Global Atomic issues update confirms on the progress of its Dasa project
Global Atomic, under the leadership of President and CEO Stephen G. Roman, provided an update on the progress of its Dasa project. The company’s current cash position allows it to continue project development on schedule, and bank financing is also progressing.
Global Atomic has been advancing the ramp access to the orebody and has started placing orders for long-lead plant equipment. They have already established a full in-country mining team comprising experienced miners and trainees from nearby villages. The ramp development has surpassed 325 meters and is expected to reach the top of the ore body in the fourth quarter of 2023.
The company is pleased to report that mill equipment costs align with their previous feasibility study (FS) estimates, which were calculated during a period of high inflation for equipment and shipping costs. These costs have since declined to near pre-pandemic levels. Furthermore, the estimated cost structure of the Dasa project allows for profitability at a uranium price of US$35/lb, with an internal rate of return (IRR) exceeding 44% at the current spot price of over US$50/lb.
Off-take agreements
Global Atomic has signed two off-take agreements with Western utilities at favorable prices, and they anticipate additional off-take agreements to materialize as they continue to de-risk the Dasa project. Positive discussions at the recent World Nuclear Fuel Cycle conference in The Hague have bolstered their expectations in this regard.
The revised FS for the Dasa project, Phase 1, confirmed a reserve of 4.1 million tonnes grading 5,267 ppm, amounting to a total of 47.2 million pounds U3O8. The mine schedule for Phase 1 spans 12 years, with a production throughput of 1,000 tonnes per day, resulting in the production of 44.1 million pounds U3O8. The estimated cash costs, including royalties and off-site costs in Niger, are projected to be US$19.02/lb U3O8, with an all-in sustaining cost of US$22.13/lb U3O8. The initial capital expenditures are estimated at US$208 million.
Based on a U3O8 price of US$35/lb, the after-tax net present value (NPV8) for Phase 1 is calculated at US$147 million, with an after-tax IRR of 22.3%. At a U3O8 price of US$50/lb, the after-tax IRR increases to 44.4%, and at US$60/lb, it further rises to 56.9%.
Global Atomic signed a definitive agreement with a second major North American utility on May 8, 2023, formalizing their previously announced Letter of Intent from June 2022. This agreement secures the procurement of up to 2.1 million pounds U3O8 from Dasa within a multi-year delivery window starting in 2025.
The company is currently in the process of completing a revised Mineral Resource Estimate (MRE) for the Dasa project, incorporating results from a 16,000-meter drill program initiated in late 2021. They have also selected long-lead items and are in the process of ordering them.
Global Atomic expects its banking syndicate to finalize a term sheet by the end of the second quarter of 2023 and approve the debt facility for project financing before the end of the third quarter. Once project financing details are announced, additional uranium sales contracts with international electric utilities are anticipated. The company plans to release an updated MRE in the second quarter of 2023, followed by a revised FS in the fourth quarter of 2023.
