Global Atomic inks letter of intent with western utility for uranium supply
(Kitco News) - Uranium developer Global Atomic (TSX: GLO) announced yesterday that it has received a letter of intent (LOI) from a second major western utility for the procurement of uranium from the company’s Dasa project in Niger.
The company said that the LOI represents the supply of up to 2.4 million pounds U3O8 within a multi-year delivery window beginning in 2025, representing about 7% of Dasa’s annual Phase 1 production over the period.
“The revenue potential of this award, valued at US$140 million in real terms, reflects the company’s continued 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,” it added.
The company noted that pricing is in the context of the market utilizing a blended formula, adding that the award is subject to the successful conclusion of a purchase-sale contract, which the company will now progress.
President and CEO Stephen G. Roman commented, “This award adds to the milestone off-take arrangement we announced earlier this year and demonstrates the credibility that Dasa is building within the uranium market. It follows on the heels of the recent processing plant EPCM announcement, with underground mining set to begin next month.
“Our Dasa project has a long-life expectancy, with the 12-year Phase 1 representing approximately 20% of the known deposit. We look forward to fostering this new and important supply relationship over the decades to come."
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. The Phase 1 feasibility study for Dasa was filed in December 2021 and estimates uranium production to commence by the end of 2024. Mine excavation began in Q1 2022.
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