Serial mine builder and financier Stephen Roman cut his teeth working for Denison Mines (TSX: DML; NYSE-AM: DNN), the uranium company built by his father.
After starting there as a miner at the age of 19, he spent the next 25 years at the uranium producer before striking out on his own in 1990–1991.
Roman went on to develop several gold projects — the most recent being Harte Gold’s (TSX: HRT; US-OTC: HRTFF) new Sugar mine in Ontario. Among his other accomplishments in Ontario: Building the Black Fox mine, now owned by McEwen Mining (TSX: MUX; NYSE: MUX), and developing and selling Gold Eagle to Goldcorp (TSX: G; NYSE: GG) for $1.5 billion.
But Roman’s interest in uranium never waned.
In January 2005 he set up Global Uranium Corp. — now called Global Atomic (TSXV: GLO; US-OTC: SYIFF) — and focused the company’s exploration dollars on West Africa.
“Typically from Denison days it would take 20 to 30 years to permit uranium deposits in this country, so I said to the team, ‘Let’s look in West Africa’,” he says.
At that time, Niger had just opened its doors to foreign investment, so the company started looking for property there.
One of the first things Roman did was to call geologist George Flach to get his advice. Flach, a long-time associate and friend of Roman, was working on a gold project in Niger at the time.
“I asked him whether there was any chance to pick up some uranium concessions in the country, and he said, ‘Absolutely! Come on over,’” Roman recalls.
Together the pair picked out six concessions covering 3,500 sq. km, all of which saw prior work by the French. The concessions were granted in 18 months and exploration began in 2007.
Within three years, Global Atomic’s geological team discovered Dasa, one of the largest and highest-grade uranium deposits in the world.
The deposit is located on the company’s Adrar Emoles III permit and lies beneath the Abinky Formation in Niger’s Tim Mersoi basin.
Dasa has an indicated resource of 9.59 million tonnes at 0.31% U3O8 (64.8 million lb. contained U3O8) and an inferred resource of 8.44 million tonnes at 0.26% U3O8 (48.4 million lb. contained U3O8). Just under half the total resource could be mined via open pit.
The company is updating the resource with another 22 drill hole gamma probe results completed in 2018, but not included in the latest estimate. All assays are expected by the end of the first quarter of 2019.
“It’s a spectacular deposit,” Roman says. “We found it by doing surface prospecting and came across a blow-out, so to speak, where we had an area of very high grades coming right to surface. The Geiger counter went off scale — it was running 30% uranium.”
Global Atomic discovered Dasa by taking a different approach to exploration in the Abinky formation — a volcanic tuff horizon that sits under the surface mudstone.
“Uranium mineralization was typically found above this tuff, so local practice was to stop drilling when the tuff horizon was hit with the drill,” he says. “We decided to drill deeper to see what we may hit on the way to bedrock. We wanted to develop a geologic section for this part of the Tim Mersoi basin — a sedimentary basin like our Athabasca basin in Saskatchewan — and when we drilled below the Abinky, we made the big discovery. No one had ever found anything like this in Niger before.”
At that point the company was still private, so Roman flew to London and based on the early results, raised over $50 million from institutional investors including JP Morgan, Macquarie, and Investec. “A lot of the big guys came into this when we showed them what we found,” Roman says.
When the uranium market tanked and capital dried up in the wake of the Fukushima nuclear disaster in March 2011, he says, the company had fortunately raised enough money to get it through the difficult years, and was even able to raise a bit more as time went on.
In 2013 the company put out its initial resource estimate based on 120,000 metres of drilling and updated the resource in June 2018 on a total of more than 150,000 metres of drilling, tripling the indicated resource within the conceptual open-pit mining area.
It also completed a preliminary economic assessment that looked at two options: building a direct ship ore operation that would not require a mill and would cost US$35 million to start mining; and building a stand-alone facility that would cost about US$320 million, including US$141 million for an on-site mill, and which could produce 4 million to 7 million lb. U3O8 a year.
