Global Atomic Corporation (TSX: GLO) – The Largest High-Grade Uranium Sandstone Deposit on a Global Scale (Transcript)

Global Atomic started in 2005 and focused on Niger, which is one the best performing regions for Uranium outside Kazakhstan and Canada. By 2007 they had tied up 6 assets and have developed 4 of them before settling on their main asset. The Uranium development has been supported by their share of a Zinc producer in Turkey. Last year they rebuilt the plant to almost double the production. This has been highly attractive and has allowed Global Atomic to grow the Uranium business whilst others have struggled.

They have a highly experienced Uranium management team who has produced and sold Uranium in to the market. We think this is critical to the success of any junior Uranium company. Not many junior companies can claim to be end to end and that is why so many fell over in the last cycle.

Stephen Roman tells us about doing business in Niger. The area that they operate in has been a producing Uranium for over 50 years. They have done 140,000m of drilling so have good picture of what the deposit looks like. Stephen talks about the grades and size of deposit which is the largest high-grade sandstone deposit in the world. 250Mlbs at today’s price of $25 is c.$6Bn. Stephen talks about the economics of how much it will cost to get it out of the ground.

Interview highlights:

  • Overview of The Company
  • The Turkish Asset
  • The Management Team, Their Experience and Roles
  • Running a Business in Niger: Government, Obstacles and Advantages
  • Getting into Production: What Do They Have? What Does The Timing Look Like? What’s Their Strategy?
  • Why Should You Invest in Global Atomic?

Click here to watch the interview.


Matthew Gordon: So you going tell us about the Global Atomic story. Why don’t you give us the 1 minute summary and we’ll pick it up from there.

Stephen Roman: Global Atomic started with an ex-partner at Denison Mines, Clifford Frame, back in 2005. And we were out basically looking for Uranium around the world. Our background with Denison Mines, of course, one of the biggest producers in the world was started by my father, as a matter of fact. So we got that going. And at the time we wanted to look in Niger because Niger is a producer, it didn’t have a lot of international investment. It had been tied up by the French for many years. My associate, George Flach, who I’ve worked with for many years, was in Niger at the time working on a Gold project. And I called George and I said is there any Uranium potential properties that we could start doing exploration on? And he said, ‘yes, you should come over. The government is just opening up the the doors for foreign investors’. So we went over in 2005 and by 2007, we put together a nice package of six really high profile properties, started our exploration program. So since then, we’ve developed four Uranium deposits there with one major discovery called Dasa that we discovered in 2010.

Matthew Gordon: So we’re going to get into that in a minute. But you’ve also got operations in Turkey.

Stephen Roman: Turkey, yes that’s another company Clifford and I started in 2005 at the same time to actually look for base metals around the world. And we ended up in Turkey on a primary Zinc deposit. And then the crash of 2008 happened, financial crisis. So we didn’t want to leave the country empty handed. So we found a shutdown plant in a place called the Iskenderun right on the coast of the Mediterranean. And it had been processing electric arc furnace dust. So waste from steel mills. And so we bought that plant and refurbished it, got it going again by the end of 2009. And it’s been making money ever since.

Matthew Gordon: It has been making money. And I think that’s one of the attractive features that investors of Global Atomic are looking at. Is the fact that this thing is quite a simple process in many ways. And having looked at the economics, it’s quite profitable.

Stephen Roman: It’s very profitable.

Matthew Gordon: Talk about some of the numbers that because I think it has a big impact.

Stephen Roman: Last year our EBITDA was $13M, and we have currently at 49% share, we’ve turned it into a joint venture. So because that wasn’t our primary business operating a plant like this, it’s a 56m long kiln that’s like a cement plant. You put the waste in there with some feedstock, coking coal, et cetera. And you volatize the Zinc that’s left in the waste and then you condense it and you make a very high grade Zinc concentrate. Running at 70%. Our biggest customers are NyrStar and Glencore. So we ship right out of our own port facility in Turkey that we have with the steel mills there and ship this concentrate to Europe.

Matthew Gordon: So the presumably the 51% shareholder is local?

