Energy Fuels Announces Q1-2019 Results
Energy Fuels Announces Q1-2019 Results
LAKEWOOD, CO
,
May 8, 2019
/CNW/ -
Energy Fuels Inc. (NYSE American: UUUU; TSX: EFR)
("Energy Fuels" or the "Company")
today reported its financial results for the quarter ended
March 31, 2019
. The Company's quarterly report on Form 10-Q has been filed with the U.S.
Securities and Exchange Commission ("
SEC
") and may be viewed on the Electronic Document
Gathering and Retrieval System ("
EDGAR
") at
www.sec.gov/edgar.shtml
, on the System for
Electronic Document Analysis and Retrieval ("
SEDAR
") at
www.sedar.com
, and on the Company's
website at
www.energyfuels.com
. Unless noted otherwise, all dollar amounts are in U.S. dollars.
Highlights:
At
March 31, 2019
, the Company had
$47.3 million
of working capital, including
$15.3 million
in
cash,
$17.5 million
in marketable securities, 470,000 pounds of finished uranium goods
inventory, and 270,000 pounds of finished vanadium goods inventory.
The Company successfully achieved commercial rates of vanadium production at the Company's
White Mesa Mill (the "
Mill
"), producing the highest purity vanadium in the Mill's history.
Vanadium production totaled 325,000 pounds of V
2
O
5
for the quarter, and the Company
expects to continue to produce 160,000 to 200,000 pounds of V
2
O
5
per month over a 16-20
month period, subject to continued successful recovery and suitable sales prices.
Uranium production totaled 20,000 pounds of U
3
O
8
during the quarter.
The Company completed no uranium sales during the quarter and continues to add to uranium
inventories. The Company believes that uranium prices will improve and that it may be able to
sell inventory at higher prices in the future.
The Company completed 53,000 pounds of vanadium sales into the steel industry during the
quarter, following conversion of the Company's V
2
O
5
product into ferrovanadium. The Company
is continuing to convert V
2
O
5
into ferrovanadium, while also evaluating the sale of certain
quantities of high-purity V
2
O
5
into specialty aerospace, chemical, and potentially the vanadium
battery industries.
The Company continued a limited conventional vanadium test-mining program at its La Sal
Complex. As of
March 31, 2019
, the Company had mined approximately 6,000 tons of
mineralized material with an average grade of 1.44% V
2
O
5
and 0.17% U
3
O
8
. While these
numbers are not intended to represent the basis of a new resource estimate, the Company
believes that the new mining methods that were tested are likely to result in reduced costs,
higher grades, and higher value for mined material due to significantly improved grade control at
the mine site. The Company completed test mining in
April 2019
and plans to continue further
operational readiness activities at the La Sal Complex based on these encouraging results.
Pursuant to Section 232 of the Trade Expansion Act of 1962 (as amended), on
April 14, 2019
,
the U.S. Department of Commerce ("
DOC
") completed its investigation into the effects of
uranium imports on U.S. national security (the "
Section 232 Investigation
") and submitted a
report to the President of
the United States
containing their findings and proposed remedy (if
any). The Company is seeking a remedy which would set a quota limiting imports of uranium
into the U.S., effectively reserving 25% of the U.S. nuclear market for U.S. uranium production.
If granted, the quota would be expected to strengthen uranium prices available to U.S.
producers, thereby reviving an industry crucial to America's national security and the generation
of clean, carbon-free nuclear energy.
Mark S. Chalmers
, Energy Fuels' President and CEO stated:
"Energy Fuels continued to make important progress on a number of value-building initiatives in the
first quarter of this year.
"Some of our most noteworthy achievements have resulted from our continued support of the U.S.
Department of Commerce's Section 232 investigation into U.S. uranium imports. On
April 14, 2019
,
our efforts resulted in an important milestone. On that date, the DOC submitted a report to the
White House containing the results of its investigation, along with proposed recommendations.
