Mr. Stephen Roman reports

GLOBAL ATOMIC ANNOUNCES Q1 2023 RESULTS

Global Atomic Corp. today released its operating and financial results for the quarter ended March 31, 2023.

Highlights

Dasa uranium project

• The company revised its Dasa project, phase 1, feasibility study which:
  • Confirmed a reserve for the Dasa project of 4.1 million tonnes grading 5,267 parts per million for a total of 47.2 million pounds U3O8.
  • Outlines an initial, phase 1, 12-year mine schedule at a production throughput of 1,000 tonnes per day to produce 44.1 million pounds U3O8.
  • Estimates cash costs, including royalties and all Niger off-site costs, of $19.02 (U.S.)/pound U3O8 and an all-in sustaining cost of $22.13 (U.S.)/lb U3O8.
  • Estimates initial capital expenditures to be $208-million (U.S.).
  • Calculated for phase 1 using a U3O8 price of $35 (U.S.)/lb an after-tax NPV8 (net present value, 8-per-cent discount rate) of $147-million (U.S.) and an after-tax IRR (internal rate of return) of 22.3 per cent and using a U3O8 price of $50 (U.S.)/lb an after-tax IRR of 44.4 per cent and at $60 (U.S.) the after-tax IRR would be 56.9 per cent.
• The access ramp to the underground Dasa deposit has progressed 325 metres at the end of April, 2023, about 40 per cent complete before reaching the ore level.

Dasa uranium project: subsequent events

• On May 8, 2023, the company formalized its June, 2022, letter of intent by signing a definitive agreement with a second major North American utility for their procurement of up to 2.1 million pounds U3O8 from Dasa within a multiyear delivery window beginning in 2025.
• The company is in the process of completing a revised mineral resource estimate (MRE) for the Dasa project to include results from the 16,000-metre drill program initiated at the end of 2021.
• Long-lead items have been selected and are in the process of being ordered.

Turkish zinc joint venture

• In early March, 2023, the recycling plant resumed operation following a thorough inspection and assessment of the facility after the earthquake of Feb. 6, 2023.
• The Turkish zinc joint venture (BST or the Turkish JV) plant processed 6,125 tonnes EAFD in Q1 2023 as the plant was shutdown at the time of the initial earthquake and remained down until regional infrastructure could support a safe resumption of operations in early March.
• The company's share of the Turkish JV EBITDA (earnings before interest, taxes, depreciation and amortization) was a loss of $400,000 in Q1 2023 ($3.4-million gain in Q1 2022).
• The zinc contained in concentrate sales in Q1 2023 was 3.7 million pounds.
• The average monthly LME zinc price was $1.42 (U.S.)/pound in Q1 2023.
• The revolving credit facility of the Turkish JV was $12.47-million (U.S.) at the end of Q1 2023 (Global Atomic share -- $6.1-million (U.S.)).
• The cash balance of the Turkish JV was $600,000 (U.S.) at the end of Q1 2023.

Corporate

• The company completed a bought deal short form prospectus offering of 18,666,667 units on March 17, 2023, at a price of $3.00 per unit for gross proceeds of $56,002,501. Each unit comprised one common share and one-half warrant exercisable at $4.00 per common share.
• Global Atomic continues to receive quarterly management fees and monthly sales commissions from the Turkish JV ($131,000 in Q1 2023 compared with $423,000 in Q1 2022), helping to offset corporate overhead costs.
• Cash balance at March 31, 2023, was $52-million.

Global Atomic president and chief executive officer, Stephen G. Roman, commented: "I am pleased to report on how well the Dasa project development is progressing. Our current cash position allows us to continue with project development on schedule and our bank financing is progressing. We continue to advance our ramp access to the orebody, are placing orders for long-lead plant equipment and have already built out a full in-country mining team with experienced miners and a complement of trainees from the villages near the project. The ramp development now exceeds 325 metres and is expected to reach the top of the ore body in Q4 2023.

