TSX.V: GLO Frankfurt: G12 OTC: SYIFF. Generating positive cash flow with significant growth underway.

Transcription

1 TSX.V: GLO Frankfurt: G12 OTC: SYIFF Generating positive cash flow with significant growth underway. Corporate Presentation: January 2019

2 Forward-Looking Statement This presentation has been prepared by the Global Atomic Corporation ( Global Atomic or the Company ) and includes information from sources believed by management to be reliable. No representation or warranty, expressed or implied, is made as to the accuracy of the information set forth herein. The information contained herein is as of the date hereof and is subject to change, completion or amendment without notice. This presentation contains forward-looking statements, estimates and projections with respect to the anticipated future performance of the company that may be deemed to be forward-looking statements. These statements, estimates and projections reflect various assumptions made by the Company concerning anticipated results, which may or may not prove to be correct. All statements contained in the presentation that address operating performance, future direction, management and control of the Company, events or developments that are expected to occur in the future (including statements related to earnings, expectations, sales of assets, capital expenditures, or statements expressing general optimism about future operating results) are forward-looking statements. Actual results could differ materially from those reflected in the forward-looking statements contained herein as a result of a variety of factors, many of which are beyond the Company s control. All figures in CDN unless otherwise noted TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 2

3 Company Snapshot Global Atomic Corporation is a public company incorporated and headquartered in Canada Who is Global Atomic? Headquarters: Toronto, Canada Publicly Traded: TSX Venture: GLO Frankfurt Exchange: G12 Market Cap: C$45 million OTC: SYIFF High-grade uranium in the Republic of Niger and cash-flowing zinc production in Turkey What are Global Atomic s Assets? Uranium (Niger): Zinc (Turkey): DASA Project (PEA completed) Joint Venture producing Isakanan Project a zinc concentrate Tin Negouran Dajy Project Uranium resources: ~250 M lbs U 3 O EBITDA (100%): US$16 US$1.31/lb Zn Global Atomic has partnered with industry-leading operators to support development What Sets Global Atomic Apart? Uranium: One of the largest producers of uranium globally Zinc Partner: Market leader in EAFD and steel recycling Global Atomic Shareholders: 3.2% 1.3% 1.1% 0.9% TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 3

4 Asset Summary DASA Uranium Project Zinc Production in Turkey Highest grade deposit outside Athabasca Basin 0.3% U 3 O 8 Befesa / Global Atomic Joint Venture: 51/49 ownership. Near term production target 2020 Phase 1: Direct Ship Ore US$35 M to start mining, no mill required Profitable at current uranium prices MOU with Orano to sell ore Underground mining as early as 2020 Three hungry mills within 100 Km Currently producing +30 M lbs/year of zinc in concentrate. Expansion to 60 M lbs/year currently underway. EBITDA post expansion: (100% basis) US$41 US$1.25/lb Zn US$33 US$1.10/lb Zn US$22 US$0.90/lb Zn TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 4

5 Illustrative Value Potential (Millions C$) Value Proposition Base Metals provides solid cash flow and valuation fundamentals Peer recycling companies trade at 8 10x EBITDA Global Atomic Illustrative Value Potential Figures in Canadian Dollars $500 Operating partner, Befesa, trades at ~10x forward year EBITDA $400 $200 M $425 M Uranium division provides significant upside potential >180 million lbs at DASA (200 ppm eu 3 O 8 cut-off) NPV 8% : US$299 million after-tax (C$380 million) Current peers trade at 0.5x to 0.6x P/NPV $300 $200 $100 $0 $225 M Base Metals Division Current Market Cap: C$45 million Uranium Division Total Combined NAV Base + Uranium TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 5