President Trump now has up to 90 days from
April 14, 2019
to decide whether and how to act on
DOC's recommendations. As the report has not been made public, the Company has not seen the
report. However, we believe the facts are crystal clear. Increasing levels of uranium and nuclear fuel
imports into the U.S. from our geopolitical rivals represent a real threat to U.S. national security and
energy security. We are proud to be one of the voices urging the President to act decisively to
protect America on this key issue, and we will continue to support this initiative in the months ahead.
"While we await the President's decision on the Section 232 investigation, one of our other key
initiatives involves vanadium production, where we have made enormous strides to re-establish the
Company as the only primary producer of vanadium in
North America
. In 2018, when vanadium
prices began to rise over the
$10
per pound threshold, we began evaluating the short-term recovery
of dissolved vanadium from the pond solutions at our White Mesa Mill, a source of solubilized
vanadium inventory we had never previously attempted to recover. Through the innovation, hard
work, and dedication of our skilled milling professionals, we entered production toward the end of
2018 and began making sales in
February 2019
. We are actively producing significant quantities of
the highest-purity vanadium in the Mill's history. Perhaps more importantly, since we have developed
an effective processing methodology, we now have the ability to quickly and inexpensively adjust
production in response to evolving market conditions. We are closely tracking market conditions,
particularly in
China
where significant quantities of vanadium are produced and consumed. Prices
currently sit at approximately
$9.10
per pound and, if they remain at current levels or decline for any
extended period of time, we may temporarily halt vanadium production in order to save this valuable
inventory for higher future prices. Regardless of what happens to markets, we have created the
potential to rapidly generate significant cash flows during periods of elevated vanadium prices.
"We also believe we have created significant shareholder value through the test-mining program at
our La Sal Complex. As we have previously reported, under this program we analyzed mining
methods and technologies never before utilized in the uranium/vanadium mines of the Colorado
Plateau. Our results are extremely encouraging, potentially changing the paradigm for mining these
deposits by significantly improving grade control. If successful, this would reduce mining, milling and
trucking costs, and potentially improve Mill recovery for vanadium since the higher the vanadium
grade fed into the Mill, the higher the percentage of vanadium recovered.
"In short, we believe we are clearly demonstrating that Energy Fuels is not just another uranium
company waiting for prices to recover. We are committed to realizing value and leveraging our
assets wherever we can. We look forward to providing further updates on our progress in the
months ahead."
Selected Summary Financial Information:
$000, except per share data
Three months ended
March 31, 2019
Three months ended
March 31, 2018
Results of Operations:
Total revenues
$
1,670
$
1,254
Operating loss
(10,122)
(10,400)
Net loss attributable to the company
(12,127)
(10,822)
Basic and diluted loss per share
(0.13)
(0.14)
$000's
As at
March 31, 2019
As at
December 31, 2018
Financial Position:
Working capital
$
47,256
$
52,000
Property, plant and equipment
29,017
29,843
Mineral properties
83,539
83,539
Total assets
190,341
196,766
Total long-term liabilities
47,306
43,059
Outlook
Overview
Operations and Sales Outlook Overview
The Company plans to extract and/or recover uranium from its Nichols Ranch Project in 2019. In
addition, during 2019 the Company expects to extract and/or recover vanadium, and potentially
uranium, from pond solutions at its White Mesa Mill, subject to continued successful recovery and
suitable sales prices.
As a result of improved vanadium market conditions in 2018, the Company began its current
campaign in early 2019 to recover between two and a half (2.5) and four (4) million pounds of
vanadium from existing pond solutions at the White Mesa Mill, which result from past mineral
processing campaigns, over the 16 to 20 month expected life of the program.
Extraction and Recovery Activities Overview
During the quarter ended
March 31, 2019
, the Company recovered approximately 20,000 pounds of
U
3
O
8
. In the year ending
December 31, 2019
, the Company expects to recover approximately
50,000 to 125,000 pounds of U
3
O
8
. The Company also recovered 325,000 pounds of high-purity
vanadium pentoxide ("
V
2
O
5
" or "
black flake
"), during the quarter ended
March 31, 2019
, and
expects to continue to recover approximately 160,000-200,000 pounds of V
2
O
5
per month over the
life of the program, subject to continued successful recovery and depending on the availability of
suitable sales prices.