Stephen Roman: No, the 51% shareholder is the world’s biggest company in this space. It’s a company called the Befesa Zinc. They trade on the Frankfurt Stock Exchange. So we brought them in. They were always interested to get into Turkey. And the fact that we were already there operating and we actually accelerated their plans to get in the country. And they didn’t have to do stand alone that would have taken five years. So they came in and they paid us to buy into the project. And we agreed to make them operator. And so now we have a very, very good joint venture with them.

Matthew Gordon: And what’s that throwing off for you?

Stephen Roman: In total our share was $13M. So out of $49M. So let’s say $26M-$27M total EBITDA last year. Now what we’ve done in 2019 is we shut the old plant down. We completely demolished it and we built a completely new plant, that’s now running. So within 6 months, we tore down an old plant, built a new plant. And so this is now doubling our capacity from 30Mlbs a year of Zinc to 60Mlbs a year of Zinc production.

Matthew Gordon: When does that pay back?

Stephen Roman: That pays out in about eight months.

Matthew Gordon: And then it’ll be free cashflow after that?

Stephen Roman: That’s right.

Matthew Gordon: What sort of quantum are we talking about in terms of the free cash flow component for you?

Stephen Roman: That’s 60Mlbs at $1 per pound, that USD$60M a year. Your costs are going to be in the 30%-40% range. The rest is free cash flow.

Matthew Gordon: And net contribution… So you’re not running or operating that business. It’s something that you started, you monetise and someone else is operating. Sounds smart to me. It’s throwing off cash. What are you gonna do with that cash?

Stephen Roman: Well, so what we did. That was in a company called Silvermet. Started by myself. Global Atomic was a private company. So between George Flach and myself, we raised about $60M from this company. And we really use that to develop the big Dasa project. So what we needed is, of course, liquidity for our shareholders. So we decided since nobody really cared about a small Zinc recycler, we would merge the two companies. So about a year ago, we merged them and gave everybody liquidity. We gave the Silvermet shareholders a big asset in our Dasa project, and gave the Global Atomic shareholders liquidity on now the Toronto’s senior board, Toronto Stock Exchange. But also the cash flow from that Zinc can help us develop the large Uranium asset.

Matthew Gordon: So I think that’s well understood. And that’s when you even took on free cash flow position there is obviously a lot more around. Can we talk about Global Atomic? I want to get into the detail of it. It’s in the Uranium space in Niger, which is a very well known space for Uranium.

Stephen Roman: One of the largest producers.

Matthew Gordon: Absolutely. And high grade for Africa. Let’s talk about the team. Because I’m a strong believer and strong advocate that the team needs to know what they’re doing. Be able to talk about what they are doing, be able to deliver that. Who’s on the team? Who have you brought on board?

Stephen Roman: George and I really got things going. George is a professional geologist, has been working in West Africa since the 80s. We started working together in Ghana on a Gold project that Denison and I had in 1985 called Bogasu. The fact that I my roots are with Denison Mines, I had a lot of talent from there that actually came and joined us. So now one of our prime consultants is a mining engineer, Royal School of Mines named Fergus Kerr. He was running all Denison’s operations in Elliot Lake.

Matthew Gordon: So he’s got Uranium experience?

Stephen Roman: Big time.

Matthew Gordon: So he was the guy you brought in.

Stephen Roman: And we brought in another guy named Dr. Peter Wallenberg. He was the head of Areva’s Uranium department in North America. So Peter is a geologist and he was credited with the discovery of a number of uranium deposits. One of the big ones is in the Northwest Territories and Canada. So he is also on our team working with us. Then we have people in Africa that have been there working with us and with George, some senior Uranium geologists that are part of our team in country. And then we have our CFO, Rein Lehari ex- PriceWaterhouseCoopers (PWC), that has been involved in the mining business for a long time. And finally, the last gentleman I can name here as part of our team is is Merlin Marr-Johnson. He’s a geologist. He’s worked with many companies, mineral companies, exploration companies, and he’ll be our London liaison. And helping us with our feasibility process and management who aren’t based in London.