Global Atomic focused on the first option and has signed a memorandum of understanding with France’s national uranium company, Orano Mining (formerly AREVA Mining), for a direct ship ore operation.
Orano, one of the world’s largest uranium producers, has a uranium processing plant, 80 km north of Dasa near the town of Arlit. Under the agreement, Global Atomic would deliver 100,000 tonnes of U3O8 a year at a minimum grade of 0.1% U3O8 for at least five years.
Global Atomic is undertaking a feasibility study on this option, while Orano is doing more metallurgical testing. Roman says he hopes to wrap up a deal by mid-year. If all goes according to plan, Global Atomic could ship U3O8 to Orano as early as 2020.
The agreement shortens the time to initial production and cash flow, as no mill would be required to process Dasa “ore”, Roman says, and reduces pre-development costs and capital expenses.
“They have two plants so theoretically they could take everything we produce,” Roman says.
The arrangement would be profitable, even at current uranium prices of US$29 per lb. U3O8, he argues.
“We don’t need US$60 to US$70 per lb. uranium to do this project,” he continues. “So we’re developing the final terms for the ore shipments, and we’ll plug those in the feasibility study, and then complete the mine plan.”
“You have to come up with plans that work, and the association with Orano is a great way of getting the project kicked off,” he continues. “Eventually the uranium price goes up to US$50 per lb., and we could build our own plant, but we can assess that at that time.”
For his part, Roman is convinced that uranium could move higher with production cutbacks in Kazakhstan and by Canada’s Cameco (TSX: CCO; NYSE: CCJ) tightening the market, and with reactor builds in countries like China and India.
“There are around 300 reactors being built around the world,” he says. “Everybody likes renewables, but you still need that base load power, and nuclear is the best way to do it. You’re not damming rivers, creating huge environmental disasters — you’re creating carbon-free nuclear energy.”
Roman expects to complete the feasibility study and apply for mining permits before year-end — a speed many others in the uranium sector would envy.
“In Canada it can take decades to get all the permits,” he says. “In Niger it is four to six months … this is a project that can go into production very quickly.”
In addition to Dasa, the company has also developed resources at three other deposits on its concessions: Tin Negouran (10 million lb. U3O8), Dajy (17 million lb. U3O8) and Isakanan (34 million lb. U3O8).
To be sure, companies operating in Niger and elsewhere in West Africa must be on guard against terrorists operating in the region, Roman says, but Global Atomic has a secured camp in an area that Nigerian, French and American militaries patrol regularly.
“The big point I think everybody needs to understand is that Niger decided to totally align themselves with the West,” he says. “The Americans in the last two or three years have built three military bases in Niger, and because the Niger government views the basin as a prime area generating foreign exchange due to uranium mining — it’s the world’s fourth-largest uranium producer — they want to protect that basin, so there is a huge security net around that area, developed by the French and Americans, primarily.”
Roman adds that both the French and Americans have bases in the town of Arlit and “the country has been totally fortified — the Niger military has been updated with modern equipment, and it’s actually much better than it used to be.”
Global Atomic is able to fund its Dasa project with cash flow from the company’s zinc asset in Turkey.
It owns a 49% stake in the Befesa Silvermet Turkey joint-venture, which specializes in managing and recycling residues from the steel, zinc and aluminium industries. The joint venture runs an electric arc furnace dust recycling business that recovers zinc and produces a high-grade concentrate sold to smelters, primarily in Europe and Asia. In 2017, the joint venture produced 33 million lb. zinc in concentrate.
The company is expanding the plant from 30 million lb. to 60 million lb. zinc a year, and the new plant is scheduled for completion by September 2019.
Global Atomic’s consolidated net income was $5.6 million for the nine months ended Sept. 30, 2018, compared to $5.8 million for the same period in 2017.
Over the last year, Global Atomic’s shares have traded within a range of 20¢ to 45¢ per share. At press time it traded at 34¢ per share.
The company has 142 million shares outstanding for a $48-million market capitalization.