"We are pleased to report that mill equipment costs to date are in line with our feasibility study estimates which were calculated at the peak of inflation for equipment and shipping costs that have since declined to near prepandemic levels.

"Further, our estimated cost structure allows the Dasa project to be profitable at a uranium price of $35 (U.S.)/lb, improving to an IRR of over 44 per cent at today's current spot price, now over $50 (U.S.)/lb. Having signed two offtake agreement with Western utilities at favourable prices and based on positive discussions at the recent World Nuclear Fuel Cycle conference in The Hague, we expect additional offtake agreements will materialize as we continue to derisk the Dasa project."

Outlook

Dasa uranium project

• The company's banking syndicate is now expected to finalize a term sheet by the end of Q2 2023 and to approve the debt facility of the project financing prior to the end of Q3 2023.
• Additional uranium sales contracts with international electric utilities are expected once project financing details are announced.
• The company plans to issue a newly updated MRE in Q2 2023, followed by a revised feasibility study in Q4 2023.
• Detailed engineering is in progress with earthworks under way and civil works expected to begin in Q4 2023. Components for the Dasa Plant construction will begin to arrive on site by the end of Q4 2023.
• The Main decline to the Dasa deposit is expected to reach the top of the Flank zone ore in Q4 2023, when initial development ore will be brought to surface.

Turkish zinc joint venture

• The Electric Arc Furnace Dust (EAFD) recycling plant is expected to operate at full capacity through to the end of May, 2023, however supply interruptions of EAFD are expected to continue until Turkish steel mills resume historic operating levels.

Comparative results

The attached table summarizes comparative results of operations of the company.

The consolidated financial statements reflect the equity method of accounting for Global Atomic's interest in the Turkish JV. The company's share of net earnings and net assets are disclosed in the notes to the financial statements.

Revenues include management fees and sales commissions received from the joint venture. These are based on joint venture revenues generated and zinc concentrate tonnes sold.

General and administration costs at the corporate level include general office and management expenses, stock option awards, depreciation, costs related to maintaining a public listing, professional fees, audit, legal, accounting, tax and consultants' costs, insurance, travel, and other miscellaneous office expenses.

Share of net earnings from joint venture represents Global Atomic's equity share of net earnings from the Turkish JV. In view of limited production, lower zinc prices in 2022, extraordinary expenses due to the earthquake, resulting in a negative equity income of $1.4-million.

Uranium business

Mineral resources and reserves

On Jan. 9, 2023, the company revised its Dasa project, phase 1, feasibility study, which was revised primarily to apply zero grade to inferred resources included in certain stopes of the phase 1 mine plan.

The zones shown in the aforementioned section vary in grades, with zone 1 (Flank zone) contributing the largest portion of the U3O8 tonnes.

The inferred resources, representing 4.4 per cent of total mineral resources to be mined in phase 1, were treated as zero grade waste in the revised feasibility study. Impacts of this grade change are summarized in the attached table

Reserve expansion

The company completed a 15,000-metre drill program at its Dasa project that began in Q4 2021, which due to its success was expanded to include another 1,000 metres. Drill results indicate that zones 2, 2a and 2b now represent a contiguous zone that joins up with zone 3 and is estimated to be approximately three times larger than initially defined. Recent drilling has also targeted the extension of zone 4.

On the strength of results from the overall drill program, Global Atomic is updating the Dasa mineral resource estimate (MRE) and will in turn update its mine plan which is expected to result in larger and contiguous mining zones, reduced underground development work between the zones, lower operating costs and an increase in mineable reserves.

The updated MRE is expected to be completed in Q2 2023. The company plans to use the revised MRE to complete a revised mine plan for the Dasa project, followed by a revised feasibility study in Q4 2023.

Niger mining company

Under Niger's mining code, a Niger mining company must be incorporated to carry out mining activities. Societe Miniere de Dasa S.A. (SOMIDA) was incorporated on Aug. 11, 2022. The Republic of Niger received its 10-per-cent free carried interest in the shares of SOMIDA and elected to subscribe for an additional 10 per cent, resulting in a total ownership of 20 per cent of the shares. Under the terms of the company's mining agreement, the Republic of Niger commits to finance its proportionate share of capital costs and operating deficits for the additional 10-per-cent interest. The Republic of Niger has no further option to increase its ownership.

