GLOBAL ATOMIC CORPORATION
CONDENSED INTERIM
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED
MARCH 31, 2024 & 2023
(EXPRESSED IN CANADIAN DOLLARS)
(UNAUDITED)
Global Atomic Corporation | |||||
Condensed Interim Consolidated Statements of Financial Position | |||||
(Expressed in Canadian Dollars) (Unaudited) | |||||
As at | |||||
Note | 31-Mar | 31-Dec | |||
reference | 2024 | 2023 | |||
ASSETS | |||||
Current assets | |||||
Cash and cash equivalents | $ | 18,572,407 | $ | 24,857,915 | |
Accounts and other receivables | 4,12 | 625,754 | 683,283 | ||
Prepaid expenses | 194,022 | 207,700 | |||
19,392,183 | 25,748,898 | ||||
Non-current assets | |||||
Property, plant and equipment | 5 | 145,905,549 | 129,986,343 | ||
Intangible assets | 316,098 | 339,155 | |||
Advance payments for mineral properties | 5 | 10,514,586 | 7,525,740 | ||
Exploration and evaluation assets | 6 | 1,536,432 | 1,370,358 | ||
Investment in joint venture | 7 | 13,523,632 | 12,628,251 | ||
Total assets | $ | 191,188,480 | $ | 177,598,745 | |
LIABILITIES AND EQUITY | |||||
Current liabilities | |||||
Accounts payable and accrued liabilities | 8 | $ | 7,856,360 | $ | 6,745,812 |
Current portion of long-term debt | 9 | 1,342,925 | 1,342,373 | ||
Current portion of lease liabilities | 10 | 2,654,097 | 2,746,023 | ||
11,853,382 | 10,834,208 | ||||
Non-current liabilities | |||||
Long-term accounts payable and accrued liabilities | 8 | 1,626,000 | 1,587,120 | ||
Long-term debt | 9 | 3,137,431 | 3,471,736 | ||
Long-term lease liabilities | 10 | 2,927,186 | 3,519,912 | ||
Total liabilities | 19,543,999 | 19,412,976 | |||
Equity | |||||
Share capital | 13 | 180,972,303 | 169,428,131 | ||
Share purchase warrants | 14 | 6,870,754 | 8,477,302 | ||
Contributed surplus | 15 | 21,970,244 | 21,532,188 | ||
Retained earnings (deficit) | (16,573,798) | (18,956,976) | |||
Accumulated other comprehensive (loss) | (22,059,112) | (22,723,881) | |||
Shareholders' equity | 171,180,391 | 157,756,764 | |||
Non-controlling interests in subsidiary | 19 | 464,090 | 429,005 | ||
Total equity | 171,644,481 | 158,185,769 | |||
Total liabilities and equity | $ | 191,188,480 | $ | 177,598,745 | |
Commitments and contingent liabilities | 20 |
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
On behalf of the Board:
"Stephen G. Roman" | "Dean Chambers" |
Stephen G. Roman | Dean Chambers |
Chairman, President & CEO | Non-Executive Director |
2
Global Atomic Corporation
Condensed Interim Consolidated Statements of Income (Loss)
(Expressed in Canadian Dollars) (Unaudited)
Three months ended March 31, | |||||
Note | |||||
reference | 2024 | 2023 | |||
Revenues | $ | 271,463 | $ | 130,841 | |
Revenues from operations | 271,463 | 130,841 | |||
General and administration | 11 | 2,199,221 | 2,832,831 | ||
Finance income, net | (241,631) | (71,468) | |||
Foreign exchange (gain) loss | (3,750,362) | 1,210,716 | |||
Share of net (income) loss from joint venture | 7 | (333,686) | 1,388,274 | ||
Net income (loss) before income taxes | $ | 2,397,921 | $ | (5,229,512) | |
Current income tax expense | - | - | |||
Deferred income tax expense | - | - | |||
Net income (loss) | $ | 2,397,921 | $ | (5,229,512) | |
Net income (loss) attributable to: | |||||
Shareholders of the Company | 2,383,178 | (5,237,663) | |||
Non-controlling interests | 19 | 14,743 | 8,151 | ||
Basic net income (loss) per share | 17 | $0.01 | ($0.03) | ||
