Impact: Slightly Negative to Neutral
Global Atomic (GLO) announced Q2/23 results and provided an update on its flagship, 80%-owned Dasa uranium project in Niger and its Befesa zinc JV in Turkey. EPS of neg. $0.03 was reported below our expectations of neg. $0.01. The second quarter was anticipated to be slightly weaker due to lower zinc sales, which was primarily attributed to the Befesa zinc JV plant shutdown that was extended due to the earthquake. We do not believe quarterly earnings from Global Atomic warrant much attention until such a time that uranium production at Dasa, which is currently under construction, ramps up. While the project has been moving forward, and some in-country clarity has been achieved, there could be external threats to Niger, and management has started to review its development schedule and preserve cash. Essential engineering work continues. We believe this uncertainty may last for an unknown duration, and we are eager to hear if the new government will be supportive of the project, while watching for any chance of armed conflict. A contingency plan could see a 6–12-month production delay due to delays in commissioning the mill. We continue to believe that the mill route requires additional debt and equity funding, following necessary government support.