6 Uranium Division TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 6

7 Uranium Grade (% U 3 O 8 ) High-Grade Uranium Production The DASA Deposit, located in the Tim Mersoi Basin, is one of the largest and highest grade uranium deposits in the world 2005: Global Atomic incorporated 2% - 5% Up to 3%* DASA has the highest-grade resource outside the Athabasca Basin 2007: Six mining concessions granted from Republic of Niger covering 3,500 km : DASA deposit discovery 2012: 250-person exploration camp established 2013: Initial DASA resource estimate, ~120,000 meters drilling completed 2017: Memorandum of Understanding ( MOU ) signed with Orano Mining Merger with Silvermet Completed metallurgical analysis for DASA 0.15% 0.11% 0.11% 2018: 30,000 m drill program completed to confirm high grade areas and expand mineralization Updated NI resource, June 5 th, 2018 PEA completed 0.06% 0.05% 0.05% 0.04% 0.02% 0.02% Athabasca Basin Athabasca Basin * 10,000 ppm cut-off Global Mega Azarga Laramide GoviEx Toro Berkely Husab Bannerman Forsys Husab Mine (Extract/Kalahari) TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 7

8 Agreement with Orano Mining Global Atomic signed an MOU with Orano Mining (formerly AREVA Mining), the French national uranium company, in respect to the DASA project on July 17, 2017 Terms of the joint cooperation agreement include: Ore sales agreement for a minimum of 100,000 tonnes per annum at a minimum grade of 1,000 ppm eu 3 O 8, delivered to Orano s processing plant in Arlit, 80 km north of DASA Minimum five-year term Use of Orano s metallurgical and assay labs in France Mutual assistance and cooperation in Niger Coordination of logistics between the parties for the further development of DASA The Global Atomic / Orano agreement de-risks the project considerably: Accelerates timeline to initial production and cash flow Significant reduction in pre-development costs and CAPEX requirements No mill would be required to process DASA ore TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 8

9 Uranium Incentive Price Price at which uranium projects earn +20% return DASA First To Be Developed In This Uranium Cycle $90.00 $75.00 PHASE 1 PHASE 2 PHASE 3 Low commodity price threshold, limited project development DASA is a first mover in this market Rising commodity prices, many projects will try to go to market Only will be developed in a significantly different uranium market environment Etango $60.00 DASA Phase 2 First mover, benefiting from existing mine development Patterson Lake Rook 1 (Arrow) Westmoreland Maduela Norasa $45.00 $30.00 $15.00 DASA Phase 1 Cash flow positive at current prices, accelerated permitting timeline Dewey Burdock (ISR) Soft rock, permitting hurdles Salamanca Local approvals required Wheeler River ISR Untested technology, unpermitted $0.00 Today Years Of Development TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 9

10 DASA Project Overview The DASA Project is near-term production ready Situated in the Tim Mersoi Basin, Republic of Niger DASA Project covers a land package of km 2 located on the Adrar Emoles III permit The following has been completed to advance the DASA Project towards production: >150,000 meters of drilling completed todate Updated NI Resource Report completed, tripling Indicated Resources at the conceptual open pit mining area MOU signed with Orano DASA Deposit Scale (Km) Metallurgical analysis confirming recovery method, flow sheet, U 3 O 8 recoveries PEA completed by CSA Global TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 10

11 DASA Deposit Overview; Looking East North South 0 m Surface mineable material Flank Zone Expansion Southwest Extension Zone m Northeast Extension Zone Tegama Hill South Zone Southwest Extension Zone m Tegama Hill Main Zone 4 Km TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 11

12 Deposit Open Along Strike and Down Dip, With Repeat Potential Structure DASA Grade x Thickness longitudinal section 22km of Azouza fault structure within permit area DASA graben 3km long, current drilling outlined large resource over 1.5km Deposit open along strike and down dip Additional 19km-long graben to the northeast Legend G*Th (ppm.m) 120,000 Unique in Niger - mineralization in both main ore horizons (Carboniferous and Jurassic) Syn-extensional sedimentation enhances bed thicknesses TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 12

13 PEA Summary Capital Cost Significantly Reduced Phase 1 Capital Costs Figures in US$ Millions Phase 1 Production Phase 2 Standalone Scenario Mine Development (1) $16.0 $49.5 Mill $0.0 $141.2 Surface Infrastructure $14.9 $45.4 Owner's Cost $0.3 $8.7 Indirects/EPCM $0.4 $11.1 Contingency $3.1 $64.0 Total Construction Costs $34.8 $319.9 Sustaining Capital Costs $2.5 $137.2 Reclamation Costs - $10.0 Total Capital Costs $37.3 $ TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 13

