Energy Fuels Announces Q1-2024 Results, Including Continued Net Income, Continued Successful Uranium Ramp-Up, Commissioning Rare Earth Oxides Production, and Steps to Secure World-Scale Sources of Heavy Mineral Sands and Monazite
Conference Call and Webcast on
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Recorded Net Income of Over
$3 Million: During the three months endedMarch 31, 2024 , the Company earned net income of$3.64 million , or$0.02 per common share, including operating income of$2.02 million . -
Robust Balance Sheet with Over
$220 million of Liquidity and No Debt: As ofMarch 31, 2024 , the Company had$222.54 million of working capital including$54.78 million of cash and cash equivalents,$140.80 million of marketable securities (uranium stocks and interest-bearing securities),$28.25 million of inventory, and no debt. -
Over
$20 Million of Additional Liquidity from Market Value of Inventory: At current commodity prices, the Company's product inventory has a market value of approximately$40.82 million , while the balance sheet reflects product inventory carried at cost of$19.96 million . -
Uranium Drives Revenue: The Company sold 300,000 pounds of uranium concentrates ("U3O8") at a weighted average price of
$84.38 per pound for$25.31 million , which resulted in a gross profit of$14.26 million and an average gross margin of 56%. -
SX "Phase 1" REE Separation Circuit Development Completed: The Phase 1 modification and enhancements to the existing solvent extraction ("SX") circuit at the
Company's White Mesa Mill (the "Mill") were completed in Q1-2024, and the Mill expects to complete commissioning of the new circuit in Q2-2024. -
Well-Stocked to Capture Market Opportunities: As of
March 31, 2024 , the Company held 385,000 pounds of finished U3O8, 905,000 pounds of finished vanadium ("V2O5"), and 11 tonnes of finished high purity, partially separated mixed rare earth carbonate ("RE Carbonate") in inventory. The Company holds an additional 495,000 pounds of U3O8 as raw materials and work-in-progress inventory (for total finished, raw material and work-in-progress inventory of 880,000 pounds of U3O8), along with an estimated 1 - 3 million pounds of solubilized V2O5 in tailings solutions that could be recovered in the future. Additionally, atMarch 31, 2024 the Company had 480 tonnes of REE raw materials (monazite concentrate) in inventory.
- During the three months ended
March 31, 2024 , the Company sold 300,000 pounds of U3O8 for$25.31 million or a realized sales price of$84.38 per pound. These sales resulted in a gross profit of$14.26 million ($47.54 per pound of U3O8), or a 56% gross margin. - The Company recently renewed an alternate feed agreement with one of our key customers, providing the Company with an estimated long-term, multi-year, low-cost source of 11,000 to 30,000 pounds of U3O8 per year.
- During the three months ended
March 31, 2024 , the Company continued uranium ore production at itsPinyon Plain (Arizona ),La Sal (Utah ) and Pandora (Utah ) mines. - Once production is fully ramped up at these mines, which is expected by mid- to late-2024, the Company expects to be mining at a run-rate of 1.1 to 1.4 million pounds of newly mined U3O8 per year.
- During 2024, the Company expects to produce approximately 150,000 to 500,000 pounds of finished U3O8 from newly mined conventional ore, stockpiled ore, and recycled alternate feed materials, depending on the timing of the ramp up of production at the Company's
Pinyon Plain ,La Sal and Pandora mines, and Mill schedule, while increasing to higher levels of production in 2025 and beyond. - The Company expects to offer to buy uranium and uranium/vanadium ore from third-party miners in the vicinity of the Mill during 2024, which has the potential to contribute to the Company's production profile.
- On
April 30 , the U.S.Senate approved by unanimous consent the Prohibiting Russian Uranium Imports Act, which bans the import of Russian uranium products into theU.S. Under the ban, which commences 90 days after enactment and terminates in 2040, all imports of uranium products fromRussia will be banned, subject to waivers in the event "no alternative viable source of low-enriched uranium is available to sustain the continued operation of a nuclear reactor orU.S. nuclear energy company." The Company expects PresidentJoe Biden to sign the bill into law in the coming days. - In anticipation of continued strength in uranium markets, the Company is preparing two additional mines in
Colorado andWyoming (Whirlwind andNichols Ranch ) for expected production in 2025. If market conditions remain strong, the Whirlwind andNichols Ranch mines could potentially increaseEnergy Fuels' uranium production to a run-rate of over two million pounds of U3O8 per year as early as 2025. - The Company is advancing permitting and other pre-development activities on its large-scale Roca Honda,
Sheep Mountain and Bullfrog uranium properties for additional uranium production in the future, which could expand the Company's uranium production to a run-rate of up to five million pounds of U3O8 per year in the coming years. - The Company continues to evaluate uranium resource and development acquisition and other potentially accretive opportunities as they may arise.