The Company has entered into no uranium sales commitments for 2019 thus far. Therefore, all 2019
uranium production is expected to be added to existing inventories. All V
2
O
5
production is expected
to be sold on the spot market or maintained in inventory.
Both ISR and conventional uranium extraction and/or recovery are expected to continue to be
maintained at reduced levels until such time as improvements in uranium market conditions are
observed or suitable sales contracts can be procured. Continued vanadium production will depend
on the continued availability of suitable vanadium spot prices.
ISR Activities
During the quarter ended
March 31, 2019
, we extracted and recovered approximately 20,000
pounds of U
3
O
8
from the Nichols Ranch Project. In the year ending
December 31, 2019
, the
Company expects to produce approximately 50,000-70,000 pounds of U
3
O
8
from Nichols Ranch.
At
March 31, 2019
, the Nichols Ranch wellfields had nine header houses extracting uranium. Until
such time as improvement in uranium market conditions is observed or suitable sales contracts can
be procured, the Company intends to defer development of further header houses at its Nichols
Ranch Project. The Company currently holds 34 fully-permitted, undeveloped wellfields at Nichols
Ranch, including four additional wellfields at the Nichols Ranch wellfields, 22 wellfields at the
adjacent Jane Dough wellfields, and eight wellfields at the Hank Project, which is fully permitted to
be constructed as a satellite facility to the Nichols Ranch Plant.
The Company expects to continue to keep the Alta Mesa ISR Project on standby until such time as
improvements in uranium market conditions are observed or suitable sales contracts can be
procured.
Conventional Activities
Conventional Extraction and Recovery Activities
During the quarter ended
March 31, 2019
, the White Mesa Mill recovered no uranium due to the its
focus on vanadium recovery.
During the quarter, the Company produced 325,000 pounds of high-purity V
2
O
5
from its Mill pond
return program. The Company is currently producing at full-production rates of 160,000 to 200,000
pounds of V
2
O
5
per month. The Company expects to continue to recover V
2
O
5
at these rates
throughout 2019, subject to continued successful recovery and depending on the availability of
suitable sales prices. If vanadium prices remain at current levels or decline, the Company may curtail
or stop vanadium production during the year, pending improvements in vanadium prices. One of the
benefits of the Mill's vanadium pond return program is that it can be stopped and restarted relatively
quickly in response to changes in vanadium market conditions.
In addition, the Company is evaluating whether uranium can be extracted, concurrent with its
vanadium recovery, from the pond solutions. If the Company determines such recovery is possible, it
expects that up to approximately 55,000 pounds of U
3
O
8
could potentially be recovered at the White
Mesa Mill in 2019 from those activities.
The Company currently expects that planned vanadium and other processing activities will keep the
Mill in operation through the end of 2019 and into 2020. The Company is also actively pursuing
opportunities to process new and additional alternate feed sources and low-grade ore from third
parties in connection with various uranium clean-up requirements. In addition, if improvements in
uranium market conditions are observed as a result of the Section 232 Investigation or otherwise,
the Company would expect to be able to procure suitable long-term sales contracts to keep the Mill
operating over a considerably longer period of time.
Conventional Standby, Permitting and Evaluation Activities
During the quarter ended
March 31, 2019
, the Company continued its test-mining program targeting
vanadium at the fully-permitted La Sal Complex located on the Colorado Plateau, which it completed
in
April 2019
, in addition to pursuing enhanced operational readiness targeting future commercial
production. The goal of the program was to evaluate different mining approaches that selectively
target high-grade vanadium zones, thereby potentially increasing productivity and mined grades for
vanadium and decreasing mining costs per pound of V
2
O
5
and U
3
O
8
. During this program, the
Company refurbished the La Sal and Pandora mines within the La Sal Complex and extracted
approximately 6,000 tons of mineralized material. The Company expects to continue readiness
activities throughout 2019. In addition, the Company expects to complete a surface and underground
drilling program at the La Sal Complex by mid-2019 in order to potentially expand the known uranium
and/or vanadium resources available to mine.
