Global Atomic (TSX:GLO) - Ramping Up Operations in Uranium Bull Market

[Music] good morning my name is Steven Roman I'm the president CEO of global Atomic and uh lovely to be here with you Matthew and what good to see e you know it's nice to get out and about and you're out and about in the continent of Africa uh so we're down here in Cape Town at the moment um you're here to see a few people um has the conference been conference has been jammed um it's a zoo out there it's a zoo it's like over 8,000 people here at the conference we've had the backtack meetings and I just got back from Niger so effectively I've been there and for the last two weeks y finished my my trip in Niger and came to Cape Town so uh I've been on the road here for a month yeah and it's been very productive taking care of business in the absolutely taking care of business down here okay um so I'm sure you're meeting all The Usual Suspects and you know and I think a lot of the ministers are down here as well aren't they from the various governments uh as well so real business happens down here in in in Cape Town for sure absolutely um I think we can talk about the macro but I think it's kind of been done to death we know it's fantastic um and and we did that at the end I'm interested in operations what's happening on the ground with you guys at the moment okay uh well that's a good point uh I was under ground last week so we're down at the ore Zone I actually saw the ore and uh it's looking good the ramp is we're probably 800 meters now um and um starting toh develop on ore so that that process is going very well we've got 275 people on site right now we've got a a big Camp expansion happening so in the next uh few months we'll have that probably up to about 500 people okay uh Earthworks we're just letting the contract on that so we're going to start that here in probably the next few weeks soon as all the equipment arrives and so that's the first phase of getting the the plant built is get the Earth Works done here over the next few months and then the civils come in so civil contracts now are under a review for award yeah uh long lead items have all been ordered they're in fabrication right now so I would say probably by Q4 you're going to start having the equipment arriving for the plant okay so by then you'll have earthw Works done civils done um and the plant materials arriving so right and of course during the buildout process uh the the employment will go up to probably in the neighborhood of 7 to 800 people there on site so it's it's a big big project uh definitely the biggest one ongoing in Niger right now yeah um it's uh it's got very high visibility uh both on the side of the Niger government but also other players like uh the US government of course that's got a big interest in Niger I had a very good meeting with the new US ambassador there yeah Kathleen Fitz Gibbon and uh she's very excited about the project of course we're getting financing from the US as well as Canada and that project now uh is uh expected to go to credit committee this month we were talking about January but it's probably going to be February going to credit committee and then uh final board approval in probably April what sort what sort of credit were we talking about this is the 6040 debt Equity deal so uh you know we've been financing everything with Equity at the moment uh so our our component will be 40% of the project project let's say round number is 400 million us projects that includes your working capital interests at the banks charge cost overrun facility the whole thing okay so um yeah so we have to pay of course 40% of that and the banks pay 60% okay well let's just get into say the the we here that because you've share price been eratic because volatile volatile volatile it's some unex but yes um you've had everything thrown at you force mayor and man-made we've had earthquakes we've had coups and you are getting on what what I've just heard from you this is real you you this is happening on the ground where 27 plus people moving up to 500 moving up to 800 it it's real you're getting on with us okay so I I think and it's kind of refreshing after talking to lots of exploration companies all the time especially the new ones are just starting out on a journey um to kind of feel that something's actually getting built right but what I want to know is that how it gets over the line okay because I know what you're doing you talked talked about the civils coming in ETC but it needs money to do that so with the G and that's been a journey for you because of all the things thrown thrown at you from the side um curve balls you've raised a a bunch of money now you talking about the credit facility which to create you are going to need to raise this in a 40% contribution in some way shape or form can we talk about the mix there what's available to you does turkey help contribute towards that anytime soon either by selling that for for selling that annuity stream or cash coming on or do you we need to just look at the equities market and how simple is it how complicated is it um so what what I've obviously been preaching over the last couple of years is that we try to keep dilution to a minimum and that's still the the Mantra we have so uh you know we've got three contracts now with big utilities we have a number of others in the wings that we're working with right now we still have prepayment options on the table okay so I've received a couple of those sometimes the terms are a little bit honorous uh we don't want to do things with owner as terms so you know we're we're working on on that angle still with a couple of groups that are interested in that of course with the uranium Market very tight there's new players in that space and there's even Financial players that just want to secure some Supply yeah um so you know it it's sort of broadened the the market a little bit for prepayments you don't have to always get them from a utility sometimes you get them from other players yeah so you know these are things that we're looking at we'd like to keep the delution to a minimum but I I'll tell you that even with that uh Capital requirement that we have we've already spent at least half of that yeah so I still think that not that Delta that we have to cover is going to be in the 50 to 75 million us range which if you get a couple of prepayments for 25 million each yeah uh there's 50 million that you don't have to raise in the market yeah so you know what we're still moving forward we got a bunch of catalysts here we'd like to get over the line so one of them and it's very important is the updated feasibility study so that should be coming out this month in February okay um and of course that includes all the drilling that we did 16,000 M yeah that's going to of course increase uh the line life M and uh have an impact on the overall npv and irr of course uh when we did our feasibility that came out