Diluted net income (loss) per share | 17 | $0.01 | ($0.03) | ||
Basic weighted-average number of | |||||
shares outstanding | 17 | 208,080,080 | 184,583,128 | ||
Diluted weighted-average number of | |||||
shares outstanding | 17 | 213,208,175 | 184,583,128 |
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
3
Global Atomic Corporation | ||||
Consolidated Statements of Comprehensive Income (Loss) | ||||
(Expressed in Canadian Dollars) (Unaudited) | ||||
Three months ended March 31, | ||||
2024 | 2023 | |||
Net income (loss) for the period | $ | 2,397,921 | $ | (5,229,512) |
Other comprehensive income for the period | ||||
Items that may be subsequently classified to statements of income | ||||
Currency translation adjustment of Niger operations | 123,416 | 1,129,759 | ||
Currency translation adjustment of joint venture | 561,695 | 1,589,017 | ||
685,111 | 2,718,776 | |||
Total other comprehensive income | $ | 685,111 | $ | 2,718,776 |
Comprehensive income (loss) | $ | 3,083,032 | $ | (2,510,736) |
Comprehensive income (loss) attributable to: | ||||
Shareholders of the Company | 3,047,947 | (2,518,218) | ||
Non-controlling interests | 35,085 | 7,482 |
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
4
Global Atomic Corporation
Condensed Interim Consolidated Statements of Changes in Equity
(Expressed in Canadian Dollars) (Unaudited)
Share | Retained | Other | Attributable to | |||||||||||||
Note | Purchase | Contributed | Earnings | Comprehensive | Shareholders of | Non-controlling | ||||||||||
reference | Share Capital | Warrants | Surplus | (Deficit) | Income | the Company | Interests | |||||||||
Balance, December 31, 2023 | $ | 169,428,131 | $ | 8,477,302 | $ | 21,532,188 | $ | (18,956,976) | $ | (22,723,881) | $ | 157,756,764 | $ | 429,005 | $ 158,185,769 | |
Warrants exercised | 13,14 | 10,606,548 | (1,606,548) | - | - | - | 9,000,000 | - | 9,000,000 | |||||||
Stock option expense | 15 | - | - | 826,004 | - | - | 826,004 | - | 826,004 | |||||||
Stock options exercised | 15 | 937,624 | - | (387,948) | - | - | 549,676 | - | 549,676 | |||||||
Net income (loss) | - | - | - | 2,383,178 | - | 2,383,178 | 14,743 | 2,397,921 | ||||||||
Other comprehensive income (loss) | - | - | - | - | 664,769 | 664,769 | 20,342 | 685,111 | ||||||||
Balance, March 31, 2024 | $ | 180,972,303 | $ | 6,870,754 | $ | 21,970,244 | $ | (16,573,798) | $ | (22,059,112) | $ | 171,180,391 | $ | 464,090 | $ 171,644,481 | |
Balance, December 31, 2022 | $ | 108,306,043 | $ | 4,126,058 | $ | 14,656,139 | $ | (2,353,296) | $ | (23,657,112) | $ | 101,077,832 | $ | 431,492 | $ 101,509,324 | |
Shares issued | 49,640,922 | 6,361,579 | - | - | - | 56,002,501 | - | 56,002,501 | ||||||||
Shares to be issued | 25,000 | - | - | - | - | 25,000 | - | 25,000 | ||||||||
Share issue costs | (4,028,322) | - | - | - | - | (4,028,322) | - | (4,028,322) | ||||||||
Broker warrants issued | - | 509,176 | - | - | - | 509,176 | - | 509,176 | ||||||||
Stock option expense | - | - | 1,497,157 | - | - | 1,497,157 | - | 1,497,157 | ||||||||
Stock options exercised | 1,467,389 | - | (633,229) | - | - | 834,160 | - | 834,160 | ||||||||
Net income (loss) | - | - | - | (5,237,663) | - | (5,237,663) | 8,151 | (5,229,512) | ||||||||
Other comprehensive income | - | - | - | - | 2,719,445 | 2,719,445 | (669) | 2,718,776 | ||||||||