Dasa mine development and construction

The company has entered into an agreement with CMAC-Thyssen International Inc., a contract miner based in Val d'Or, Que., to provide contract mining services in the development of the Dasa underground mine over the first 24 months of mining. Following the March, 2020, closure of the Cominak underground uranium mine in Arlit, there is a pool of skilled miners available to the company in Niger. CMAC is providing training, development and oversight of the Niger work force with the new equipment that will be used at site. Initial mining will comprise only ramp development during the first 12 months, followed by access and level development.

The first blast of the portal took place on Nov. 5, 2022, marking the start of the underground development. Surface infrastructure to support CMAC was completed during 2022. At the Dasa mine, operations are proceeding on schedule with 325 metres of underground development completed at the end of April, 2023, on the decline ramp plus for remuck and safety bays.

The company engaged DCPL and Lycopodium to commence the EPCM process to build Dasa's ore processing plant. DCPL is focusing on the basic and detailed engineering required for the final design of the Dasa process plant. Lycopodium is providing project management, procurement, project controls and a project execution plan services. Lycopodium's engagement is expected to extend to construction management in view of their extensive West African experience.

Project financing

Global Atomic has received a letter of interest (LOI) from Export Development Canada (EDC) confirming their interest in working with the company on project financing $75-million (U.S.) of the Dasa project. On June 15, 2022, Global Atomic also received additional letters of intent such that a syndicate has been formed to finance the Dasa project. The syndicate is comprised of North American financial institutions, including EDC.

Due diligence has been underway since June, 2022, and has largely been completed. The company's banking syndicate is expected to finalize a term sheet by the end of Q2 2023 and to complete documentation and close the debt facility by the end of Q3 2023.

Turkish zinc EAFD operations

The company's Turkish EAFD business operates through a joint venture with Befesa Zinc S.A.U., an industry leading Spanish company that operates a number of Waelz kilns throughout Europe, North America and Asia. On Oct. 27, 2010, Global Atomic and Befesa established joint venture, known as Befesa Silvermet Turkey S.L. (BST or the Turkish JV), to operate an existing plant and develop the EAFD recycling business in Turkiye. BST is held 51 per cent by Befesa and 49 per cent by Global Atomic. A shareholders agreement governs the relationship between the parties. Under the terms of the shareholders agreement, management fees and sales commissions are distributed pro rata to Befesa and Global Atomic. Net income earned each year in Turkiye, less funds needed to finance operations, must be distributed to the partners annually, following the BST annual meeting, which is usually held in the second quarter of the following year.

BST owns and operates an EAFD processing plant in Iskenderun, Turkey. The plant processes EAFD containing 25 per cent to 30 per cent zinc that is obtained from electric arc steel mills, and produces a zinc concentrate grading 65 per cent to 68 per cent zinc that is then sold to zinc smelters.

Global Atomic holds a 49-per-cent interest in the Turkish JV and, as such, the investment is accounted for using the equity basis of accounting. Under this basis of accounting, the company's share of the BST's earnings is shown as a single line in its consolidated statements of income (loss).

The attached table summarizes comparative operational metrics of the Iskenderun facility.

In Q1 2023, world steel production decreased by 0.1 per cent over the comparable 2022 period. The impact by region was mixed. In Q1 2023 compared with Q1 2022: Chinese production increased 6.1 per cent; European Union production decreased 10.1 per cent; North American production decreased 4.1 per cent, and Turkish production decreased by 21.5 per cent.

In April, 2023, the World Steel Association published its short-term outlook for demand, which projected 2.3-per-cent overall global demand growth in 2023 and a further growth of 1.7 per cent in 2024. Sharp decreases in construction activities due to the Turkish Lira's devaluation and high inflation lead a decrease in steel demand in 2022. However, the construction sector is expected to grow by 15 per cent due to the rebuilding and reinforcing efforts in high earthquake-risk areas.