14 PEA Summary Mine Plan Schedule TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 14

15 Fast Track From PEA to Production By holes drilled (1026 total holes to date) Updated NI Resource Report Final NI Resource Report 2018 MOU advanced with Orano (Signed 2017) Metallurgical samples delivered to Orano Baseline Environmental Studies 2019 Environmental Impact Assessment Orano Agreement Feasibility Study Permitting 2020 Mine development PEA completed by CSA Global TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 15

16 Base Metal Division TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 16

17 Business Overview Principal business activity is the operation of the Electric Arc Furnace Dust ( EAFD ) recycling business in Turkey to recover zinc and produce a high-grade concentrate which is sold to smelters, primarily in the European and Asian markets Primary asset is a 49% interest in the Befesa Silvermet Turkey joint venture ( BST ) 2017 was a record year for BST, with 33 million pounds of zinc produced in concentrate, operating at 100% capacity utilization (>60,000 tonnes of EAFD was processed) Plant expansion is underway to process 110,000 tonnes EAFD producing 44,000 tonnes of zinc concentrate, approximately 60 million pounds of zinc, annually 7 steel plants 9.1 m tonnes steel 180,000 tonnes EAFD 7 steel plants 5.7 m tonnes steel 115,000 tonnes EAFD Location EAFD typically contains 30% zinc, recoveries = 80% plant capacity = 60,000 tonnes Plant expansion will increase capacity to 110,000 tonnes 7 steel plants 6.1 m tonnes steel and 120,000 tonnes EAFD BST Processing Facility TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 17

18 Figures in US$ Millions Positive Cash Flow from Zinc Concentrate Production Revenue & EBITDA (Millions US$, 100%-Basis) $60 Revenue EBITDA $1.25 $ figures represent realized zinc price (US$/lb) $40 $1.31 $20 $0.88 $0.87 $0.98 $0.95 $0.85 $ Expansion (Run-Rate) Estimated by TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 18

19 Plant Expansion Underway Uses and Sources of Funds For Expansion Figures in US$ Millions Figures in US$ Millions Cash Flow After Expansion Uses of Funds Sources of Funds Zinc Price (US$ / lb) $0.90 $1.10 $1.25 Capital Costs $26 Cash on Hand Plus Operations for 2018 $12 - $15 Revenue (100%) $39.6 $49.9 $57.6 Capital Spent Todate ($3) Existing Credit Lines $5 EBITDA (100%) $22.5 $32.8 $40.5 Start-Up / Working Capital $5 Increase to Existing Credit Lines $11 - $12 Dividend & Fees (Attributable to GLO) $7.5 $11.0 $13.7 Total Uses $28 Total Sources $28 - $32 TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 19

20 Future Plans in Turkey Expansion is underway Engineering is complete and paid Capital costs and EPC contract have been signed The Company has ordered long lead-time items Site construction to begin in February 2019 Completion in September 2019 with swap of kilns requiring 6 months downtime* Funding for expansion from 2018 / 2019 cash flow and available lines of credit * Note: EAFD will be stockpiled during his period in order to maximize throughput in the new kiln for the balance of TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 20

21 Global Atomic Corporation: Highlights Positive cash flowing company. Developing Africa s highest-grade, near-term uranium development project, with a proven management team. Signed a Memorandum of Understanding with Orano Mining, France s national uranium company, in Partnered with Befesa Zinc, an innovative company specializing in managing and recycling residues from the steel, zinc and aluminium industries. Developing projects that feature low capital requirements, low cash costs and high profitability! Positive cash flow will be driven by both zinc and uranium divisions. TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 21

22 Contact Us Stephen G. Roman, Chairman, President & CEO 8 King St E, Suite 1700 Toronto, ON M5C 1B5 sgr@globalatomiccorp.com Tel: +1 (416) Website: TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 22