Balance, March 31, 2023 | $ | 155,411,032 | $ | 10,996,813 | $ | 15,520,067 | $ | (7,590,959) | $ | (20,937,667) | $ | 153,399,286 | $ | 438,974 | $ 153,838,260 |
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
5
Global Atomic Corporation
Condensed Interim Consolidated Statements of Cash Flows
(Expressed in Canadian Dollars) (Unaudited)
Three months ended March 31, | |||||
Note | |||||
reference | 2024 | 2023 | |||
Cash generated from (used in) | |||||
Operating activities | |||||
Net income (loss) | $ | 2,397,921 | $ | (5,229,512) | |
Unrealized foreign exchange (gain) loss | (3,649,634) | 1,131,677 | |||
Share of net (earnings) loss from joint venture | 7 | (333,686) | 1,388,274 | ||
Stock option expense | 15 | 826,004 | 1,497,157 | ||
Depreciation expense | 61,241 | 69,644 | |||
Interest income | (249,500) | (71,468) | |||
Interest expense on lease liability | 2,917 | 15,253 | |||
(944,737) | (1,198,975) | ||||
Non-cash working capital items: | |||||
Accounts receivable | 57,529 | (30,895) | |||
Prepaid expenses | 13,678 | 42,564 | |||
Accounts payable and accrued liabilities | 8 | (1,901,265) | (152,862) | ||
Cash flows used in operating activities | (2,774,795) | (1,340,168) | |||
Financing activities | |||||
Public offering and private | |||||
placement of common shares | 13 | - | 56,002,501 | ||
Share issue costs | 13 | - | (2,777,280) | ||
Common shares to be issued | - | 25,000 | |||
Warrants exercised | 14 | 9,000,000 | - | ||
Stock options exercised | 15 | 549,676 | 834,160 | ||
Repayment of lease obligations | (836,747) | (215,976) | |||
Repayment of long-term debt | (457,323) | - | |||
Cash flows generated from financing activities | 8,255,606 | 53,868,405 | |||
Investing activities | |||||
Advance payments for mineral properties | (4,422,239) | (1,938,333) | |||
Purchase property, plant & equipment | 5 | (7,402,080) | (6,953,529) | ||
Purchase intangible assets | - | (68,560) | |||
Exploration and evaluation expenditures | 6 | (165,566) | (54,030) | ||
Interest received | 249,500 | 71,468 | |||
Cash flows used in investing activities | (11,740,385) | (8,942,984) | |||
Net change in cash | (6,259,574) | 43,585,253 | |||
Effect of exchange rate changes on cash | (25,934) | 68,359 | |||
Cash, beginning of period | 24,857,915 | 8,400,008 | |||
Cash, end of period | $ | 18,572,407 | $ | 52,053,620 | |
Interest paid during the period | $ | 2,917 | $ | 15,253 |
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
6
Global Atomic Corporation
Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the Three Months ended March 31, 2024 and 2023
(Expressed in Canadian Dollars) (Unaudited)
1. Nature of Operations
Global Atomic Corporation and its subsidiaries (collectively, the "Company" or "Global Atomic") have two principle lines of business:
- the processing of electric arc furnace dust ("EAFD") obtained from steel companies in Türkiye through a Waelz kiln process to recover zinc concentrates that are then treated by zinc smelters ("EAFD Business"); and
- the acquisition, exploration and development of uranium properties in Niger ("Uranium Business").
Global Atomic Corporation, the ultimate parent, is a corporation incorporated under the laws of Ontario, Canada and its registered office is 8 King Street East, Suite 1700, Toronto, Ontario, M5C 1B5. Global Atomic Corporation is also the highest level at which these financial statements are consolidated.
