Energy Fuels Announces Q1-2021 Results, Including Robust Balance Sheet, Continued Readiness to Supply Uranium into the U.S. Uranium Reserve when Established & Continued Ramp-up to Commercial Rare Earth
Energy Fuels Announces Q1-2021 Results, Including Robust Balance Sheet,
Continued Readiness to Supply Uranium into the U.S. Uranium Reserve
when Established & Continued Ramp-up to Commercial Rare Earth
Production; Webcast on Monday, May 17, 2021
LAKEWOOD, Colo.
,
May 13, 2021
/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, 2021
. The Company's annual report on Form 10-K 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, 2021, the Company had
$60.37 million
of working capital, including
$44.11 million
of cash and marketable securities and
$27.98 million
of
inventory, including approximately 690,800 pounds of uranium and 1,672,000 pounds of high-purity vanadium in the form of immediately marketable product.
Due to recent share price strength, the Company raised gross proceeds of
$12.99 million
on its at-the-market equity program between
April 1, 2021
and
May
12, 2021
, further enhancing the Company's financial position.
During the quarter ended
March 31, 2021
, the Company incurred a net loss of
$10.91 million
, compared to a net loss of
$5.66 million
for the first quarter of
2020, due primarily to an increase in the Company's share price during Q1 2021, which resulted in a non-cash mark-to-market increase in warrant liabilities of
$3.50 million
during Q1 2021, and an increase of
$2.69 million
in development expenditures in Q1 2021 compared to Q1 2020 primarily due to the
development and ramping up of the expected rare earth element ("
REE
") carbonate production program at the White Mesa Mill during the first quarter of
2021.
With several existing mines on standby and existing inventories of Company-produced, U.S.-origin uranium, the Company continues to be ready to supply
uranium into the U.S. Uranium Reserve once it is established by the U.S. government.
On
March 1, 2020
, the Company, along with Neo Performance Materials ("
Neo
"), announced the joint launch of a U.S.-European REE production initiative
under which the parties plan to produce value-added REE products from natural monazite sands, a byproduct of heavy mineral sands mined in the
southeastern
United States
. Pursuant to this initiative, in
late-March 2021
Energy Fuels commenced ramping-up commercial production of a mixed rare earth
carbonate ("
REE Carbonate
") from natural monazite sands at the Company's White Mesa Mill. Under an agreement in principle signed on
March 1
, and
subject to completion of definitive agreements and successful ramp-up of production, Energy Fuels will ship a portion of its REE Carbonate production to
Neo's REE separations facility in Sillamae,
Estonia
("
Silmet
"). Neo will then process the REE Carbonate into separated REE materials for use in REE
permanent magnets and other REE-based advanced materials.
On
March 9, 2021
, the Company announced that the first shipments of natural monazite ore arrived at the Company's White Mesa Mill from The Chemours
Company's Offerman Plant in
Georgia
, pursuant to a supply agreement entered into by the Company and Chemours in
December 2020
.
On
April 21, 2021
, the Company announced the execution of a non-binding memorandum of understanding for the potential future supply of additional natural
monazite sands from the Titan heavy mineral sand project in
Tennessee
owned by Hyperion Metals Limited.
On
April 23, 2021
, the Company announced that the U.S. Department of Energy ("
DOE
") Office of Fossil Energy and National Energy Technology Laboratory
exercised an option to award Energy Fuels, working with a team from
Penn State University
, an additional
$1.75 million
to complete a feasibility study on the
production of REE products from natural coal-based resources, as well as from other materials such as REE-containing ores like the natural monazite ore the
Company is currently processing at the White Mesa Mill.
On
April 27, 2021
, the Company announced that it engaged Carester SAS ("
Carester
") to prepare a scoping study for the development of a solvent
extraction ("
SX
") REE separation circuit at the White Mesa Mill. Carester is one of the world's leading global consultants on REE supply chains, with expertise
in designing, constructing, operating and optimizing REE production facilities globally.
Mark S. Chalmers
, Energy Fuels' President and CEO, stated:
"Without a doubt, Energy Fuels is making major strides toward restoring critical U.S. rare earth supply chains, while also maintaining our position as the leading
U.S. uranium producer," stated
Mark S. Chalmers
, President and CEO of Energy Fuels. "On rare earths, our efforts over the past several months culminated in
the announcement on
March 1
that Energy Fuels and Neo Performance Materials were creating a new, U.S.-European rare earth supply chain. In early March, we
began to receive shipments of rare-earth-rich natural monazite sands from Chemours'
Georgia
heavy mineral sand operations. In late-March, we began to ramp-
up production of an intermediate rare earth product at our White Mesa Mill in
Utah
using monazite from Chemours. This is expected to be a high-value product
ready to be separated and refined into value-added rare earth products at Neo's plant in
Europe
. At this time, no other U.S. company is producing a product this
far down the rare earth value chain.
