Global Atomic (TSX:GLO) - Advancing Uranium Production in Niger

Interview with Stephen G. Roman, President & CEO of Global Atomic Corp.

Our previous interview: https://www.cruxinvestor.com/posts/global-atomic-tsxglo-uranium-operations-rapidly-advancing-to-production-5874

Recording date: 15th October 2024

Global Atomic Corporation (TSX:GLO) is positioning itself as a key player in the uranium mining sector, with its Dasa project in Niger progressing rapidly towards production. As the global demand for clean energy grows and nuclear power gains renewed attention, Global Atomic presents a compelling investment opportunity in the uranium space.

The company is on track to commence uranium production in Q1 2026, a timeline that aligns with upcoming supply contracts and establishes Global Atomic as a reliable producer in the market. CEO Stephen Roman reports significant progress in project development, stating, "I would say the mine is, from my point of view, 75% there." Underground development is well advanced, with ore already being brought to the surface as part of the development work. The company has completed its first large-diameter ventilation raise and is moving on to the second, crucial steps in establishing the mine's infrastructure.

While mine development is at an advanced stage, mill construction is progressing steadily, estimated to be "30% to 35% there." Earthworks are completed, and civil works are beginning, with key components like the acid plant and grinding mill being fabricated and shipped to the site.

One of Global Atomic's key strengths is its strong relationship with the Niger government. The company has received a letter from the president declaring the Dasa project a strategic asset of national importance, providing political security and facilitating smoother operations. This high-level support sets Global Atomic apart in a region where political risk is a significant consideration for investors.

The company's recent equity raise demonstrated strong support from both institutional and retail investors, bringing Global Atomic closer to meeting the 40% equity spending requirement necessary before drawing down on bank debt for project development. This financial backing, coupled with the project's progress, positions the company well for the final push towards production.

Global Atomic is entering the market at a potentially advantageous time. Roman expresses optimism about the uranium market's future, citing factors such as increased demand from new nuclear projects, potential supply disruptions in major producing countries, and shipping issues as contributors to a tightening market. The company is taking a strategic approach to uranium sales contracts, using a blended pricing formula to provide stable cash flows while allowing for upside potential if uranium prices rise.

However, investors should be aware of the risks inherent in uranium mining and operating in Niger. Political situations can change, and the profitability of the Dasa project will be heavily influenced by uranium prices, which have historically been volatile. Additionally, as with any mining project, there are risks associated with construction delays, cost overruns, and operational challenges.

Despite these risks, Global Atomic appears undervalued compared to its peers. Roman notes, "We're trading at 0.2 or 0.25 NAV and most of our peer group's at 0.75, 0.8," suggesting potential for share price appreciation as the company progresses towards production.

For investors seeking exposure to the uranium sector, Global Atomic offers a combination of near-term production potential, strong government support, and leverage to improving uranium market fundamentals. As the global focus on clean energy intensifies and nuclear power gains renewed attention, companies like Global Atomic that are nearing production could be well-positioned to benefit from improving market dynamics.

View Global Atomic's company profile: https://www.cruxinvestor.com/companies/global-atomic-corp

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