Energy Fuels Announces Q1-2020 Results
Energy Fuels Announces Q1-2020 Results
LAKEWOOD, CO
, May 1, 2020 /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, 2020
. 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, 2020
, the Company had
$26.0 million
in cash and marketable securities plus
$22.4
million
of concentrate inventory, including 520,000 pounds of uranium valued on our balance
sheet at
$23.13
per pound and 1,675,000 pounds of vanadium valued on our balance sheet at
$5.37
per pound, both in the form of immediately marketable product. As of
May 1, 2020
, the
spot price of uranium was
$33.75
per pound and the mid-point spot price of vanadium was
$6.88
per pound, which places a current market value on our concentrate inventories of
approximately
$29.1 million
.
On
February 20, 2020
, the Company strengthened its balance sheet by completing a bought-
deal financing for net proceeds of
$15.1 million
and raised approximately
$4.0 million
on the
Company's At the Market ("
ATM
") program in the first quarter of 2020.
Uranium production totaled approximately 5,900 pounds of U
3
O
8
for the quarter, as the
Company wound down operations from existing wellfields at its Nichols Ranch project.
The Company suspended vanadium production at the end of 2019 and has substantial quantities
of dissolved vanadium remaining in the Company's tailings management system for future
recovery as market conditions warrant.
No material uranium or vanadium sales were completed during the quarter, and the Company is
strategically maintaining its uranium inventory for future sales in anticipation of higher uranium
prices, potentially as a result of the creation of a new U.S. uranium reserve (as discussed
below) or other U.S. government support, or due to generally improved uranium market
fundamentals.
The Company had an operating loss of
$7.8 million
during Q1-2020.
On
February 10, 2020
, the President announced a proposed FY-2021 budget (the "
President's
Budget
"), which includes a request for
$150 million
per year for the next 10 years to create a
U.S. uranium reserve. The Company views this news as being very positive for established U.S.
uranium producers such as Energy Fuels.
On
April 23, 2020
, the U.S. Nuclear Fuel Working Group ("
NFWG
") released its "Strategy to
Restore American Nuclear Energy Leadership" (the "
Report
"). In the report, the U.S.
government commits to reviving and strengthening the U.S. uranium mining industry. The Report
provides a number of policy recommendations, including direct government purchases,
supporting Department of Commerce efforts to extend the Russian Suspension Agreement
("
RSA
") to prevent dumping of Russian uranium in the U.S. (and "the consideration of further
lowering the cap on Russian imports under future RSA terms"), enabling the U.S. Nuclear
Regulatory Commission to deny imports of fabricated nuclear fuel from
Russia
; and streamlining
regulatory reform and land access for uranium.
On
April 13, 2020
, the Company announced its entry into the U.S. rare earth elements ("
REE
")
market. The Company believes its fully licensed and constructed White Mesa Mill ("
Mill
"), which
is the only uranium mill operating in the U.S. today, can play a key role in bringing the REE
supply chain back to the U.S. Many REE ores (and other streams) contain recoverable
quantities of uranium and thorium, and the Mill has a 40-year history of responsibly processing
ores for uranium and other metals.
Mark S. Chalmers
, Energy Fuels' President and CEO, stated:
"Energy Fuels continued to be the clear leader in the U.S. uranium space during Q1-2020. We
received excellent news from the U.S. government in February when President Trump published his
Budget for fiscal year 2021, which seeks appropriations totaling
$1.5 billion
over the next 10 years
to create a new strategic U.S. uranium reserve. Then, on
April 23, 2020
, the long-awaited report of
the Nuclear Fuel Working Group was released, which demonstrated the U.S. government's strong
commitment to restoring U.S. nuclear energy leadership and reviving and strengthening the U.S.
uranium mining industry. Energy Fuels has taken the leading role in obtaining the U.S. government's
support for U.S. uranium miners, spending more time and money on this initiative than any other U.S.
uranium miner. And, this makes sense, since we have been the largest U.S. uranium producer since
2017, our assets have produced 34% of all U.S. uranium since 2006, and we have more proven
facilities, more permitted resources, and more production capacity than any other U.S. miner. We
believe that Energy Fuels should be a major beneficiary of any U.S. government support for the
industry. We look forward to working with the U.S. government to ensure their initiatives to support
domestic uranium production are successful and taxpayer dollars are spent wisely.
