Interview: Global Atomic CEO on Dasa's Future

Canada-based junior Global Atomic was set to begin uranium production at its Dasa project in Niger in 2025, before a Jul. 26 military coup in the country threw that into question. Global Atomic CEO Stephen Roman sat down with Energy Intelligence’s Grace Symes on the sidelines of the World Nuclear Symposium in London to discuss Dasa’s future. A shortened and edited version of that conversation is below.

Q: It has been over a month since the coup in Niger on Jul. 26. What is Global Atomic seeing on the ground there?

A: The political reorganization in Niger has created frustration for the company. Operations are proceeding normally. We've had a meeting with the mines minister and the local new governor of the region, and they're very supportive of the project. They want us to continue unabated, effectively. However because of the airports closing and the borders closing, supply lines have been cut. With any mining project, you have daily consumables at the site. A lot of these consumables that we use, which would include bits for your jumbo drilling machines, rock bolts, things like that, those run out, and when those run out, you can't mine. Currently, the mining has been put on hold because we've run out of these consumables and are waiting for the supply lines to reopen.

Some of the borders with neighboring countries are open now — Burkina Faso, Algeria and others. We're trying to source our equipment through those countries. Benin is normally where we get it from, because all the supplies typically come through [the port of] Cotonou and up to the Niger border, and then it comes into us. We still have about 200 people on site. And they're doing surface infrastructure, maintenance. We’re paving the ramp that goes underground. That's been completed now. There has been a lot of work completed. On the other side of the coin, outside of Niger, we are working on all of our final detailed engineering. All that work is continuing.

But to specifically answer your question, in Niger I would say it's generally peaceful. There haven't been any kind of activities in our area that have disturbed us.

Q: So the contracts and mining leases that were signed under the previous government, the new government considers those all valid?

A: Yes.

Q: Have they given any indication of wanting to change mining royalties, or the way that Dasa operates?

A: They have not said anything to that effect. The mines minister had a meet and greet meeting where he brought all the mining companies in and said hello, and that they're going to follow the previous government's agreements. Then we had another meeting with him, and he said that he's very supportive of our project. As far as I've seen, there's been no indication of any changes.

Q: So what still has to be done on the ground in Niger that you can't do with other firms outside the country?

A: The big thing is that we're going into a construction project. We have to build a recovery plant, a mill and we use quite a few expat consultants. We do use primarily Niger labor and expertise; our top-level management all the way to lower-level in the company are all from Niger. We do have a Canadian contractor there that's teaching them how to operate the brand-new mining equipment. The training programs are ongoing there. Once the plant starts being built, you're going to have a lot of international consultants coming in to construct that plant. Unless there's free air travel back and forth, they’re basically stymied in how do they get in and out. That's going to be a big holdup, and that's why we're saying the project may be delayed. We’ve told the government that, we've told the mines minister things need to open up; otherwise the project is going to be delayed.

Q: Right, but the border closures, at least for Benin, they're not from Niger’s side, correct? They’re from the Ecowas [The Economic Community of West African States] border closures?

A: Yeah, Nigeria and Benin are closed at this point in time because of the Ecowas sanctions.

Q: Trying to ship through Algeria, for example, instead of Benin, would that take a lot longer or be more difficult than shipping through Benin?

A: It hasn't really been done before. It is a long way, you'd be going from the Mediterranean all the way down through Algeria. We are in the northern portion of Niger, which is not too far from the Algerian border. You'd have to experiment and see if that would work. Then you've got the Burkina Faso route. You could go from Togo or from Ghana into Burkina and then Burkina into Niger. Again, it's a little bit longer, takes a bit more time. You're crossing more borders. Of course every time you have to cross a border it presents more problems.

Q: Given all of these hurdles, do you still expect Dasa to be able to enter production in 2025?

A: Right now, it's looking like it could be the fourth quarter of 2025. That's if things get moving again. If they don't get moving again, then it’s going to be later than that.

Q: I know Global Atomic has off-take contracts that are supposed to start delivery in 2025. Do those have some flexibility? Do you expect to still be able to deliver into those?

A: Because it's a new project, utilities that we signed with realize that there could be delays with getting projects up and running the way you expect. So there is flexibility there.

Q: And are those contracts project-specific, or in theory could Global Atomic deliver spot material?

A: We could deliver spot material. They're not project-specific.

Q: In terms of entering production, would you still enter production if the current government remains in charge until 2025, 2026?

A: I would say yes. The government does want to have these projects go ahead because that's where they get a lot of their revenue from in the country. Foreign aid has been cut at this point in time, and they get 40% of their revenue from foreign aid. With foreign aid cut, they've got oil, which is being exported to this day, and the other big product is uranium. I would expect that the government, regardless of who's in power there, will want that revenue stream to continue.

Q: Global Atomic is also still working to finalize a debt facility. Do you expect to be able to do that under the current circumstances?

