(Kitco News) – Uranium developer Global Atomic (TSX: GLO) reported Wednesday that it has received a Letter of Intent for the procurement of uranium from a major North American utility.
According to the company’s statement, the award follows a comprehensive due diligence process conducted by the utility, and reflects the confidence the fuel buyers have in the Dasa operation, located in Niger.
The company said that this award defines the supply of 2.1 million pounds U3O8 over a six-year period commencing in 2025, representing approximately 7 percent of Dasa’s production over the period.
Global Atomic pointed out that pricing is designed with two components to provide a blend of predictability and market exposure. The market component is linked to the uranium spot price index, subject to a floor and ceiling.
The company explained that the floor price ensures that the all-in sustaining costs of the Dasa operation are comfortably covered, and the ceiling allows the company to benefit from the improving market environment.
“This award, with revenue potential valued at over US$110 million in real terms, is consistent with the company’s strategy of establishing sales contracts with Tier 1 global utilities, at volumes sufficient to underwrite debt financing, thereby limiting equity dilution as the Dasa operation moves into production,” the company said in its press-release.
Global Atomic also noted that the award is subject to the successful conclusion of a purchase-sale contract, which the company will now progress.
Global Atomic’s Uranium Division includes four deposits with the flagship project being the large, high-grade Dasa project, discovered in 2010 by Global Atomic geologists through grassroots field exploration. The Dasa project is fully permitted for commercial production. Mine excavation began in Q1 2022, with yellowcake production expected to commence by the end of 2024.
The company’ Base Metals Division holds a 49% interest in the Befesa Silvermet Turkey, S.L. Joint Venture, which operates a modern zinc production plant, located in Iskenderun, Turkey. The plant recovers zinc from Electric Arc Furnace Dust to produce a high-grade zinc oxide concentrate which is sold to zinc smelters around the world.