Sales
During the quarter ended
March 31, 2019
, the Company completed no uranium sales. The Company
currently has no remaining contracts and is therefore fully unhedged to future uranium price
increases.
The Company continued V
2
O
5
shipments during the quarter ended
March 31, 2019
with initial
quantities being allocated for conversion to ferrovanadium ("
FeV
"), which is currently being sold into
spot metallurgical markets. During the quarter, the Company completed sales of 53,000 pounds of
vanadium at an average price of
$20.40
per pound. The Company expects to continue to sell
finished vanadium product as it is produced into the metallurgical industry, as well as other markets
that demand a higher purity product, including the aerospace, chemical and potentially the vanadium
battery industries. The Company expects to sell to a diverse group of customers in order to
maximize revenues and profits. The Company is continuing to produce a high-purity vanadium
product of 99.6%-99.7% V
2
O
5
. The Company believes there may be opportunities to sell certain
quantities of this high-purity material at a premium to reported spot prices. The Company may also
retain vanadium product in inventory for future sale, depending on vanadium spot prices at the time
of production.
The Company also continues to pursue new sources of revenue, including additional alternate feed
materials and other sources of feed, for the White Mesa Mill.
Trade Petition
In
January 2018
, the Company participated in the joint filing of a Petition for Relief under Section 232
of the Trade Expansion Act of 1962 (as amended) from Imports of Uranium Products that Threaten
National Security (the "
Petition
"). On
April 14, 2019
, the DOC completed the Section 232
Investigation and submitted a report to the President of
the United States
containing their findings
and proposed remedy (if any). From
April 14, 2019
, the President has 90 days to act on the DOC's
recommendations and, if necessary, take action to adjust imports or pursue other lawful, non-trade-
related actions to address the national security threat. The Petition describes how uranium and
nuclear fuel from state-owned and state-subsidized enterprises in
Russia
,
Kazakhstan
,
Uzbekistan
,
and
China
potentially represent a threat to U.S. national security. The Petition seeks a remedy which
would set a quota to limit imports of uranium into the U.S., effectively reserving 25% of the U.S.
nuclear market for U.S. uranium production. Additionally, the Petition suggests implementation of a
requirement for U.S. federal utilities and agencies to buy U.S. uranium in accordance with the
President's Buy American Policy. The remedies, if granted, would be expected to strengthen the
U.S. uranium mining industry, bolster national defense, and improve supply diversification for U.S.
utilities and their customers. The Company intends to continue its support of this action during 2019.
It should be noted, however, that there can be no certainty of the outcome of the Section 232
Investigation and, therefore, the outcome of this process is uncertain.
About Energy Fuels
: Energy Fuels is a leading
U.S.-
based uranium mining company, supplying
U
3
O
8
to major nuclear utilities. The Company also produces vanadium from certain of its projects,
as market conditions warrant. Its corporate offices are in
Lakewood, Colorado
near
Denver
, and all
of its assets and employees are in
the United States
. Energy Fuels holds three of America's key
uranium production centers: the White Mesa Mill in
Utah
, the Nichols Ranch in-situ recovery
("ISR") Project in
Wyoming
, and the Alta Mesa ISR Project in
Texas
. The White Mesa Mill is the
only conventional uranium mill operating in the U.S. today, has a licensed capacity of over 8
million pounds of U
3
O
8
per year, and has the ability to produce vanadium when market conditions
warrant. The Nichols Ranch ISR Project is in operation and has a licensed capacity of 2 million
pounds of U
3
O
8
per year. The Alta Mesa ISR Project is currently on standby. In addition to the
above production facilities, Energy Fuels also has one of the largest NI 43-101 compliant uranium
resource portfolios in the U.S. and several uranium and uranium/vanadium mining projects on
standby and in various stages of permitting and development. The primary trading market for
Energy Fuels' common shares is the NYSE American under the trading symbol "UUUU," and the
Company's common shares are also listed on the Toronto Stock Exchange under the trading
symbol "EFR." Energy Fuels' website is
www.energyfuels.com
.