"If you have followed Energy Fuels' story for any length of time, you also know that we are
entrepreneurial, and we are always seeking to leverage our assets and expertise toward other
business opportunities related to our core uranium business, including vanadium production, alternate
feed materials processing, and land cleanup work. We recently announced our proposed entry into
the rare earth elements market, and we believe our White Mesa Mill, the only conventional uranium
mill operating in the U.S. today, can potentially be used to process certain REE ores and other
streams. Over the past year, we have been approached by a number of REE companies and the
U.S. government, inquiring about the capabilities of the White Mesa Mill. Many REE ore streams
contain recoverable quantities of uranium, and, from health, safety, and environmental protection
standpoints, they are very similar to the uranium ore streams the Mill has handled responsibly over
the past 40 years. In addition, one of the main bottlenecks in U.S. REE production is the availability
of a processing facility capable of handling the uranium and thorium, since permitting and
constructing a new facility can take many years, be victim to major activist opposition, and cost
hundreds of millions of dollars. Because the Mill is already licensed and constructed, many of these
hurdles have already been cleared. We believe the White Mesa Mill may be an ideal location to
process rare earth elements, and are engaging certain consultants, including ANSTO, to help us
evaluate the opportunity. Most importantly, if any company has REE ores or other streams they wish
to process, Energy Fuels is 'open for business.'
"Another major way Energy Fuels is differentiated from our peers is in the strength of our balance
sheet. We ended Q1-2020 with over
$48.4 million
of cash, marketable securities, and uranium and
vanadium inventories. It should be further noted that both uranium and vanadium prices have
improved significantly since the end of the quarter, thereby further increasing the value of our
inventories. At the end of 2020, we anticipate having nearly 700,000 pounds of uranium in inventory,
which we hope to be able to sell to the U.S. government, or into otherwise improving uranium
markets, at prices much higher than those we see today. No other U.S. uranium miner has Energy
Fuels' balance sheet or the leverage to improving prices of our inventories."
Selected Summary Financial Information:
$000, except per share data
Three months
ended
March 31, 2020
Three months
ended
March 31, 2019
Results of Operations:
Total revenues
$
393
$
1,670
Gross profit (loss)
(685)
(422)
Net income (loss) attributable to the company
(5,657)
(12,127)
Basic and diluted loss per share
(0.05)
(0.13)
$000's
As at March 31,
2020
As at December 31,
2019
Financial Position:
Working capital
$
35,009
$
20,534
Property, plant and equipment
25,395
26,203
Mineral properties
83,539
83,539
Total assets
184,928
175,720
Total long-term liabilities
21,561
22,475
Outlook
Overview
Operations and Sales Outlook Overview
In response to the President's FY-2021 Budget request and/or implementation of policy
recommendations contained in the U.S. Nuclear Fuel Working Group ("NFWG") report, the Company
is evaluating activities aimed towards increasing uranium production at all or some of its production
facilities, including the currently operating White Mesa Mill, the recently operating Nichols Ranch ISR
Facility, and the Alta Mesa ISR Facility, La Sal Complex and Canyon Mine, which are all currently on
standby, as market conditions may warrant. The Company may commence such activities prior to
confirmation of Congressional appropriations or the definition of all implementation details, as market
conditions may warrant, recognizing that there can be no guarantee that the required appropriations
will be forthcoming or that the implementation details will be satisfactory, and that the outcome of
this process is therefore uncertain. Alternatively, the Company may defer commencing any such
activities until further clarification on implementation of the President's Budget is published and/or
Congressional appropriations are obtained, or market conditions otherwise warrant. No decisions on
any project-specific actions to be taken in response to the President's Budget have been made at
this time.
