I have held Global Atomic for almost two years now, and the position is down about 30% from my average.
I could go on and on about their Dasa project and the future prospects of what will be one of the world’s most impressive uranium mines, but that doesn’t really matter much to the current state of the company.
As it stands, Global Atomic is almost entirely a financing play, it’s a binary on whether they get DFC/JV financing before the need for another raise. If they get this financing, a raise may still be on the table to bridge the gap until the money lands in the account, but it will be on favorable terms, since the stock price should re-rate on financing news. When a situation becomes as binary as this one, it is difficult to get any real edge on the timing, since we simply don’t and can’t know the state of the negotiations without access to illegal insider information.
Global Atomic had C$30m in cash at the end of June. Cash burn is roughly C$10m per month, of which only C$0.3m is operating activities. But since they’re actively building the mine, they can’t just put the project on hold and wait for financing. They need about C$345m to complete the project, so if they dilute the entire company, I suppose they almost get there. All in all, it looks like the project will be completed regardless, and the biggest question is whether financing is secured before our positions become worthless.
The Company continues to be actively engaged with a U.S. Development Bank (the “Bank“) regarding a debt facility for the Dasa Project in addition to continued discussions with potential JV partners to acquire a minority interest in the Dasa Project.
Global keeps saying that the talks are progressing and that they are actively engaged with the DFC, whatever that means.
The Company is also pursuing other funding options which may be required to finance any gap between approval and release of funds by the Bank or potential JV partner.
So the entire investment case currently rests on binary financing and the timing of it. I won’t be delving further into the specifics of the project or the state of the uranium market as a whole until this issue is resolved, as it would take away from what matters and create a false image of positivity.
I am bullish on uranium longer term, and the best way to express this is likely either an index like URNM or simply buying a uranium trust like U.UN, so you get the benefit of the price increase. Global can trade like a uranium junior again, and become a producer in H2 of 2028 if all goes well. If we avoid much further dilution, this will be great for current shareholders. Otherwise, it’s something to look further into once financing is secured.
I have held a position for a long time now, and my patience is running thin. If there are no further developments besides management’s repeated guidance and repeated misses by the end of September, I will exit the position and take the loss. As it stands, Global Atomic is simply a binary on financing, and you’re speculating on a position that has the potential to become an investment in the future.