The Company's EAFD activities are conducted through Befesa Silvermet Turkey, S.L. ("BST"), a Spanish incorporated joint venture with Befesa Zinc S.A.U. ("Befesa"). The joint venture is held 51% by Befesa and 49% by Global Atomic. The relationship between the joint venture partners is governed by a Shareholders Agreement. The joint venture was established to operate EAFD activities within Türkiye. At present, BST operates one EAFD facility located in Iskenderun, Türkiye, through wholly-owned subsidiaries. The unaudited condensed interim consolidated financial statements for the three months ended March 31, 2024 and 2023 reflect the impact of using the equity method to account for Global Atomic's interest in the joint venture, with the Company's share of net earnings and net assets separately disclosed (Note 7).
The Company's mineral resource properties are located in Niger. Through its wholly-owned subsidiary, Global Atomic Fuels Corporation ("GAFC"), the Company held six Mining Agreements and related Exploration Permits, on which it has conducted exploration activities for uranium. The Exploration Permits expired on December 17, 2023. GAFC holds a 100% interest in the shares of Global Uranium Niger Inc.("GUNI"), a Niger corporation through which GAFC conducts its exploration activities. In accordance with the new Niger Mining Code, GUNI has applied for new Exploration Permits ('Cahiers des Charges"). Management expects that such Exploration Permits will be granted shortly.
On December 23, 2020, GAFC was granted a Mining Permit for the Dasa Project on behalf of a Niger mining company to be incorporated. The Mining Permit has an initial term of 10 years and is renewable until the resource has been fully depleted. The Company's Niger mining subsidiary, Société Minière de DASA S.A. ("SOMIDA") was incorporated on August 11, 2022 with an initial share capital of 2 billion West African CFA Franc ("CFA") ($3,985,627). In accordance with the mining agreement signed by GAFC and the Republic of Niger on September 25, 2007, the latter received a 10% free carried interest in the mining subsidiary and exercised its right to subscribe to an additional 10% by making its respective contribution of CFA 200 million ($398,563) to the initial share capital of SOMIDA, resulting in a total ownership of 20% of the shares of SOMIDA. Under the terms of the Company's Mining Agreement, the Republic of Niger commits to fund its proportionate share of capital costs and operating deficits for such additional 10% interest. The Republic of Niger has no further option to increase its ownership.
2. Basis of Presentation and Statement of Compliance
The unaudited condensed interim consolidated financial statements of the Corporation have been prepared in accordance with International Financial Reporting Standards ("IFRS") and IFRS Interpretations Committee ("IFRIC") interpretations applicable to companies reporting under IFRS, including IAS 34, Interim Financial Reporting and include the operating results of Global Atomic and its subsidiaries and joint ventures. Accordingly, certain information and disclosure normally included in annual financial statements prepared in accordance with IFRS have been omitted or condensed. These unaudited condensed interim consolidated financial statements should be read in conjunction with the Corporation's annual financial statements for the year ended December 31, 2023, which were prepared in accordance with IFRS.
These unaudited condensed interim consolidated financial statements as at and for the three months ended March 31, 2024 and 2023 were authorized for issuance on May 13, 2024 by the Global Atomic Board of Directors.
7
Global Atomic Corporation
Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the Three Months ended March 31, 2024 and 2023
(Expressed in Canadian Dollars) (Unaudited)
3. Material Accounting Policy Information, Accounting Standards and Amendments
The accounting policies adopted are consistent with those of the Company's financial statements for the year ended December 31, 2023.