in 2021 we were using $35 a pound yeah so now of course we've upped that price because 35 is not not realistic anymore I mean our contracts are obviously well above that and so we're going to use a different number for the new feasibility but also include uh an upgraded minable Reserve yeah I see I I don't think people mind well I hope if they're if anyone intelligent shouldn't mind about whether the the cost of G of course they have it's a new reality in mining it's the margin it's about how much money you make and obviously in a very tight market and tightening market and we'll come on to this in a second in terms of who gets into production where the hell this Supply is coming from um that that margin and that gap between what cost and what you're going to get is going to increase we we've not seen term contracts catch up with spot people getting excited about spot right and if you are a kind of company um that wants to just sell in the spot Market well that that's great maybe some lessons to be learned from previous cycle but maybe people feeling a bit Brave now because a slightly different Market um with the contracts that you were looking at I mean they've obviously got they''re kind of' got bells and whistles tached them in terms of the flexibility there it doesn't will it restrict how much does it restrict your ability to make that margin as the price goes up okay so that's a good question uh the first point is that we had to get a minimum amount contracted to keep the banks happy y because they have to know they're going to get their money back so the first two contracts are a blended price base case midterm long-term so uh right now they'd probably be close to the $80 range uh the last contract is floating okay so it'll it'll capture spot okay so the idea is in in a balanc portfolio of of uranium sales you want to have a little bit of a mix and then uh you you don't get caught off guard right okay so that's that's what we've been working on that's our strategy is to have a blended portfolio right okay and and then when you kind of layer in they can afford sale components that's it and say it is is it's a much more dynamic the forward sale thing I think you know perhaps it was a buyers market and now I think very much a sellers Market in the context what we just just mentioned we alluded to was the fact that there ain't too many new positioners coming online anytime soon you seem to be the most advanced you you that you're doing the earthor you're getting the civils you got people on the ground does that help you in your discussion the fact that well I'll tell you that we we we are the only green fields uranium product project right now in the world um one I love it one yeah the the others are are restarts typically uh which is which is fine I mean but even they having problems right sure well there's big problems because for plus one decade uh you know nobody was in the uranium space a lot of talent has gotten old and left the business and there's just no people and no expertise so you know people have asked Cal why don't you expand your production you got lots of uranium they said well we can't we don't have anybody to do it yeah I mean there's just a shortage yeah so that's the other thing that's a benefit of us is we've got a full operating team yeah different mining as well we need to point that out well it's underground mining it's the same as what Colac was doing north of us so we have a lot of expertise from there and of course we've done a broad range uh recruitment plan in ner and we ALS also now are establishing a mining School in agadas so we'll be training young people that that like to be in the mining you also think benefited from the fact that French have been thrown out of country and people like Iran you know let's be candid uh there's a lot of people with a lot of skills there are a lot of people with a lot of skills because Niger was the fifth largest producer and they been mining uranium for 50 years right generational experience yes exactly okay so um let's say the the fact that this is the only Greenfield site new Greenfield site in the world at the moment it puts you in quite a strong position because it's clear that you're going to be nearer to producing at the time when people are running out of the stuff us utilities mitted to have about two years worth of inventory across the board right some will have more some will have less Etc uh Europeans maybe slightly slightly more so for the North American Market which I I suspect they'll be looking to you and saying well Hang on we're all in it together we're we're your neighbors um they are doing what they they you talked about the kind of the um fact you made met the US um Ambassador Ambassador uh in country um are they signing up to you are they making other plans in country because I it's kind of a very fluid situation at the moment with the government no no I think I think well first of all the Niger is is viewed as a a good um let's say central location right for America to have a some sort of foothold in Africa well they got an army base there is a base there right uh but uh they're very supportive of the project and they're they're they're talking to the government about the fact that listen you you want to attract foreign investment I mean you need foreign investment in the country here's a big project we're backing the project right you need to back the pro project and of course they have they are backing the project yeah from a point of view of you know it's business as usual for us there we've got lots of I mean 98% of our Workforce are all local people yeah so I mean it's a huge employer and uh business is usual is a good phrase to discuss because obviously off the back of the C seems so long ago now and and I know I've always been as and I've worked in countries when there have been cues I think it's so for me I was going to view as a sort of transition of government E people people have spoken right and and like I mean over 0 since the 1950s like it it's a thing that happen um I'm not saying it's necess good or understood by Democratic societies but um is it does the B the country does carry on country has to carry on you've got almost 30 million people there right so what what when you say business as usual is it carrying on how has it affected your business well uh right after the coup we sort of went on a a hold mode because all the borders were shut yeah so then when they reopened the borders uh particularly with Togo and Burkina Faso that supported nir um all of the goods now have moved from cot new Benin yeah to L okay Togo Bina Faso just different Roots needed to estblished root now the the the issue there is that it takes longer uh so we you know it was a very wellestablished route to through Benin and to the port of codu you could is is that border still shut the border is still shut yes with benine right not with borcina they sided with the French they