The impact of the Ukrainian conflict on global steel markets is uncertain, however, as exports from Russia and Ukraine have historically accounted for 10 per cent of global steel exports, it is likely a material percentage of this supply will be replaced by increased production in other countries.

The attached table summarizes comparative results for Q1 2023 and Q1 2022 of the Turkish zinc JV at 100 per cent.

Zinc concentrates are sold to smelters in United States dollars. Because the Turkish Lira is the functional currency of the Turkish operations, sales are converted to Turkish Lira at the date of the sale when funds are subsequently received. When the Turkish Lira depreciated in both Q1 2022 and Q1 2023, exchange gains were recognized on those sales. In calculating EBITDA, these exchange changes related to the functional and reporting currencies are treated as operations related (in example, above the EBITDA subtotal).

All the financial statement line items included in the Turkish zinc JV consolidated statements of income (loss) for the three-month period ended March 31, 2023 include hyperinflation impact for the three-month period ended March 31, 2023, and the impact of inflation on income and expenses recognized in the Q1 2022 are not restated because it has already been presented in the stable currency.

The Turkish zinc JV incurred significant deterioration in revenues in Q1 2023 compared with Q1 2022, due to processing less EAFD and lower zinc prices. Sales are recorded upon receipt at the smelter, which means that recorded sales in any given month generally represent the concentrate from EAFD processed in the prior month. Sales for Q1 2023 were produced in only December, 2022, whereas sales for Q1 2022 were produced in December, 2021, through February, 2022. The plant was under a scheduled maintenance shutdown in January, 2023. Due to the earthquake on Feb. 6, 2023, the recycling plant resumed operation following a thorough inspection in March, 2023, where revenue from the March, 2023, production will be recognized in Q2 2023.

The Turkish zinc JV realized significant increases in expenses. The Ukrainian conflict, post-COVID demand increases, raw material shortages and global logistics challenges resulted in substantial inflationary pressures on all costs. Moreover, The Turkish zinc JV also incurred extraordinary expenses related to the massive earthquake like financial support to the employees, fixed costs incurred due to the unplanned stoppage have in combination resulted in a negative EBITDA.

The cash balance of the Turkish JV was $600,000 (U.S.) at March 31, 2023.

The local Turkish revolving credit facility balance was $12.4-million (U.S.) at March 31, 2023 (Dec. 31, 2022 -- $8.3-million (U.S.)) and bears interest at 10 per cent.

QP statement

This news release has been reviewed and approved by A. Christophe Din, MSc, MAus, IMM, exploration manager, at Global Atomic's subsidiary, SOMIDA, in the Republic of Niger, who is a qualified person under National Instrument 43-101 -- Standards of Disclosure for Mineral Properties. Mr. Din holds a Diplome de Formation Specialisee from Ecole Nationale Superieure des Mines de Paris and is a member of the Australian Institute of Geoscientists.

About Global Atomic Corp.

Global Atomic is a publicly listed company that provides a unique combination of high-grade uranium mine development and cash-flowing zinc concentrate production.

The company'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. With the issuance of the Dasa mining permit and an environmental compliance certificate by the Republic of Niger, the Dasa project is fully permitted for commercial production. The phase 1 feasibility study for Dasa was filed in December, 2021, and estimates yellowcake delivery to utilities to commence in 2025. Mine excavation began in Q1 2022.

Global Atomic's base metals division holds a 49-per-cent interest in the Befesa Silvermet Turkey SL (BST) joint venture, which operates a modern zinc production plant, located in Iskenderun, Turkey. The plant recovers zinc from electric arc furnace dust (EAFD) to produce a high-grade zinc oxide concentrate, which is sold to zinc smelters around the world. The company's joint venture partner, Befesa Zinc SAU holds a 51-per-cent interest in and is the operator of the BST joint venture. Befesa is a market leader in EAFD recycling, with approximately 50 pe cent of the European EAFD market and facilities located throughout Europe, Asia and the United States.

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