Niger takes 20% stake in Global Atomic's Dasa
Investor Insight: InterGroup Mining
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The arrangement sees the government take an additional 10% interest on top of the 10% it is obliged to take.
"This agreement demonstrates the Niger Government's commitment to support the Dasa Project, which will be viewed positively by our Banking Syndicate, who are currently conducting their Due Diligence review," Global Atomic's Stephen G Roman said.
Investor Insight: InterGroup Mining
SPONSOREDintergroup mining
SPONSOREDsaturn metals
Emerging SA gold developer Barton Gold breaks the mould
SPONSOREDbarton gold holdings limited
Sky the limit for AuTECO in Canada
SPONSOREDauteco minerals ltd
"We are now constructing the Dasa mining camp to house employees during construction and early-stage mine development. The Mine Site infrastructure is currently well advanced, with completion timed to coincide with commencement of mining operations and the collaring of the Portal, scheduled for November, 2022," he said.
Red Cloud Securities said it viewed the outcome as "slightly positive".
"While we didn't anticipate GLO's ownership interest to change, we note that the Niger Government is now funding 10% of all capital costs at Dasa, while maintaining its expected 10% free carried interest," it said.
"Thus, GLO's capex responsibility is essentially unchanged at 90% of the initial US$208 million.
"With increased Government interest, financing syndicate in place, $75 million low-interest debt committed, $100 million in uranium off-takes arranged, three-year tax holiday and experienced management taking charge of the new subsidiary, we believe close of these negotiations further de-risks the project," it said.
As a result, Red Cloud has lifted its price target for Global Atomic from C$7/share to C$7.20/share (US$5.47 to US$5.63).
The company's share price was C$3.28 on 15 August, giving it a market capitalisation of C$582.39 million.
A 2021 Dasa feasibility study viewed an initial phase 1 mine development over 12 years, producing 45.4 million pounds and an after-tax NPV8% of US$157 million and an IRR of 22.7%, using a uranium price of US$35/lb.