Interview with Stephen Roman, Chairman, President & CEO of Global Atomic Corp. (TSE:GLO) Roman gives us an update on the Dasa uranium mine plan and talks about cash flowing from the new zinc processing plant in Turkey which will enable the development of the uranium component. In 2018 the Turkish operation was EBITDA $13M ($10M profit), this doubles under the new set up to $20M.
The exciting element for investors though is the development of Dasa and the economics around a new mine plan. The Flank Zone (not Western flank as Matthew says at one point) is higher grade at near surface which may allow the company to get in to production economically at low spot prices. Roman talks about Global Atomic needing to advance and expand their PEA that mentions an alternative mining scenario that is in a persistently low uranium environment. The company looks like it is shelving the large project idea and focusing on a high margin project at realistic prices and getting in to production quicker. That model and that kind of thinking is the difference between Global Atomic and some of their peers. It is of course enable by the cash flowing from the Turkish zinc project. Roman suggests that 2020 could be the year that dramatically changes the company profile.
So on the back of beer mat type numbers from the data available:
Phase 1 mine plan for 3.4Mt @5,450ppm (11lbs U308 per tonne ore). Mine for 10yrs, producing 3.7Mlbs per annum on average so 37Mlbs in total. This also opens up the rest of the ore body.
Let's use c.$200M CAPEX at $40lb flat, gives it a c.25% IRR and NPV c.$150M.
Trucking is not without its problems, but if Global Atomic trucks to Somair, reduces CAPEX to c.$100M, IRR rises to 45% and NPV goes to c.$180M. Even at $30lb, trucking still gives c.24% IRR and an NPV of $70M. This is not out of the question and possibly what management is working towards.
Interesting times ahead. Let's see if this experienced uranium team can deliver or if the markets intervene.
And a CRUXinvestor mug for the first person to guess the song with the lyrics in the Title above and leave in comments section. Need song title, name of artist and the year.
We Discuss:
1:38 - Base Metals Division in Turkey: An Update
3:45 - Cash-Flow Possibilities
4:43 - Optimisation and Moving Forward: What Does the Future Look Like?
7:50 - Looking into Grades: Do They Stand Out?
8:23 - Anticipating the January Announcement: What's to Come?
9:29 - West Africa: Anything to be Concerned About?
Company page:
Make smarter investment decisions, subscribe here:
For FREE unbiased investment information, follow us on Twitter, LinkedIn and Facebook:
Take advantage, hear it here first:
0 Comments