Matthew Gordon: And who of that team actually manages the in country relationships?

Stephen Roman: George Flach is our VP of Exploration. He’s also a Vice Chairman of the company. But he spends a lot of time in Africa. He lives in Africa. And so he manages that. Merlin is now helping him with that whole aspect as well. And so what we’ve done as a foundation with a couple of individuals, of course Clifford Frame was a mining engineer and he was the President of Denison Mines. We put together a real core team. And as we move along and complete feasibility study, we add to that team as we go forward.

Matthew Gordon: I need to kind of point out to people here is the importance of what you just said, because I would say mining is tough. Uranium mining, that’s a whole other ball game.  If you haven’t done it before, it’s a case of you don’t know what you don’t know. Because not only has it got all the mining risks associated with it, it’s also got all that geo-political risk to it, regulation around it, safety etc… And so you need to been through that to understand what you’re getting into. So if you’re making investments, you need to consider if you think this team understands what it’s doing. So that’s a big deal. You’ve deliberately gone about putting a very well versed and experienced Uranium team together.

Stephen Roman: Absolutely. I started working underground as a miner at Denison at 19. So I’ve been in the Uranium business most of my life. Denison was the biggest Uranium producer in the world from Elliot Lake. My father built the town there and we employed thousands of people. Our big customers were initially the Japanese, various utilities there. TEPCO was one of our biggest customers. I was involved with the price negotiation, sales on Uranium, mining Uranium, exploring for Uranium. So we’ve been in this business a long time. And then the big contract we made was with Ontario Hydro, for 126Mlbs. It was one of the biggest contracts for Uranium ever in the world.

Matthew Gordon: That’s amazing. So what I’m hearing is that you put a lot of store by having the right team of people who’ve been there from exploration and actually selling product and market. I would argue from what I’ve been hearing over the past few days, in the past few months in speaking to Uranium companies. Getting out of the ground is difficult. But that’s where that’s where the difficulty actually gets even harder from there. Getting it into market, on time, buying cycles. Understanding logistics and physically moving Uranium around the world and getting it to where it needs to be and all of the cost issues, because you don’t necessarily get paid the second it comes out of the ground. Managing that is quite complex. So it sounds like you’ve got a team and that’s what they’re doing. But let’s let’s get into the project itself, because I want to understand your impression of Niger. Doing business there. How are you gonna go about doing it? What are the barriers? What are the things that you’re seeing that you’re dealing with to be able to do business in the Niger? Tell us about the country first?

Stephen Roman: As I mentioned before, we’ve been working in West Africa since the mid 80s. And we’ve got a lot of experience in all the West African countries. Niger is primarily desert. So from a point of view of logistics, it’s quite easy to get around. We happen to be located in an area called the Tim Mersoi Basin, which is like the Athabasca Basin in Canada. It’s got good infrastructure. So that’s that’s a good thing. Well, highways, power lines, towns. There’s there’s the main core production for New Year comes from the Tim Mersoi based. And so around all mining formerly called Areva started mining there in about 1970. So the two mines that they, Cominak, and Somair have been running that long, our deposit is located just about 100 kilometers south of those two mines. Then we have another mine operated by CNNC, the Chinese National Nuclear Corporation bought one hundred kilometers to the southwest of us. So we’re in an area that’s very well known for uranium mining. We we’ve particularly zeroed in on that area because obviously good geology and the fact that we did have interest.

Matthew Gordon: So why haven’t the French picked up this land package.

Stephen Roman: Well, the French owned all of this land. But because of what happened in 2005 with the government effectively telling the French, ‘listen, we’re not going to allow you to own the entire basin’,.

Matthew Gordon: And just sit on it.

Stephen Roman: And sit on and land bank it? So we want other companies in here. We want other companies spending money, developing projects. So we’re gonna leave you with eight concessions and we’re gonna divvy up the rest to people that are interested. So that’s what we picked up our six.

Matthew Gordon: If I look at the Athabasca, it based on the stories we’ve heard, there are some great stories and amazing stories. High-grade, fantastic, but some very deep assets. That adds to costs. Can you describe the base in here and where you sit on that and why you’re saying it’s a great place to be?