4. | Accounts and Other Receivables | ||||
March 31, | December 31, | ||||
2024 | 2023 | ||||
Management fees & sales commissions receivable (Note 12) | $ | 415,543 | $ | 351,629 | |
Harmonized sales tax receivable | 210,034 | 331,457 | |||
Other | 177 | 197 | |||
Total accounts and other receivables | $ | 625,754 | $ | 683,283 |
5. Property, Plant and Equipment and Advance Payments for Mineral Properties
Property, plant and equipment balances as at March 31, 2024 and December 31, 2023 are as follows:
Plant and | Right of use | |||||||
Mineral property | equipment | asset | Total | |||||
COST | ||||||||
Balance at December 31, 2022 | 74,340,064 | 8,376,066 | 1,179,400 | 83,895,530 | ||||
Additions | 8,235,081 | 1,292,857 | 223,373 | 9,751,311 | ||||
Exchange differences | (76,398) | (7,250) | 19,891 | (63,757) | ||||
Balance at March 31, 2023 | 82,498,747 | 9,661,673 | 1,422,664 | 93,583,084 | ||||
Additions | 31,900,096 | 7,543,595 | 7,225,708 | 46,669,399 | ||||
Exchange differences | (3,114,417) | (371,853) | (153,797) | (3,640,067) | ||||
Balance at December 31, 2023 | 111,284,426 | 16,833,415 | 8,494,575 | 136,612,416 | ||||
Additions | 13,471,103 | 233,652 | - | 13,704,755 | ||||
Exchange differences | 3,518,980 | 416,556 | 173,855 | 4,109,391 | ||||
Balance at March 31, 2024 | $ | 128,274,509 | $ | 17,483,623 | $ | 8,668,430 | $ | 154,426,562 |
ACCUMULATED DEPRECIATION | ||||||||
As at December 31, 2022 | - | (1,143,195) | (517,619) | (1,660,814) | ||||
Depreciation | - | (445,146) | (108,321) | (553,467) | ||||
Exchange differences | - | (1,697) | (13,735) | (15,432) | ||||
As at at March 31, 2023 | - | (1,590,038) | (639,675) | (2,229,713) | ||||
Depreciation | - | (2,493,708) | (2,091,118) | (4,584,826) | ||||
Exchange differences | - | 70,840 | 117,626 | 188,466 | ||||
As at December 31, 2023 | - | (4,012,906) | (2,613,167) | (6,626,073) | ||||
Depreciation | - | (1,108,297) | (656,800) | (1,765,097) | ||||
Exchange differences | - | (86,720) | (43,123) | (129,843) | ||||
As at March 31, 2024 | $ | - | $ | (5,207,923) | $ | (3,313,090) | $ | (8,521,013) |
NET BOOK VALUE | ||||||||
As at December 31, 2023 | $ | 111,284,426 | $ | 12,820,509 | $ | 5,881,408 | $ | 129,986,343 |
As at March 31, 2024 | $ | 128,274,509 | $ | 12,275,700 | $ | 5,355,340 | $ | 145,905,549 |
8
Global Atomic Corporation
Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the Three Months ended March 31, 2024 and 2023
(Expressed in Canadian Dollars) (Unaudited)
5. Property, Plant and Equipment and Advance Payments for Mineral Properties (Continued)
At March 31, 2024, advance payments for mineral properties amounting to $10.5 million consist of contractual deposits paid to suppliers and are related to advances made for long lead items and materials to be used in the mining and processing for the Dasa Project (December 31, 2023: $7.5 million).
Mining Code of the Republic of Niger
On July 5, 2022, the President of the Republic of Niger signed into law a new Mining Code to consolidate the various amendments to the prior Mining Code and clarify certain aspects. Notwithstanding, all existing Mining Agreements and Permits remain valid for their existing terms. Global Atomic's Adrar Emoles 3 Mining Agreement also contain a further provision to guarantee the stability of the duties, taxes, royalties and tax benefits as they existed at the time the Mining Agreement was entered into, unless the rates drop, in which case, the holder of the Mining Agreement will benefit from the lower rates.
The mining royalty rates under the former Mining Code and the Mining Agreement are based on a 5.5% to 12% of revenues dependent on earnings margins. Under the new Mining Code, the royalty rate on uranium mining is fixed at 7%.
The Company expects the provisions of the new Mining Code will apply to SOMIDA after the expiry of the current Mining Agreement in September 2027. The Mining Code refers to numerous regulations, which have not yet been announced. Until such regulations are announced, the Company is not able to fully assess the impact of the new Mining Code on SOMIDA's operations.
Under the new Mining Code, the concept of an umbrella Mining Agreement covering both the exploration and exploitation phases no longer applies. Exploration Permits (known as Cahiers des Charges) are now separately issued for a period of 4 years with two 3 year renewals. Upon application for a Mining Permit, a Niger mining corporation is established to enter into a Mining Convention that includes all the terms and conditions of operations that were previously included in the umbrella Mining Agreements. The rights of the Republic of Niger to a free carried interest plus the right to participate at a higher level have not changed.