- As of
May 1 , the spot price of U3O8 was$92.00 per pound and the long-term price of U3O8, which is the price most relevant for long-term uranium sales contracts, was$80.00 per pound, according to data fromTradeTech .
- The Mill's REE production is complementary to its uranium production and does not diminish the Mill's uranium capacity or production profile in any way.
- The development of the "Phase 1" REE Separation circuit at the Mill was completed on-schedule at the end of Q1-2024, at a cost that is expected to be
$7 million to$9 million below the$25 million budget. - During Q2-2024, the Company expects to produce about 25 – 35 tonnes of separated neodymium praseodymium ("NdPr") oxide and 10 to 20 tonnes of a "heavy" samarium plus ("SM+") mixed rare earth carbonate as it commissions the Phase 1 REE Separation circuit, after which time the Company expects to begin processing uranium ore and alternate feed materials for the large-scale production of uranium at the Mill for the remainder of the year and through mid-2026.
- The Mill's Phase 1 REE separation circuit is expected to have the capacity to produce approximately 800 to 1,000 tonnes of separated NdPr oxide per year. For reference, 1,000 tonnes of NdPr can be used in enough permanent REE magnets to power up to 1 million electric vehicles ("EVs") per year. Subject to securing sufficient monazite feed, "Phase 1" capacity is expected to position
Energy Fuels in the coming years as one of the world's leading producers of separated NdPr outside ofChina . - Due to the significant opportunity in REEs,
Energy Fuels is engineering further enhancements at the Mill to increase NdPr oxide production capacity to approximately 4,000 tonnes – 6,000 tonnes per year by 2027 ("Phase 2"), and to add a separate crack and leach circuit to allow for the simultaneous operation of the Mill's conventional ore and REE processing circuits. The Company also intends to produce separated dysprosium ("Dy"), terbium ("Tb") and potentially other advanced REE materials in the future from monazite and potentially other REE process streams by 2028 ("Phase 3"). Phase 2 and Phase 3 are subject to permitting, financing and receipt of sufficient monazite feed. - To secure cost-effective and reliable supplies of monazite ore,
Energy Fuels is securing positions in several heavy mineral sand ("HMS") deposits around the World, which produce monazite sand as a low-cost byproduct of primary ilmenite and rutile (titanium) and zircon (zirconium) production. Monazite sands are a rich source of the 'magnetic' REEs used in EVs and a variety of clean energy and advanced technologies. - The Company has made significant progress in developing its Bahia HMS project in
Brazil (the "Bahia Project "). Based on preliminary, historical resource estimates, the Company believes theBahia Project has the potential to supply approximately 3,000 – 10,000 tonnes per year ("tpa") of monazite sand concentrate to the Mill (depending on production rates), containing approximately 1,500 – 5,000 tonnes of total rare earth oxides ("TREO") per year potentially for decades.1 During the first half of 2023, the Company completed 2,266 meters of sonic drilling to confirm and further delineate the rare earth, titanium, and zirconium mineralization. The Company is currently awaiting the results from the 2023 drilling campaign. In Q1-2024, the Company commenced further sonic drilling. Additionally, the Company completed bulk test work on a 2.5 tonne sample inMarch 2024 and is currently collecting a larger 15 tonne sample for additional process test work. The Company expects to complete aU.S. Subpart 1300 of Regulation S-K ("S-K 1300") and Canadian National Instrument 43-101 ("NI 43-101") compliant mineral resource estimate on theBahia Project during 2024. - On
April 21, 2024 , the Company announced that it had executed a definitive Scheme Implementation Deed (the "SID") with Base Resources Limited (ASX: BSE) (AIM: BSE) ("Base Resources") pursuant to whichEnergy Fuels has agreed to acquire 100% of the issued shares of Base Resources (the "Transaction") in consideration for (i) 0.0260Energy Fuels common shares (the "Share Consideration") and (ii) AUS$0.065 in cash, payable by way of a special dividend by Base Resources to its shareholders (the "Cash Consideration", and together with the Share Consideration, the "Scheme Consideration") for each Base Resources ordinary share held, for a total equity value at the time of announcement of approximately AUS$375 million. The Transaction will be effected by way of a scheme of arrangement underAustralia's Corporations Act (the "Scheme") and is subject to a number of conditions precedent, including the receipt of certain government approvals and the approval of the shareholders of Base Resources. - Base Resources owns the Toliara Mineral Sand Project in