Stephen Roman: We we went to an area that had previous work done on it by the Japanese. We developed as a surface deposit.

Matthew Gordon: Meaning he inherited data from them?

Stephen Roman: The areas that we picked up were known to host uranium. So there had been limited amount of work. There were outcrops. There were drill holes. There was data available. So we went through all of this data and we picked the areas specifically that were exciting. When we went into follow up on some of them, we found deposits that could be exploited. So we did a lot of drilling on one of our concessions. But it was it was a typical lower-grade African surface uranium project. We were looking for something bigger. We’re an elephant country here. So we followed our nose. We did a lot of prospecting on surface, hand Geiger counters walking across the ground and beside one of our other projects called Dajy, about a mile away. We found a blowout. It means that from down below. Something has percolated up a crack. It’s left a blob on surface. And that blob in surface. The Geiger counters went crazy. So we took this material, brought it to Canada, assayed it. It was running at 30% uranium. So we said holy smoke. This is this is something unseen in Africa. We need to start working around this area. So we laid out a drill program. And we outlined a lot of lower-grade material like a halo around this blowout. And it was going down to about 20m or 30m and it was a reasonable amount of uranium, but the grades weren’t there. So we said, where is this coming from? In Niger, they had a preconceived notion that when you got to a volcanic to horizon in your drilling called the event formation, they stopped drilling because they said there’s nothing below it.

Matthew Gordon: So what sort of level are we talking about?

Stephen Roman: That was probably 50 or 60 metres down. So we said, there’s gotta be more to this story. So we said, ‘we’re going to forget about what all the local geologists think and what the preconceived notions are, where we’re going to drill through this Abinky’. And when we drilled through this Abinky, we hit the mother lode. So this a Abinky had created an impervious cap. It’s on top of it a mudstone. So a down faulted block, covered the mudstone and Abinky. It totally sealed this deposit from the surface, except for that little chute.

Matthew Gordon: So you’re able to paint that picture of what was looking like underground quite easily as a result.

Stephen Roman: Yes. So we’ve done about 140,000m of drilling. We did the shallow drilling, but we also drilled right down to about 700m. So that whole graben. And now what we discovered, it’s got a large deposit sitting under that Abinky formation. That is spectacular. So far we’ve drilled off about 250Mlbs. We’ve got grades in it running over 20% uranium. We’ve got large areas that are running at 1% to 4% uranium. But overall it’s just a spectacular deposit.

Matthew Gordon: It’s more significant than most other Uranium deposits in Africa.

Stephen Roman: This is right out of Peter Wallenberg’s mouth. It’s the largest, highest-grade sandstone hosted Uranium deposit in the world. This is this is quite a statement. And he said that at a PDC talk where he had the room full of people and very technical people.

Matthew Gordon: Let’s qualify that. Because we’re trying to educate our audience about uranium and which investments to look for and why they should look at certain companies, not others. So most people understand the Athabasca. Very, very high grade deposits there. You’ve got Australia, you’ve got Kazakhstan, you’ve got Africa. They’re all slightly different deposits with their own attributes and their own negatives to in a sense some people are pro-mining and some aren’t. And some are not necessarily free trading, as it were. But what exactly do you think you got here in Niger? It’s one of the better regions for African uranium mining. But what do you think you’ve got if you got a numbers that you can share?

Stephen Roman: Just to give you a bit of a numbers on our project. So we have currently about 250Mlbs in the Dasa deposit. If you take it at the current metal price about $25 a pound. That’s about $6.5Bn metal value sitting there at the moment. So that’s a big number.

Matthew Gordon: There’s a big chunk $6Bn-ish number which is great. But 1, you need to be able to a mine economically.

Stephen Roman: That’s right.

Matthew Gordon: And 2, I think the obviously the whole market is hoping that the uranium price recovers. And then you’ve got to work out what you can get out of the ground for at the point you just want to go back into market. So all of the usual mining rules apply there. But that’s a big number is still a big number you’ve got pounds in the ground.