6. Exploration and Evaluation Assets
On December 22, 2017, upon the acquisition of GAFC, the Company acquired the following permits and associated exploration and evaluation assets in the Republic of Niger:
Adrar Emoles Exploration Permits
In September 2007, GAFC entered into two Mining Agreements for a term of twenty years with the Republic of Niger and was subsequently granted the Adrar Emoles 3 and 4 Exploration Permits. With the granting of the Dasa Project Mining Permit on December 23, 2010, the area of the Mining Permit (approximately 25 km2) was carved out from the Adrar Emoles 3 Exploration Permit.
The Exploration Permits for Adrar Emoles 3 and 4 expired on December 17, 2023 and application has been made by GUNI for new Exploration Permits on these properties under the new Mining Code. Management expects the granting of these Exploration Permits imminently.
Tin Negoran Exploration Permits
In February 2007, GAFC entered into four Mining Agreements for a term of twenty years with the Republic of Niger and subsequently was granted the Tin Negoran 1, 2, 3 and 4 Exploration Permits. These permits expired on December 17, 2023 and in accordance with the new Mining Code, GUNI is applying for a new Exploration Permit.
The Company's exploration activities are as follows:
March 31, | December 31, | |||
2024 | 2023 | |||
Exploration and evaluation assets - beginning | $ | 1,370,358 | $ | 1,115,983 |
Drilling, assays and related costs | 165,566 | 241,167 | ||
Exchange differences | 508 | 13,208 | ||
Exploration and evaluation assets - ending | $ | 1,536,432 | $ | 1,370,358 |
9
Global Atomic Corporation
Notes to the Unaudited Condensed Interim Consolidated Financial Statements For the Three Months ended March 31, 2024 and 2023
(Expressed in Canadian Dollars) (Unaudited)
7. Investment in Joint Venture
At March 31, 2024, the Company holds a 49% (December 31, 2023: 49%) interest in the BST joint venture, with the remaining 51% held by Befesa. The BST joint venture is governed by the Shareholders Agreement between the joint venture partners that requires unanimous approval for certain key strategic, operating, investing and financing policies of the BST joint venture. The investment in the BST joint venture is accounted for using the equity method. There are no publicly quoted market prices for BST.
Summarized financial information of BST on a 100% basis is as follows:
Summarized consolidated statements of financial position:
March 31, | December 31, | |||||
2024 | 2023 | |||||
Assets | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | 3,102,023 | $ | 2,533,472 | ||
Other current assets (excluding cash and cash equivalents) | 7,021,735 | 9,856,601 | ||||
Non-current assets | (1) | 37,606,748 | 36,218,046 | |||
$ | 47,730,506 | $ | 48,608,119 | |||
Liabilities | ||||||
Current liabilities | ||||||
Accounts payable and accrued liabilities | $ | 3,300,071 | $ | 5,979,308 | ||
Income tax payable | 247,725 | - | ||||
Loans payable | (2) | 12,241,532 | 12,652,168 | |||
Long-term liabilities | ||||||
Loans payable | (2) | 3,246,630 | 3,165,198 | |||
Other long-term liabilities (excluding loans payable) | 1,095,299 | 1,039,504 | ||||
$ | 20,131,257 | $ | 22,836,178 | |||
Net assets | $ | 27,599,249 | $ | 25,771,941 | ||
The Company's equity share of net assets of joint venture | $ | 13,523,632 | $ | 12,628,251 |
Note 1: Non-current assets comprise $23.6 million property, plant and equipment plus $14 million deferred tax asset ($22.8 million property, plant and equipment plus $13.3 million deferred tax asset at December 31, 2023).
Note 2: At March 31, 2024, loans payable comprise US$11.4 million revolving credit facility with an effective interest rate of 11% (US$12 million at December 31, 2023).
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Global Atomic Corp. published this content on 13 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 May 2024 21:53:04 UTC.