23 Appendix TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 23

24 Capital Structure Shares Issued 106,997,850 $ ,145,455 $0.25 5,554,190 $0.64 2,453,977 $ ,532 $1.92 2,574,448 Fully Diluted 123,047,452 Market Cap (January 16, 2018) $45 Million All $ figures in CAD unless otherwise noted Nearly $100M has been spent on the development of Global Atomic s uranium and zinc projects. The Company currently generates positive cash flow with significant growth underway. TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 24

25 DASA Project Accessibility The DASA Project is readily accessible by well established infrastructure All weather road Route d Uranium connects DASA to Agadaz and Arlit Route N25 Route d Uranium The same road is used by Orano Mining to export yellowcake to the port of Cotonou in Benin, West Africa Grid power available on-site, water available from underground aquifers Large pool of experienced local mining personnel, including engineers, geologists, technicians and general labour DASA Camp TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 25

26 PEA Summary Phased Development Phase 1: Accelerated development to near term cash flow in period of low uranium price Accelerated underground development with minimal infrastructure Reduced up-front capital: US$35 million High grade material: 360,000 tonnes shipped for 5 year contract containing 2.8 million lbs grading 3,698 ppm Minimize mining and transport costs up front Phase 2: Standalone scenario including on-site mill and surface infrastructure Initially operating at 2,500 tpd ramping up to 3,000 tpd 69 million lbs U 3 O 8 recovered at an average grade of 2,380 ppm over 15 year mine life Annual production sustained from 4 M lb to 7 M lb over the mine life CAPEX: US$320 million (includes US$35 million spent in Phase 1), US$141 million for an on-site mill NPV and IRR summary below: Uranium Price US$/lb $45.00 $50.00 $55.00 Pre-Tax 8% US$ M $342 $539 $735 IRR (100% Equity) 27% 37% 46% Post-Tax 8% US$ M $172 $299 $437 IRR (100% Equity) 18% 25% 32% TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 26

27 Phase 1 Mine Development Profitability Profit sharing opportunity with Orano Ore feed from Orano s mines are lower grade than DASA higher cost Global Atomic feed provides Orano a cost effective solution, both companies will benefit from the relationship Other opportunities to enhance value at DASA The following opportunities were recognized following the PEA Improvements to recovery PEA recovery was 84%, prior test work demonstrated +90% Block model is based on an open pit operation, opportunity to improve modelled assumptions Target areas of higher grade, particularly in early years of production Operating Margin Phase 1 Mine Development (PEA) 1 Ore Shipped To Orano K tonnes/yr Grade shipped ppm 3,698 3,698 Contained U 3 O 8 M lbs/yr Assumed Uranium Price US$/lb $30.00 $40.00 Less: Mining Cost (PEA) US$/lb ($8.75) ($8.75) Less: G&A (PEA) US$/lb ($2.01) ($2.01) Less: Sustaining CAPEX (PEA) US$/lb ($0.18) ($0.18) Operating Margin Before Transport / Processing US$/lb $19.06 $29.06 Less: Transportation (Management Estimates) US$/lb ($1.57) ($1.57) Operating Margin Before Processing US$/lb $17.49 $ ) Phase 1 figures are based on value opportunities explored in the PEA; include assumptions from management on transportation costs TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 27

28 PEA Summary Input Unit Value Mineralized Material Processed Million tonnes 15.9 Extraction Ratio 85% Dilution 34% Mill Head Grade ppm 2,380 Mill Recovery 84% Total Recovered Uranium Million lbs 69.1 Mine Life Years 15 Annual Tonnage (Phase 1 First 6 Years) Ktpa 900 Average Annual Production (Phase 1) m lbs U 3 O Average Annual Production (Phase 2) m lbs U 3 O Operating Cost Mining US$/lb $12.26 Processing US$/lb $10.80 Transport and Marketing US$/lb $1.50 G&A US$/lb $1.91 Total Operating Cost US$/lb $26.52 Sustaining Capital US$/lb $1.99 All In Sustaining Cost US$/lb $ TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 28