Stephen Roman: Yes, absolutely. And, it all boils down to economics. So I think the Dasa stands out in that regard, because the mineralized material comes right to the surface. We can start mining right from the surface open pit.

Matthew Gordon: Keeps the costs down.

Stephen Roman: Keeps their costs down.

Matthew Gordon: But at some point you can opt to go underground aren’t you.

Stephen Roman: Well, I would say eventually as the deposit goes deeper, you have to make that decision from an economic point of view. Many cases you’ve mine an open pit down to 300m and then you go in with a ramp from the pit and you continue mining down to 600m-800m. Chuquicamata the big copper project in Chile, they’ve mined that thing down to 800m to 900m. It’s a massive pit. So these things are capable but that’s something that will happen 30yrs or 40yrs from now. So for the next 10 years, it’s going to be a very easily mined open pit, right from surface, low strip ratio. We’ve done all the metallurgical test work on the material, the uranium leaches with typical sulfuric acid leaching. There’s no nasties in the ore. So it should be a very low-cost producer. Kazakhstan currently has the lowest production costs with in-situ leaching. I would say that our costs typically we would be able to mine a pound a process and put it in a drum for under $20 a pound. That would be a typical open pit with a stand alone plant. A plant would be in the $300M range. So we’ve been looking obviously at that option as a base case, but we were looking at other options of actually starting with a heap leach operation, which could significantly lower your costs because your CapEx would be much lower, your production costs would be lower processing. So we’ve estimated for an initial heap leach operation, very low strip ratio, we’d be in the $10 to $15 a pound range. I think even at $25, we can show a very healthy profit from initial operations. The mine wouldn’t actually get into production. We’re doing the feasibility over the next 12 months and then applying for our mining permit. We should have that by the end of next year, early 2021. So this could be a very profitable initial start up operation with a low CapEx number.

Matthew Gordon: And a contribution coming from Turkey.

Stephen Roman: That’s correct. The turkey aspect. And people ask like, why did we do that? With that very solid cash flow coming out of Turkey, it gives you many financing options. We don’t have to dilute the shareholders. We can we can do some sort of a note that’s backed by that cash flow from Turkey to actually build a mine.

Matthew Gordon: You can leave leverage? That becomes very interesting. Well, in a non-diluteory sense. So let’s come back to Niger. There’s a study going on?

Stephen Roman: Yes.

Matthew Gordon: So what type of study is this?

Stephen Roman: It’s a feasibility study. That will be the one that we would present to the government in order to get our mining licence.

Matthew Gordon: There are a few of the players in and around you. I note you have had conversations with them.

Stephen Roman: Well actually we’ve signed an MOU, a memorandum of understanding. with Orano mining. So we did that in July 2017.

Matthew Gordon: For what?

Stephen Roman: So the idea there was that we would be jointly studying the ideas of potentially shipping ore to their plants in Arlit. So they have the Colinak mine, the Somair mine both up there. The idea was that by us shipping ore it could of course get us started very quickly without a plant. And it would augment the supply of ore that they have at their operations so they could extend the life of those operations.

Matthew Gordon: So that you signed an MOU to be able to access and share information which allows you to make an assessment as to whether you want to do that or not at all. All the economics need to be decided as part of a feasibility study. That’s interesting. So that whole tolling relationship, given the amount of pounds you’ve got on the ground. Getting into early cash flow, I guess is the bit that interests you. You just got to work out and see if that makes sense for you.

Stephen Roman: Exactly.

Matthew Gordon: Because the CapEx for building plant…your own plant would be quite large plant.

Stephen Roman: A heap leach wouldn’t be as much as a conventional uranium plant, but it’s still a fairly significant Capex. I would say in the $100M. A conventional plant, you’d be in $300M. So all these are things that we have to take into consideration. We thought as a value opportunity. Doing something with Orano at early stages, could start generating cash flow. So we’re in discussions with them about doing something like that.

Matthew Gordon: So when’s the study actually due?

Stephen Roman: We won’t be finished until June of next year.