Subject to any actions the Company may take in response to the President's Budget, the Company
plans to extract and/or recover limited amounts of uranium from its Nichols Ranch Project in 2020,
which was placed on standby in the first quarter of 2020. In addition, during 2020 the Company
expects to recover uranium at the White Mesa Mill from in-circuit uranium inventories extracted from
the recent vanadium Pond Return campaign, and from Alternate Feed Materials. The vanadium Pond
Return campaign conducted in 2019 was brought to a close in early 2020.
Subject to any actions the Company may take in response to the President's Budget or improving
market conditions, both ISR and conventional uranium recovery is expected to be maintained at
reduced levels, as a result of current uranium market conditions.
The Company is also seeking new sources of revenue, including new sources of Alternate Feed
Materials and new fee processing opportunities at the White Mesa Mill that can be processed under
existing market conditions (i.e., without reliance on current uranium sales prices), and is evaluating
opportunities to potentially recover REEs at the White Mesa Mill. The Company will also continue its
support of U.S. governmental activities to support the U.S. uranium mining industry and will evaluate
additional acquisition and disposition opportunities that may arise.
Extraction and Recovery Activities Overview
During the three months ended
March 31, 2020
, the Company recovered approximately 5,900
pounds of U
3
O
8
, all of which were for the account of the Company. In the year ending December 31,
2020, the Company expects to recover a quantity of uranium within its previously published guidance
of 125,000 to 175,000 pounds of U
3
O
8
. The Company also recovered approximately 67,000 pounds
of high-purity vanadium pentoxide ("V
2
O
5
" or "black flake") during the three months ended
March 31,
2020
from its vanadium Pond Return campaign, which was suspended during the quarter.
The Company has strategically opted not to enter into any uranium sales commitments for 2020.
Therefore, subject to any actions the Company may take in response to the President's Budget and
general market conditions, all 2020 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 if prices rise significantly
above current levels, but otherwise maintained in inventory.
ISR Activities
During the three months ended
March 31, 2020
, we extracted and recovered approximately 5,900
pounds of U
3
O
8
from the Nichols Ranch Project, which was placed on standby during the quarter.
As of March 31, 2020, the Nichols Ranch wellfields had nine header houses that had extracted
uranium, which are now depleted. Subject to any actions the Company may take in response to the
President's Budget, until such time as improvement in uranium market conditions is observed or
suitable sales contracts can be procured, the Company expects 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.
Subject to any actions the Company may take in response to the President's Budget, the Company
expects to continue to keep the Alta Mesa 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 three months ended
March 31, 2020
, the Company produced approximately 67,000
pounds of high-purity V
2
O
5
from its Mill Pond Return program and no uranium. During 2020, the
Company expects to recover approximately 120,000 to 170,000 pounds of U
3
O
8
at the White Mesa
Mill from in-circuit uranium inventories extracted from the recent vanadium Pond Return campaign
and from Alternate Feed Materials. In addition, there remains an estimated 1.5-3 million pounds of
solubilized recoverable V
2
O
5
inventory remaining in the tailings management system awaiting future
recovery as market conditions may warrant.
The White Mesa Mill has historically operated on a campaign basis whereby uranium and/or
vanadium recovery is scheduled as mill feed, cash needs, contract requirements, and/or market
conditions may warrant. The Company currently expects that planned uranium production from
Alternate Feed Materials and receipt of uranium-bearing materials from mine cleanup activities will
keep the Mill in operation through all or most of 2020. The Company is also actively pursuing
opportunities to process new and additional Alternate Feed Material sources and new and additional
low-grade ore from third parties in connection with various uranium clean-up requirements.
Successful results from these activities would allow the Mill to extend the current campaign through
2020 and beyond. In addition, if improvements in uranium market conditions are observed, or
conventional mines are ramped up in response to the President's Budget and/or recommendations of
the NFWG, the Company would expect to be able to keep the Mill operating over a considerably
longer period of time.