29 DASA Plan View Open On Strike Open On Strike 4 km TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 29

30 DASA Geophysics HRIP Survey 2D rendering of DASA graben Profile spacing 200 m Looking Northwest Looking Northeast TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 30

31 DASA Resource Sensitivity At Varying Cut-Off Grades The DASA resource contains significant, high grade uranium at a range of cut-off grades Cut-Off eu 3 O 8 ppm Category Tonnes (Millions) eu 3 O 8 (ppm) Contained Metal (M lbs) 200 1,000 1,200 5,000 10,000 Indicated , Inferred Indicated 6.9 4, Inferred , Indicated 6.0 4, Inferred 8.2 2, Indicated , Inferred 0.8 7, Indicated , Inferred , TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 31

32 Republic of Niger: A Supportive Mining Region The government of Niger supports foreign private investment Foreign investment is viewed as a key to economic growth and development Income tax rate in Niger is 30%, companies are provided tax exemption for the first three years and benefit from accelerated depreciation on capital expenditures; no VAT is paid Mining code provides accelerated permitting process, tax, customs exemption and tariff protection A sliding scale royalty is based on operating profit of the business: Profit < 20%: royalty = 5.5% Profit of 20% to 50%: royalty = 9.0% Profit of > 50%: royalty = 12.0% Niger has a long history of uranium exploration and development Uranium was first discovered in the Tim Mersoi basin in 1957 The discovery prompted the French Atomic Energy Commission to initiate detailed geological studies and exploration, leading to development of the Cominak and Somair uranium mines which have been in steady production since TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 32

33 Proven Management Team Stephen G. Roman, BA Chairman, President & CEO 35+ years George A. Flach, P.Geo. Vice President, Exploration, Director 30+ years Former senior officer and Director of Denison Mines Limited Discovered Gold Eagle, sold to Goldcorp ($1.5B) Founder and developer of Harte Gold, Verena Minerals / Belo Sun Volta Grande, Black Fox, Gabriel Resources PDAC Bill Dennis Award winner, Prospector of the Year, 2016 Discovered / developed gold projects in West Africa 20 Moz Goldfelds Tarkwa, 4 Moz Bogosu and 2 Moz Benso mines in Ghana 2 Moz Goulagou mine in Burkina Faso Rein A. Lehari, CPA, CA Chief Financial Officer 30+ years Chartered Professional Accountant and former partner, PricewaterhouseCoopers Primary focus over career on mining and real estate Peter Wollenberg, Ph.D., P.Geo. Director, Exploration & Resource Development 30+ years Former Director North American Exploration, AREVA Resources Canada Previously worked on AREVA s Niger projects Tim Campbell, BA (Hons.) Vice President and Corporate Secretary 20+ years Government relations, community consultation First Nations, permitting Corporate finance, go-public transactions Regulatory compliance Fergus P. Kerr, P.Eng. Mining Consultant 35+ years Mining engineer and uranium specialist, Royal School of Mines, London, UK General Manager at Denison Elliot Lake uranium mine Subsequently, Mine Manager at Inco s Sudbury operations TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 33

34 Board of Directors Stephen G. Roman (see previous page) George A. Flach, P.Geo. (see previous page) Richard Faucher, P.Eng. Retired metallurgical engineer Formerly VP, Brunswick Mining & Smelting (Noranda Inc.), President & General Manager, Falconbridge Dominica Paul Cronin, B.Com., MBA CEO and Managing Director, Black Dragon Gold Formerly CEO, Anatolia Energy, a uranium development company in Turkey Mining finance executive experienced in equity, debt, and mergers and acquisitions; Rand Merchant Bank (RMB) Derek C. Rance, P.Eng., MBA Chairman and Senior Associate of Behre Dolbear & Company Ltd., a mining industry consulting company Formerly President and COO of the Iron Ore Company of Canada Asier Zarraonandia Ayo, B. Econ. CEO of Befesa Zinc S.A.U. Formerly a senior manager, auditor and consultant with Arthur Anderson, specializing in mergers and acquisitions TSX.V: GLO, Frankfurt: G12, OTC: SYIFF 34