Matthew Gordon: So at some point you’re going to make some commercial decisions based on ‘how much money you need going in the ground’. And ‘what relationships you want to form’ and ‘what you’re going say to the marketplace’. So June next year?

Stephen Roman: I would say that we would have all the decisions by then. Of course, we’re going be putting up updates throughout the next 6 to 12 months. The other component is the government. The government wants to see us in production tomorrow.

Matthew Gordon: But their considerations are on employment, taxation, royalties.

Stephen Roman: Absolutely. This is their number one revenue generator in the country. Uranium mining. So that’s one of the reasons we’re there. I mean, in Canada, these are fantastic deposits in the Athabasca Basin, but it takes minimum 10 years, maybe up to 20 or 30 years to permit those mines. In Niger 4-6 months. It’s a whole different thing.

Matthew Gordon: They have some different drivers, haven’t they?

Stephen Roman: They have different drivers. But it’s it’s the only game in town, really. And now they have some oil there that the Chinese are developing. But really, uranium is the mainstay of that country.

Matthew Gordon: This comes down to the question we touched upon earlier with regards to buying cycles. Let’s not get into the macro story. But what it means for you and your shareholders and new shareholders coming in, is understanding how quickly can you get into production? And that’s there’s a bunch of factors… your at feasibility study. You can make an economic decision at that point. You’ve then got apply from mining license. You’re saying that’s a relatively quick process because there’s a lot of uranium mines already operating.

Stephen Roman: Well, there are in Niger. But on top of that, it’s a quick process, a very well-defined process in Niger.

Matthew Gordon: So that happens. And then is a question of which option you choose to go with in terms of how you start producing or processing your ore. What’s that timeline look like, you’re getting into production by when?

Stephen Roman: I would say get into production by, if Orano would like some feed by 2021, we could start then. If we have to build a plant, it would be probably 18 to 24 months later. Depends what scenario you go with.

Matthew Gordon: That’s your decision.

Stephen Roman: Well, we have to look at the economics at the end of the day. What can you do to move it ahead quickly and make money for shareholders.

Matthew Gordon: But that’s what this interview is about. It’s about making money for shareholders, which is where I’m coming at it from anyway. Let’s understand what happens next. What are the options? I want us on what’s happening in your head. What are you thinking about? You’re building something great here in Niger by the sounds of it? You believe you are. You’ve also got some optionality at what point you check out, right? You could get a strategic partner. You could hand the keys over, say, ‘there you go’. And say we’ve created value. Or you can build this thing out. What are you thinking?

Stephen Roman: Well, we’re mind builders. I just finished building a mine in Ontario in Canada, a gold mine. the company is called Harte Gold. And it’s it’s Ontario’s and Canada’s newest gold mine, probably in the last 10 or 20 years. we can take projects. From exploration to production. I had a project in Northern Ontario, a company called Gold Eagle Mines. So we made a big discovery in Red Lake, Ontario, and we were already working on sinking an exploration shaft, buying equipment for that. And we were approached by Goldcorp. So they were interested in buying our project. And we assessed the situation. And I made a deal with the Gold Corp for $1.5Bn for that gold deposit.

Matthew Gordon: It’s a great day at the office.

Stephen Roman: It was a good day at the office. All of our shareholders were very happy. Many of them made tens of millions of dollars on that transaction. There are a lot of those shareholders are now in a Global Atomic. They backed me on the next deal. So I have a track record of making money for shareholders. You have to assess things as they come along. We would like to develop this project because they’re really, frankly, is none other like it in Africa. There are very good projects in Canada, but the time-line to develop those is very long. So I think ours is exceptional from that point of view, both in the size, grade, value and time that you can actually start making money. To answer your question, we have the French in Niger, we have the Chinese in Niger, we have the Russians in Niger, we have the Indians in Niger. Everybody’s looking for something like this. So you know what? If a deal comes in the door, you have to assess it. You have to talk to the shareholders, ‘Would you like to have a buyout at some premium? And everybody get a big dividend, big payout’. You have to assess these things as they come along. In the meantime, we continue to create value by moving this ahead. We  derisk this project.