Madagascar (the "Toliara Project "), which is a world-class, advanced-stage, low-cost, and large-scale HMS project. In addition to its stand-alone, ilmenite, rutile (titanium) and zircon (zirconium) production capability, theToliara Project also contains large quantities of monazite. According to a Definitive Feasibility Study (the "Toliara DFS2") on titanium and zirconium minerals and a Preliminary Feasibility Study (the "Toliara Monazite PFS") on monazite, theToliara Project boasts a net present value ("NPV") of$2.0 billion at a 10% discount rate, with expected monazite production of approximately 17,000 tpa in its first phase, ramping up to a maximum of 27,795 tpa in its second phase, averaging 21,800 tpa over the life of the project.2Energy Fuels believes itsU.S. -based REE separation capabilities have the potential to increase these valuations materially.The Toliara Project is subject to negotiation of fiscal terms applying to the Project with theMadagascar government and the receipt of certainMadagascar government approvals and actions, including the lifting of a suspension on development at theToliara Project pending negotiation of fiscal terms and the addition of Monazite recovery to the existing mine permit, before development may commence. - On
December 27, 2023 , the Company announced that it had entered into a non-binding Memorandum of Understanding ("MOU") withAstron Corporation Limited ("Astron") to jointly develop theDonald Project inAustralia .The Donald Project is a well-known HMS and rare earth deposit that the Company believes could provide the Mill with another near-term, low-cost, and large-scale source of monazite sand for the recovery of REE oxides along with the contained uranium.The Donald Project has most licenses and permits in place (or at an advanced stage of completion). The MOU sets out in broad terms the basis upon which the parties would enter into an Australian incorporated Venture under whichEnergy Fuels would invest up to AUS$180 million (approximately$117 million at current exchange rates) to earn up to a 49% interest in the Venture. In addition, the Company would issue to Astron common shares having a value of up to$17.5 million . Based on a Definitive Feasibility Study (the "Donald DFS"), theDonald Project has the potential to produce approximately 7,000 to 8,000 tonnes of monazite per year during its first phase, and 13,000 to 14,000 tonnes during its second phase,3 and is expected by the Company to be another low-cost source of feed for the Mill's REE production. Although the Company is currently in the process of completing due diligence and negotiating definitive agreements with Astron, there can be no assurance that the Company will enter into definitive agreements to govern the Venture, or if entered into, the terms will be as set out in the MOU, or that the transaction will be completed. - Together, the Bahia, Toliara, and Donald Projects have the potential to supply the Mill with over 50,000 tonnes of low cost monazite sand per year, assuming the
Toliara Project andDonald Project are secured and all three projects are ramped up to full expected production capacity. - On
April 24, 2024 , the Company released an AACE International ("AACE") Class 4 Pre-Feasibility Study (not a Pre-Feasibility Study subject to or intended to be compliant with NI 43-101 or S-K 1300) datedApril 22, 2024 , indicating globally competitive capital and operating costs for its planned Phase 2 expanded REE oxide production at the Mill (the "Mill PFS"). The economics detailed in the Mill PFS are for the Phase 2 expansion of REE separation capacity in one or more additional facilities at the Mill, capable of processing 30,000 tonnes per annum ("tpa") of Monazite to produce approximately 3,000 tpa of NdPr oxide. The Mill PFS shows globally competitive capital expenditures of$348 million for the 30,000 tpa Phase 2 separation facility and an average processing cost of$29.88 /kg NdPr. This analysis does not include any capital or operating costs associated with the recovery of Dy and Tb or any revenues associated with the sales of those "heavy" REE oxides. The Mill PFS can be viewed on the Company's website, www.energyfuels.com. - Upon successful completion of the Base Resources transaction,
Energy Fuels plans to update the Toliara DFS2 and the Toliara Monazite PFS and re-issue those reports in a form that complies with NI 43-101 and S-K-1300, and that also updates and incorporates the results of the Mill PFS to expand Phase 2 production capacity from a 30,000 tpa Monazite process facility capable of producing approximately 3,000 tpa of NdPr oxide to a 40,000 – 60,000 tpa Monazite process facility which would generate 4,000 – 6,000 tpa of NdPr, 150 – 225 tpa of Dy, and 50 – 75 tpa of Tb. The Phase 2 separation facility is subject to completion of engineering design and receipt of required permits and licenses.
- The Company produces high purity V2O5 from time-to-time and carries that material in inventory for sale into market strength, most recently during Q1-2023 when the Company sold approximately 79,344 pounds of V2O5 for a realized sales price of
$10.98 per pound. - The Company currently holds approximately 905,000 pounds of V2O5 in inventory.
- As of
May 1 , the spot price of V2O5 was$5.87 per pound, according to data fromFastmarkets .