A: Yes. We have a Canadian and an American bank doing the debt facility. Unless there's a change in status on how the American government perceives the situation in Niger, currently we are on track and we are finalizing the term sheet.

Q: Why should financial players invest in Global Atomic or utilities sign offtake contracts given the situation in Niger when more stable projects exist in Australia or Namibia or places like that?

A: The big reason is that there's a real shortage of uranium. There's only a limited amount of supply from other projects. Most of the African projects, most of the material goes to China. The big mines in Africa I would say mostly are China and Russia. There are not very many projects that can feed a world reactor fleet. I think everyone realizes that Dasa is a standout project and that it will come online and it will be able to supply. In the history of Niger, since the French [Orano] operated starting in 1970, 1971, there's been a few coups in the country, and the uranium supply has never been interrupted. This is a good history. I think people that are knowledgeable know that, and they know that they need to diversify their supply base. So they view Dasa as a good project to support that will get through the hurdles and will be able to supply.

Q: Have you continued to see interest from utilities post-coup?

A: Yes. This week I’m here at WNA [the World Nuclear Symposium], and I've got meetings with half a dozen utilities here while I'm in London. They're all still engaged. We're still engaged doing RFPs for utilities right now. The interest level has not diminished.

Q: Do you think there's any risk that supply does catch up with demand with planned new mines coming online in Australia and Namibia and Kazakhstan?

A: Based on the reactor announcements I would say that the gap will not be filled. The gap is going to continue to grow. That’s going to spur the price to go higher, which has already started, and that's going to spur more exploration. But it takes a long time to explore, find an economic deposit, develop an economic deposit, get it permitted, and put it into production. You're looking at at least ten or 15 years minimum. Kazakhstan, again, China's taking a huge quantity of that supply. Of those in-situ leach mines, a lot of them are starting to get more on the downward curve in their lifecycle. So there are not that many new, large high-grade uranium projects out there. There's going to be a continually larger gap in the supply.

Q: How much material is Global Atomic looking to sell once Dasa enters production into long-term contracts versus into the spot market?

A: For the moment the idea is that we would try to get about 1.5 million to 2 million pounds [per year] in the long-term market. Because we need to cover any bank requirements until the loan is paid out. In addition to that, we would like to see some layering in of contracts, and they could be a mix of long-term and spot. The target is to produce about 4.5 million pounds a year. The thought process right now is to get 2 million pounds in long-term contracts, and the balance could be floating.

Q: You've mentioned that there have been multiple coups in Niger before and Orano has continued to operate through those. Do you feel in any sense that this coup is different?

A: It seems to be just a little bit different because there's a general feeling across West Africa, I would say, that it's time for the French to go home. It's not just interior to the country. It’s a broader thought process happening across West Africa, saying Africa is for Africans and the French should go home. I think that might be a little bit different from past coups.

Q: Obviously Global Atomic is not French. But do you think there's any risk that that spills over to include Western mining companies?

A: On the continent of Africa, there's been a lot of political reorganization, and governments typically like to get a bigger piece of the pie. But you need international investors, you need international expertise. Africa will not, in my estimation, kick everybody out and try to do it all themselves. That's happened before in history in Africa, in Zambia and DRC and various places where they decided to kick everybody out, but then their production fell off a cliff and impoverished everybody and the mines shut down, because they just didn't have the capability to do it.

Mining is a very complex business and it takes a lot of different moving pieces to make it work. This is what I believe most people on the continent have realized, and they say okay, we need to have fair and equitable deals. I believe we have structured a very fair and equitable deal. The way it works in Niger for our Dasa project is by the time you take into account the corporate tax rate of 30%, you take into account the royalties, that currently we're under a floating 5.5% to 12%, right off the top. That's being harmonized to 7% going forward with the new mining code. But you take that into account plus the taxes that are paid by all the individuals that are working there, and then the VAT, etcetera, we're basically split 50/50 down the middle. The government is getting half the revenue of the project, we get half the revenue of the project. It's a very fair deal for Niger and for Global Atomic, because we're effectively equal partners.

Q: Do you believe the coup will have long-term impacts on the U3O8 market?

A: Niger is a big player in the U3O8 business. It was fourth with Cominak [the Orano mine shut down in 2021] running, now they’re seventh in the world. But with Dasa coming on I think it's going to be in the top ten uranium mines in the world. So Niger would come back up to probably three or four on the ranking level. That's pretty significant.

Q: If Orano is not able to get deliveries out and Dasa is delayed, do you think that could have a big impact in the next few years?

A: Yes I do. I think that if supplies from Niger are slowed down then it's going to just add to the deficit in the market and you're going to have the prices go up further.

Q: Are you discussing at all with GoviEx or Orano about doing something in concert regarding these potential shipping routes through Burkina Faso or Algeria?

A: We've definitely had some discussions prior to the political issues because there are synergies there. You could save money for all the parties by doing things jointly. For instance, if you bring in a larger bulk load of sulfur then you can keep your cost down. There's interest in doing that but everything's been put on hold at the moment.