Matthew Gordon: That’s the answer every CEO has got to give me. They have to say we’re gonna build this thing, because you get that discount when you say, ‘we’re just developers’. We’re going take it to a point. You’ve got to be able to show that you can deliver those, don’t you?

Stephen Roman: Absolutely.

Matthew Gordon: And you would argue with the team that you’ve got, it not only is it about finding it but building mines is something that you’re very comfortable with.

Stephen Roman: Absolutely. Done it before many times.

Matthew Gordon: So I got to ask you’ve got the right team for exploration, development and production. You’re telling me you’ve got a great asset I’m hearing. Finance. Are you going to need to raise any capital or are we going to use all the money from Turkey to develop this thing?

Stephen Roman: Well, I think at this point in time, we’ve raised a little bit of money because there’s been a lot of institutional interest in this project. We have about $5M cash on board now, and Turkey is starting to kick out cash as we speak. So our new plant is just being turned on now. So we get management fees and sales commissions every month and then annually we get a big dividend payout.

Matthew Gordon: Is it enough?

Stephen Roman: Oh, yeah. That would be enough to move this project ahead.

Matthew Gordon: Depending on route you go with. I presume there’s a caveat there.

Stephen Roman: Yeah.

Matthew Gordon: But that decision is not made until June year.

Stephen Roman: That’s right.

Matthew Gordon: What are the other barriers? What are the other obstacles that you need to. You can see coming which you’re going to have to deal with or manage because it’s all about risk mitigation. Every day little fires to put out. What are you seeing as some of the things that you need to be dealing with between now and the point at which we get into production in Niger?

Stephen Roman: Well, I think in Niger one of the big issues that comes up is security in the country. So we’ve been there operating and running projects for many years now. We have a good security system in place. The Niger government wants to attract foreign investment. So they’re really clued in on the security situation. The Tim Mersoi basin and is seen as a strategic area. So they have a lot of military there. The Americans have built a new military base just 100km South of us. The French have one 100km North of us. So the area is very well patrolled. Niger is totally aligned with the West as far as being the hub of security for West Africa. So there are sporadic attacks from from various al-Qaida factions in West Africa. But Niger is managed to keep things fairly under control for some time now. AnWe expect them to continue that. And particularly with the American presence there and uranium being the material that they don’t want that being jeopardised.

Matthew Gordon: So thus it has always been with the Americans. That’s it for sure. But what else?

Stephen Roman: There’s there’s good trained labor force there because there’s been uranium mining going on there for 50 years. So I think we have a lot of people interested in coming to work for Global Atomic. It’s really getting the feasibility done and getting the capital organized, whether it’s through some sort of a leverage facility. Using our cash flow from from Turkey or coming up with potentially a JV partner. Maybe the French or the Chinese or the Russians are interested in farming into the project. These are all things we have to look at over the next year or two.

Matthew Gordon: Now talk about the markets, Your shareholder will want you to be talking, giving guidance, directing them as to what you’re up to. But you’ve got new investors looking to come in, pick a uranium team to go after. What are you telling them? Why is it Global Atomic versus the other companies?

Stephen Roman: Well, I think it’s a Global Atomic. Number one, we’re a profitable company. We’re not coming to the market every few months. That’s very unusual. Number two is the size and quality of the asset. There’s just nothing like it out there with a short timeline to production. So that would be that it would be the top qualifiers. I would say is excellent projects, good jurisdiction. Very quick permitting timelines. Definitely growth potential there. This thing could get even bigger than it is. And the profitability of the company as we currently sit.

Matthew Gordon: Plus the team has done it before.

Stephen Roman: We’ve done it a few times.

Matthew Gordon: Not many people can say that. I buy all that.  You do have your points of differentiation and what is it has been a difficult market for the last year for uranium players. What are you seeing happening in the next 12 months in the uranium space? I know we said we wouldn’t talk about macro, but just with regards to some of the companies and players in this space, what’s your sense of how they’re going to fare?

