Global Atomic shares dip on US’s Niger ‘coup’ finding

The U.S. State Department’s recent classification of the military takeover in Niger as a ‘coup d’etat’ has temporarily halted U.S. Development Bank financing for Global Atomic Corp’s (TSX: GLO; US-OTC: GLATF) Dasa uranium project.

The pause could last until democratic elections are reinstated, a process that might take two to three years.

Despite this, Global Atomic remains financially robust, with CEO Stephen Roman asserting Tuesday that the company has sufficient cash on hand for the next 12 months.

“The government has confirmed its full support for the Dasa project and recognizes it’s a new mine that will benefit the Republic of Niger by creating new jobs and opportunities,” Roman said in a statement.

In May, the company said its banking syndicate was expected to finalize a term sheet by the end of the second quarter and to approve the debt facility of the project financing before the end of the third quarter.

While Global Atomic’s two existing yellowcake offtake agreements with utilities remain unaffected, the Toronto-based company is actively exploring non-dilutive financing options with interested parties.

In terms of logistics, the Niger government has cleared challenges by approving the transport of goods via ports in Ghana and Togo and overland through Burkina Faso. The company is also set to complete a revised feasibility study by the first half of 2024, incorporating recent updates to Dasa’s resource estimate.

Roman said as recently as June and early this month that the financing terms for the Dasa project loan facility were nearing completion and awaiting bank board approvals. Construction at Dasa is progressing, with a 200-person mining team in place and preparations for yellowcake production by early 2025 on track.

The company discovered Dasa in 2010 through grassroots field exploration. The project is 105 km south of the uranium mining town of Arlit.

In May it updated the project’s resource estimate, calculating 10.09 million tonnes grading 4,914 parts per million (ppm) for 109.3 million lb. of uranium oxide in the indicated category. The inferred resource grew to 4.45 million tonnes at 5,243 ppm for 51.4 million lb. of uranium.

Late last year, Global Atomic started construction of the Dasa mine and has in place two signed purchase-sale contracts, as well as a recent third letter of intent to formalize an offtake agreement with a North American power utility and partners.

According to Roman, Dasa has a long life expectancy, with the current 12-year Phase 1 plan representing about 20% of the known deposit. The revision to the Phase 1 feasibility study, due in the first half of 2024, is expected to double Dasa’s mineable reserves and extend Phase 1 significantly.

Red Cloud Securities, after revising its projections due to the anticipated delays, slightly reduced Global Atomic’s stock target price to $5.20 per share from $5.25.

The company’s Toronto-quoted shares fell by about 25% overnight to an intra-day low of $1.76 on Wednesday, having touched $1.28 and $4.18 over the past 12 months. It has a market capitalization of $382.3 million.