Cautionary Note Regarding Forward-Looking Statements:
This news release contains certain
"Forward Looking Information" and "Forward Looking Statements" within the meaning of applicable
Canadian and
United States
securities legislation, which may include, but is not limited to,
statements with respect to: production and sales forecasts; costs of production; scalability, and the
Company's ability and readiness to re-start or expand any of its existing projects to respond to any
improvements in uranium market conditions; any expectations regarding vanadium opportunities,
the Company's program for the recovery of vanadium from pond solutions, or the Company's
ability to sell any of its vanadium product at a premium to spot prices or otherwise; the ability to
quickly and inexpensively adjust vanadium production in response to evolving market conditions;
the ability to generate cash flows during periods of elevated vanadium prices; the expected results
from the vanadium test-mining program; the ability of the Company to secure any new sources of
alternate feed materials or other processing opportunities at the White Mesa Mill; expected
timelines for the permitting and development of projects; the Company's expectations as to longer
term fundamentals in the market and price projections; expectations to become or maintain its
position as a leading uranium company in
the United States
; any threats to national security and
energy security; and
the outcome of the Department of Commerce Section 232 investigation,
including the nature of the Secretary of Commerce's recommendation to the President of
the
United States
; whether or not the President will act on the recommendation and, if so, the nature of
the action and remedy; and the expected benefits of the proposed remedies
. Generally, these
forward-looking statements can be identified by the use of forward-looking terminology such as
"plans," "expects," "does not expect," "is expected," "is likely," "budgets," "scheduled," "estimates,"
"forecasts," "intends," "anticipates," "does not anticipate," or "believes," or variations of such words
and phrases, or state that certain actions, events or results "may," "could," "would," "might" or "will
be taken," "occur," "be achieved" or "have the potential to." All statements, other than statements of
historical fact, herein are considered to be forward-looking statements. Forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company to be materially different from any future
results, performance or achievements express or implied by the forward-looking statements.
Factors that could cause actual results to differ materially from those anticipated in these forward-
looking statements include risks associated with: production and sales forecasts; costs of
production; scalability, and the Company's ability and readiness to re-start or expand any of its
existing projects to respond to any improvements in uranium market conditions; any expectations
regarding vanadium opportunities, the Company's program for the recovery of vanadium from
pond solutions, or the Company's ability to sell any of its vanadium product at a premium to spot
prices or otherwise; the ability to quickly and inexpensively adjust vanadium production in
response to evolving market conditions; the ability to generate cash flows during periods of
elevated vanadium prices; the expected results from the vanadium test-mining program; the ability
of the Company to secure any new sources of alternate feed materials or other processing
opportunities at the White Mesa Mill; expected timelines for the permitting and development of
projects; the Company's expectations as to longer term fundamentals in the market and price
projections; expectations to become or maintain its position as a leading uranium company in
the
United States
; any threats to national security and energy security; and
the outcome of the
Department of Commerce Section 232 investigation, including the nature of the Secretary of
Commerce's recommendation to the President of
the United States
; whether or not the President
will act on the recommendation and, if so, the nature of the action and remedy; the expected
benefits of the proposed remedies;
and the other factors described under the caption "Risk
Factors" in the Company's most recently filed Annual Report on Form 10-K, which is available for
review on EDGAR at
www.sec.gov/edgar.shtml
, on SEDAR at
www.sedar.com
, and on the
Company's website at
www.energyfuels.com
. Forward-looking statements contained herein are
made as of the date of this news release, and the Company disclaims, other than as required by
law, any obligation to update any forward-looking statements whether as a result of new
information, results, future events, circumstances, or if management's estimates or opinions
should change, or otherwise. There can be no assurance that forward-looking statements will
prove to be accurate, as actual results and future events could differ materially from those
anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on
forward-looking statements. The Company assumes no obligation to update the information in this
communication, except as otherwise required by law.
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For further information:
Investor Inquiries: Energy Fuels Inc., Curtis Moore, VP - Marketing and
Corporate Development, (303) 974-2140 or Toll free: (888) 864-2125,
[email protected], www.energyfuels.com
CO: Energy Fuels Inc.
CNW 06:00e 08-MAY-19