Stephen Roman: Well, the companies that have really outstanding assets. They may not be able to move them along very quickly, but they’ll always have value there. They’re the lower grade projects, I think are going to slowly fall away. Uranium is going to stay reasonably flat for the next couple of years. It’ll move a little bit. In the last three years, four years, there’s been and including this year, about 45 new reactors built in the world. Now there is another 150 scheduled to be built in the world. Uranium is going to be in big demand.

Matthew Gordon: There is a need. I mentioned specifically about the type of companies you think or what companies need to be able to survive. Because you’ve given a timeline which is quite interesting. I’ve heard all the last three days, last few months, since 232 about the timing of that, right? There’s lots people that needed to be before Christmas, right? Price discovery. And real quick, because they have cash flow issues. And that comes onto one of the points you’ve made. If you don’t have cash, you got to work out what business model you employ to survive. If it’s a two year timeline for this slow recovery, that’s going to put a lot of pressure on a lot of companies. And they can have to think about how they raise this capital, what they have to give away, what it’s going to cost them, the cost of that money. So that’s very important. So whether the asset is good or not. But the ones with lesser assets, they’re going to have a tough time, aren’t?

Stephen Roman: They will have a very tough time.

Matthew Gordon: That’s good for you. It’s good for people like you.

Stephen Roman: Well, the good thing about our company is we have very solid cash flow stream that is basically not reliant on a deposit.

Matthew Gordon: You’ve almost mitigated the risk there. It’s in a separate commodity, a separate country, separate company. So there’s no correlation anyway in terms of the risk.

Stephen Roman: That’s right. And even if things take a little bit longer on one side, you don’t have to come to the market to keep the lights on.

Matthew Gordon: You’ve got optionality.

Stephen Roman: You’ve got optionality. It’s very important. And I think people are starting to realise that now that sort of sets a Global Atomic apart from a lot of companies.

Matthew Gordon: But do you think that’s been priced into your market cap now or do you think there’s a ways to go?

Stephen Roman: I think our market cap right now is around CAD$70M.

Matthew Gordon: Where are people attributing the value? Is it the Turkish asset or is a what you’ve got on the ground in Niger?

Stephen Roman: Based on the way our partner Befesa trades at about 10 times EBITDA. Yeah. If we take the same for us, we should be trading at a $1.50.  And that’s without any value to the uranium asset at all. You get the uranium for free. As this new plant now cranks up and we start kicking out, you know, $20M- $30M EBITDA annually, our shares are going to move up just on the zinc asset alone. The uranium is a huge bonus for our shareholders.

Matthew Gordon: Perhaps maybe getting a slight discount because there’s a liability there. There is a cost of getting that in to production. People are thinking, does that mean dilution or these guys going to come up with a way of getting that finance, which doesn’t dilute me. So until you can answer that question….

Stephen Roman: Well, I’m a big shareholder. I continue to buy shares and put money into the company and I sell, you know, what I think says a lot? We’ve kept the share capital and the dilution very low. So we expect to continue to have that strategy. Low dilution and leverage what we have in order to develop something that’s that’s worth billions of dollars.

Matthew Gordon: So you don’t think it’s worth like getting a just a little bit in and give you a little bit of headroom for the unexpected?

Stephen Roman: Well, there might be…

Matthew Gordon: But there won’t be a lot.

Stephen Roman: No. There’s a couple of institutions that have approached us that have expressed an interest to have a position. We’ve said, well, that’s something we’ll consider at the right price.

Matthew Gordon: So you might facilitate that to get the right people on board. Again, to give you optionality going forward. But it’s not we’re not talking a huge amount of money.

Stephen Roman: No.

Matthew Gordon: Interesting approach. Well, I really appreciate the story. First time our viewers have heard this story. We know a lot about it because people talk about it. It’s an unusual position you’re in. And I think investors considering uranium as part of the portfolio should look at Global Atomic seriously, because the reasons we stated. The management teams experience, the cash flowing, very unusual, the scale of the assets in Africa. And all of those mitigating risks that we’ve just gone through in terms of how you going to manage this thing going forward. Impressive. Thanks very much for your time, sir.

Stephen Roman: Thank you.


Company page: https://www.globalatomiccorp.com/

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