"Global Atomic has two very solid businesses that we feel are going to do well in both the near and long term. Zinc is a very valuable metal that is used to galvanize steel and augment soil fertility – with robust demand forecasts for both uses."
Can you provide an overview of Global Atomic Corporation’s dual focus in Niger and Turkey?
Global Atomic Corporation is a Canadian company trading on the TSX that is advancing the high-grade, large DASA uranium deposit in the Republic of Niger. The DASA project has a resource of 250 million pounds uranium and is in the middle of three existing plants, with excellent access to infrastructure. In addition, Global Atomic benefits from the significant dividend stream generated by its share in the Befesa Silvermet zinc concentrate production facility in Turkey. We are differentiated from other junior companies in that we have a positive cash flow and second, we have a project that is large, high grade and can be permitted very quickly.
What is the timeline for development for the DASA uranium project?
The permitting window in Niger is four to six months – as long as you provide a feasibility study and an environmental impact statement, both of which we are currently working on.
Can you elaborate on Global Atomic’s recently expanded zinc processing plant in Turkey?
Befesa Silvermet acquires electric arc furnace dust (“EAFD”) from steel mills and recycles the EAFD through its Waelz kiln to produce a high-grade zinc oxide concentrate which is sold to zinc smelters throughout the world. We just commissioned the new plant in Turkey, which had been shut down in 2019, so we could complete the construction. Global Atomic’s EBITDA from 2018 was US$13 million, and the new plant should double that in 2020 as it has twice as much throughput.
How do you view the fundamentals of zinc and uranium pricing?
The trade tension between China and the USA has affected base metal pricing including copper and zinc, and Chinese exports to the United States are down 25%. Zinc is trading at around US$1/lb, down from a high of US$1.50 a year ago. I expect construction will recover providing relief to base metal prices. Once things settle, the price should start rising to US$1. 10 or US$1.20/lb.
I think the uranium market will stabilize and start to move up as utilities that have been accessing the secondary market start seeing reserves dry-up. The Kazakhs have started a new marketing project and taken Kazatomprom public. Clearly, it is in their interest to increase the value of their asset. Between the Kazaks and Cameco, the two biggest producers, they have cut back some production to stabilize the market. Being a lower quartile producer we can weather lower prices and when they rebound we should be making a lot of money.
Where would you like to see the company by the end of 2020?
By the end of 2020, we would like to have the mining permit process complete so we can move ahead with construction of the DASA mine. Once we have the capex nailed down, we could leverage the cash flow to raise financing, as we would like to keep share dilution to a minimum and expect to have sufficient capital to go through the feasibility study process. In Turkey, we expect to see greater revenue now the new facility is up and running and would also like to have debt related to the plant completely paid off.
Do you have a final message for the readers of Global Business Reports?
Global Atomic has two very solid businesses that we feel are going to do well in both the near and long term. Zinc is a very valuable metal that is used to galvanize steel and augment soil fertility – with robust demand forecasts for both uses. Specific to our project, Turkey is the second largest steel producer in Europe, the eighth largest in the world, and gets 80% of its material for production from scrap. We have excellent access to steel mills in the vicinity that supply our feed. A high-grade zinc producer in Turkey is excellent from a business case.