA deposit situated on the Adrar Emoles III concession,
discovered in 2010 by Global Atomic geologists through grassroots
field exploration. The DASA deposit is currently undergoing a
feasibility program to study shipping mineralized material to Orano
Mining’s operations in Arlit under an MOU signed with Orano in
July, 2017.
Global Atomics’ Base Metals Division holds a 49%
interest in Befesa Silvermet Turkey, S.L. (“BST”) joint venture,
which operates a processing facility, located in Iskenderun,
Turkey, that converts Electric Arc Furnace Dust (“EAFD”) into 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, capturing
approximately 50% of the European EAFD market with facilities
located throughout Europe and Korea.
BST is well underway with an expansion project
to significantly modernize and expand its processing plant in
Turkey. The expansion is targeted to double annual production of
zinc from 30 million lbs to 60 million lbs and is supported by EAFD
supply currently available for processing in Turkey. The new
plant is scheduled for completion by September 2019.
Key contacts:
Stephen G. Roman
Chairman, President & CEO
Tel: +1 (416)
368-3949
Email:
sgr@globalatomiccorp.com
Merlin Marr-JohnsonExecutive VP
Tel: +44
7803 712 280Email: mmj@globalatomiccorp.com
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
Atomic’s development potential and timetable of its operating,
development and exploration assets; Global Atomic’s ability to
raise additional funds necessary; the future price of uranium; the
estimation of mineral reserves and mineral resources; conclusions
of economic evaluation; the realization of mineral reserve
estimates; the timing and amount of estimated future production,
development and exploration; costs 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", “targets”,
"expects" or "does not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates" or
"does not anticipate", or "believes", or variations of such words
and phrases or statements that certain actions, events or results
"may", "could", "would", "might" or "will be taken", "occur" or "be
achieved". All information contained in this news release, other
than statements of current and historical fact, is forward looking
information. Forward-looking statements 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 as of the date such statements
are made. Although management of Global Atomic has attempted to
identify important factors that could cause actual results to
differ materially from those contained in 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 on forward-looking statements. Global Atomic does not
undertake to update any forward-looking statements, except in
accordance with applicable securities laws. Readers should also
review the risks and uncertainties sections of Global Atomic’s
annual and interim MD&As.
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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