Conventional Standby, Permitting and Evaluation Activities
During the quarter ended March 31, 2020, standby and environmental compliance activities occurred
at the Canyon Project. Subject to any actions the Company may take in response to the President's
Budget, recommendations of the NFWG, and general market conditions, during 2020, the Company
plans to continue carrying out engineering, metallurgical testing, procurement and construction
management activities at its Canyon Project.
The Company is selectively advancing certain permits at its other major conventional uranium
projects, such as the Roca Honda Project, a large, high-grade conventional project in
New Mexico
.
The Company will also maintain required permits at the Company's conventional projects, including
the Sheep Mountain Project and the Daneros Project. In addition, the Company will continue to
evaluate the Bullfrog Property at its Henry Mountains Project. Expenditures for certain of these
projects have been adjusted to coincide with expected dates of price recoveries based on the
Company's forecasts. All of these projects serve as important pipeline assets for the Company's
future conventional production capabilities, as market conditions warrant.
Sales
During the three months ended
March 31, 2020
, the Company had no uranium sales. The Company
currently has no uranium sales contracts and is therefore fully unhedged to future uranium price
increases.
During the three months ended
March 31, 2020
, the Company did not sell any vanadium. The
Company expects to sell finished vanadium product when justified 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 plans to sell to a diverse group of
customers in order to maximize revenues and profits. The vanadium produced in the recent Pond
Return campaign was 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 and general market conditions.
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, in addition to evaluating the potential to
recover REEs at the Mill.
Continued Efforts to Minimize Costs
The Company will continue to seek ways to minimize the costs of maintaining its critical properties in
a state of readiness for potential improvements in market conditions, and is evaluating whether
additional cost-cutting measures may be warranted at this time as a result of recent declines in
general market conditions.
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.
Cautionary Notes:
This news release contains certain "Forward Looking Information" and
"Forward Looking Statements" within the meaning of applicable
United States
and Canadian
securities legislation, which may include, but are 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 or in response to the President's Budget; any expectations regarding
vanadium opportunities, the Company's program for the recovery of vanadium from pond
solutions, remaining dissolved vanadium in tailings facility solutions, future production
opportunities, or the Company's ability to sell any of its vanadium product at a premium to spot
prices or otherwise; 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 expectation as to how the President's
Budget will be implemented and the timing of implementation
; any expectation with respect to
timelines to production; any expectation that the Company may be able to sell its uranium and
vanadium inventories at potentially higher prices in the future; any expectation that Congress will
make the requested appropriations; any expectations as to the Company's ability to implement any
additional cost-cutting measures; any expectation that the Company may have the opportunity to
process uranium-bearing ores for the recovery of REEs, at all or on commercial terms; and any
expectation that the Company will be able to recover REEs and/or uranium from such ores on a
commercial basis.
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 or in response to the President's Budget; any expectations regarding vanadium
opportunities, the Company's program for the recovery of vanadium from pond solutions,
remaining dissolved vanadium in tailings facility solutions, future production opportunities, or the
Company's ability to sell any of its vanadium product at a premium to spot prices or otherwise; 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 expectation as to how the President's Budget will be implemented and the
timing of implementation
; any expectation with respect to timelines to production; any expectation
that the Company may be able to sell its uranium and vanadium inventories at potentially higher
prices in the future; any expectation that Congress will make the requested appropriations; any
expectations as to the Company's ability to implement any additional cost-cutting measures; any
expectation that the Company may have the opportunity to process uranium-bearing ores for the
recovery of REEs, at all or on commercial terms; any expectation that the Company will be able to
recover REEs and/or uranium from such ores on a commercial basis
; 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.
It should further be noted that the President's proposed budgeted activities are subject to
appropriation by the Congress of
the United States
, and there can be no certainty of the outcome of
this budget or the NFWG's recommendations. Therefore, the outcome of this process remains
uncertain.
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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 21:23e 01-MAY-20