sided with the French okay okay holding grunes yeah okay so I don't know when that border will reopen obviously that's going to uh depend on what the internal politics dictate however um we restarted on the 1st of December all our operations uhhuh and we're in full mining mode there at the moment right okay okay interesting okay so um it always sorts itself out you know as as you says the molecules move different ways that kind of end up where they need to be somewh more efficient than other I like that molecules moving right he's a smart man um much quoted um okay so so what I'm hearing is that it is business as usual taking slightly longer to kind of get stuff to you but once the process starts then you're kind of the timelines have adjusted slightly but you are carrying on with the operational buildout yes um the funding is something that obviously you were thinking about every day and I think the market is moving in your favor every day as the market gets Tighter and Tighter and Supply people are questioning where the heck it comes from um and that you are as we've always said you know the first cab off the rank when it comes to that KN new production as well is there anything else that you you guys are sort of wrestling with at the moment or do you feel a you know bit more in control now that they kind of the C components over turkey's may be starting to well turkey of course last year was a bad year because we had two earthquakes and many of the steel mills were shut down so we we probably put through uh 50% of what we normally would put through yeah um Q four and right through till now we're running full yeah so I think most of the Mills are back up maybe not up to 80% capacity yet but 2024 should be a profitable year in Turkey for us okay um you know the biggest issue in in Niger that I feel uh we have to deal with our Logistics okay just moving materials when you're building a plant and getting all that stuff on time at the site there are business issues right I'm comfortable those are business issues and those are Logistics issues and we are working those out yeah so I'm fine with that and you know because it's and know times money and all of that but it ain't force majure and it ain't people going to war things that are stop businesses and and their tracks this is just a right we need to reorganize and rethink of the legistics for now and hopefully things are back to the original plan because it's slightly more efficient that's not a problem for me into a kind of first mover Advantage situation for you guys you know was is where we always thought you would be um so yeah so it it's tough mining isn't it the mining is very tough and it takes a long time and I think that's what politicians don't realize is that you know they want to Green the planet and have all these grandio ideas yeah but how do you get there and nobody's thought about it like I've been in Niger now almost 20 years yeah we discovered Dasa in 2010 yeah it's now 2024 yeah we've gone through difficult periods post Fukushima we kept the whole thing going there's 10 years right there in the back was stop everything 10 years like but but we kept it going yeah to the point where we are now so you know what we've lived through some pretty rough times here and uh I'm not saying it's gotten any easier but for people out there they need to realize the you know the the investor the public yeah uh just to get a sense of reality is how long it takes to bring on new production of of any metal yeah and of course now there's a requirement for many metals yeah and it's just not going to happen I I like that and I think people are starting to get that dose of reality and it's always something that we've we've we've strived for people to like be be be real you know it's it's fine being a gold bull or a silver silver bull or uranium bull but there's a reality to doing business and mining's tough at the best of times and there's lots of hurdles to get over and lots of fire put out every single single day but and and what we've seen recently which I think kind around that home is when you got someone like kazas on Prom we saying well actually guys we're going to be about 9 million pounds short of what we thought we were in 2024 sorry about that that's the world's number one producer of uranium saying actually we're hitting some technical issues here we've had line of sight to all of this sort of stuff but there's nothing we can do about it right and the same with kamico as well they're saying well actually this restart think a little bit harder and a little bit longer um to do so goodness know only knows what's going to happen with some of these new wannabe producers especially in Canada especially in the US where we're talking half a million you know lots of little half million pound pieces of production here and you guys are what out of the gates four and four and a half so way more than the whole of the North American production anytime seen it it just kind of shows the context of how much more uranium I want all the uranium projects to work because we're going to need all of the uranium will so this is why I've never sided with one company or other but I just recognize I hope people recognize that it's going to take a lot longer than you think yeah well the great thing is is that uh the world I think has finally adopted nuclear power so it's it's definitely we're into a different era here I think with small modular reactors there's hundreds of orders for smrs now yeah uh there's going to be a decision on which technology will be the lead and there'll probably be a few companies that are going to be supplying these yeah but uh you know the it's great that we're going that way to have clean reliable power yeah but at the end of the day you need fuel and everybody forgot about the fuel side of the equation it's okay I've we've solved it I saw something the other day which was just brilliant so it was a kind of uh a layby had two electric chargers for electric cars bring your Tesla here and a big kind of C container device where the power came out of um middle of no powered by a diesel generator so right there folks that could be your only challenge I think in the next few years electric charging points powered by diesel fuel green all the way it's too funny is it is funny it is funny what what we doing out there folks just because you call it green doesn't make it green Nicholas The Way Forward um good see manate uh enjoy yourself the rest of the TR thank you um you're cracking on it's good good to see we're cracking on and uh we have uh first shipments of yellow cake scheduled to go out in q1 of 2026 now we've told the market we're six at 12 months delayed we want to keep on to that schedule the utilities are on side and so we're supposed to start shipping early 26

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Id: tqEoAnN4IrQ

Length: 23min 15sec (1395 seconds)

Published: Sat Feb 10 2024