- The Company continued advancing its program to evaluate the potential to recover radioisotopes from its process streams for use in emerging targeted alpha therapy ("TAT") cancer therapeutics.
- In
June 2023 , theUtah Division of Waste Management and Radiation Control issued the Company a research and development ("R&D") license for the recovery of R&D quantities of Ra-226 at the Mill. - During 2024, the Company intends to complete engineering on the R&D pilot facility for the production of Ra-226 at the Mill; to set up the first stages of the pilot facility; and to produce R&D quantities of Ra-226 at the Mill for testing by end-users of the product.
"
"During the quarter, we made profitable uranium sales into our portfolio of long-term utility contracts, and we completed two opportunistic spot sales averaging nearly
"We recently renewed a multi-year alternate feed agreement with one of our key customers, providing the Company with a long-term, low-cost source of U3O8. Finally, the ramp-up of our conventional mines in
"We continue to make extraordinary progress on rare earth elements by leveraging our uranium capabilities and permits. We completed the modifications and enhancements to the Mill's SX circuit, by adding up to 1,000 tonnes of NdPr separation capabilities through the development of our Phase 1 REE separation circuit. This means
"Once the NdPr run is complete, we will shift our focus to processing alternate feed materials and conventional ore for uranium recovery later in 2024, through mid- 2026. By 2026 or 2027, we expect to have significant quantities of monazite from our newly secured mineral sand projects. We also plan to have a dedicated monazite crack-and-leach facility completed or under construction by that time. We are carefully calibrating Mill and mine schedules to accommodate both uranium and rare earths production, without diminishing the capacity for either, in a clear optimization and diversification strategy.
"We are also making spectacular progress toward securing, large-scale, low-cost sources of monazite that the Mill can process into rare earth oxides in the future. Early on, it became very apparent that to become a low-cost, world-scale rare earth oxide producer, we needed to secure our own supply chains for monazite to better control our costs and production schedules. Monazite sand from HMS projects is clearly one of the best, lowest cost source of rare earths, due to excellent natural distributions of both the 'light' and 'heavy' rare earths needed for magnets, high total and 'magnet' rare earth grades, and the fact that it is produced as a low-cost byproduct of primary titanium and zirconium mineral production.
"We acquired the
"Importantly, upon the successful completion of the Base Resources acquisition,
"We also released the results of the Mill PFS demonstrating that the Mill is expected to have low capital and operating costs that we believe are among the lowest in the World. Now that we are securing our supply chains and demonstrating our commercial viability and competitiveness, we are in the process of advancing discussions with commercial customers on sales opportunities, and the
"Another key benefit of our HMS project acquisitions that cannot be overlooked, is diversification into the HMS market, which is independent of the uranium and REE markets.
"At
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Selected Summary Financial Information:
|
Three Months Ended |
||
(In thousands, except per share data) |
2024 |
|
2023 |
Results of Operations: |
|
|
|
Uranium concentrates revenues |
$ 25,314 |
|
$ 18,470 |
Vanadium concentrates revenues |
— |
|
871 |
Total revenues |
25,426 |
|
19,613 |
Gross profit |
14,374 |
|
11,347 |
Operating income (loss) |
2,021 |
|
(405) |
Net income attributable to the company |
3,638 |
|
114,264 |
Basic net income per common share |
0.02 |
|
0.72 |
Diluted net income per common share |
0.02 |
|
0.72 |
(In thousands) |
|
|
|
|
Percent Change |
Financial Position: |
|
|
|
|
|
Working capital |
$ 222,543 |
|
$ 222,335 |
|
— % |
Current assets |
228,069 |
|
232,695 |
|
(2) % |
Mineral properties |
122,406 |
|
119,581 |
|
2 % |
Property, plant and equipment, net |
29,799 |
|
26,123 |
|
14 % |
Total assets |
405,787 |
|
401,939 |
|
1 % |
Current liabilities |
5,526 |
|
10,360 |
|
(47) % |
Total liabilities |
18,097 |
|
22,734 |
|
(20) % |
THE TECHNICAL INFORMATION IN THIS PRESS RELEASE RELATING TO THE TOLIARA PROJECT AND DONALD PROJECT HAS BEEN PREPARED IN ACCORDANCE WITH JORC STANDARDS, AND THE TECHNICAL INFORMATION RELATING TO THE
Cautionary Note Regarding Forward-Looking Statements:
This news release contains certain "Forward Looking Information" and "Forward Looking Statements" within the meaning of applicable
1
This estimated production capability is based on the Company's preliminary calculations using the grades and quantities estimated in 16 different Exploration Reports prepared by the previous owner and filed with the Brazilian Government's |
2
The financial and production information relating to the |
3
The information relating to the |
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