"However, as I've said many times, we have much bigger rare earth plans, and the momentum is building rapidly as we execute our purposeful strategy. We are
now taking real steps toward designing and building fully integrated, U.S. rare earth production capabilities. To this end, we hired Carester SAS of
Lyons, France
,
one of the world's leading rare earth supply chain experts, to help us begin designing rare earth separation capabilities at the White Mesa Mill. And we are
continuing several collaborations with the U.S. government and national laboratories on various rare earth initiatives, including being granted a
$1.75 million
contract by the U.S. Department of Energy to perform studies that complement our work to develop rare earth separation capabilities at the White Mesa Mill. We
continue to believe Energy Fuels has distinct advantages in the rare earth sector. Monazite ore has superior distributions of the high-value magnetic rare earths,
including NdPr and "heavy" rare earths, versus most other rare earth minerals mined around the world, and monazite is currently produced as a byproduct of
existing heavy mineral sand operations. We are also taking steps to utilize licensed and existing facilities at the White Mesa Mill to process the monazite into
value-added products. This is a highly capital efficient initiative.
"While we are obviously extremely excited about the potential for rare earths, our core business remains uranium production, and by almost any metric, including a
successful track-record of past and current uranium production, experience in both ISR and conventional uranium mining, existing licensed and constructed
processing capacity, U.S.-origin inventory, recycling capabilities, and the like, Energy Fuels is clearly the leading U.S. uranium company as well. We are
particularly excited by actions the Biden Administration is taking to address climate change and support nuclear energy. The U.S. gets 20% of all of our electricity,
and 55% of our carbon-free electricity, from nuclear. Meeting the President's climate goals will require preserving America's existing fleet of nuclear reactors,
while quickly deploying the next generation of reactors. And global policies, including those in
Europe
and
China
, are supporting nuclear power to achieve carbon
reduction goals. We remain ready to supply U.S.-origin uranium for these initiatives.
"At the same time, we are transforming our company into 'America's Critical Mineral Hub', with the main focus being on the White Mesa Mill in
Utah
. While nearly
all current and future nuclear reactors are fueled by uranium, other clean energy and advanced technologies, including electric vehicles renewable energy and
batteries, require other critical minerals that Energy Fuels produces. A robust market for responsibly produced, American clean energy products and technologies,
made by American workers, is possible in the U.S. How amazing would it be for electric vehicles to be built in America using rare earth products manufactured in
America; and for those EVs to be charged using carbon-free, next generation American nuclear technologies fueled by American uranium and nuclear fuel, along
with renewable energy systems using American rare earth products? Energy Fuels' White Mesa Mill in
Utah
can help this vision become a reality. To say these
are exciting times for our company would be the understatement of my lifetime."
Webcast on
Monday, May 17, 2021
at
4:00 pm ET
(
2:00 pm MT
):
Energy Fuels will be hosting a video webcast
Monday, May 17, 2021
at
4:00 pm ET
(
2:00 pm MT
) to discuss its Q1-2021 financial results and corporate
initiatives. To join the webcast, please click on the link below to access the presentation and the viewer-controlled webcast slides:
Energy Fuels' Q1-2021 Results
If you would like to participate in the webcast and ask questions, please dial (888) 664-6392 (toll free in the U.S. and
Canada
).
A link to a recorded version of the proceedings will be available on the Company's website shortly after the webcast by calling (888) 390-0541 (toll free in the
U.S. and
Canada
) and by entering the code 764688#. The recording will be available until
May 31
,2021.
Selected Summary Financial Information:
$000's, except per share data
Three months ended
March 31, 2021
Three months ended
March 31, 2020
Total revenues
$
353
$
393
Gross profit (loss)
353
(685)
Operating loss
(8,847)
(7,806)
Net loss attributable to the company
(10,908)
(5,657)
Basic and diluted loss per share
(0.08)
(0.05)
As at March 31,
2021
As at December 31,
2020
Financial Position:
Working capital
$
60,365
$
40,158
Property, plant and equipment, net
23,457
23,621
Mineral properties, net
83,539
83,539
Total assets
207,219
183,236
Total long-term liabilities
13,581
13,376
Operations Update and Outlook for the Quarter Ending
March 31, 2021
:
Overview
In response to the proposed establishment of a strategic national U.S. Uranium Reserve program, the Company is evaluating activities aimed towards increasing
uranium production at all or some of our production facilities, including the currently operating White Mesa Mill, as well as the Alta Mesa ISR Facility, the Nichols
Ranch ISR Facility, the La Sal Complex and Pinyon Plain Mine, which are currently on standby.
During 2021, the Company expects to recover uranium at the White Mesa Mill from pond-returns and from alternate feed materials. The Company also expects to
recover uranium and produce mixed REE carbonate from natural monazite ore during 2021, subject to successful ramp-up. The vanadium pond-return campaign
that was conducted in 2019 was brought to a close in early 2020. The Company does not plan to extract and/or recover any amounts of uranium of any
significance from its Nichols Ranch Project in 2021, which was placed on standby in the second quarter of 2020 due to the depletion of its existing wellfields.
Uranium recovery is expected to be maintained at reduced levels, as a result of current uranium market conditions, until such time when market conditions improve
sufficiently.
The Company is also seeking new sources of revenue, including its emerging REE business, as well as 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).
The Company will also continue its support of U.S. governmental activities to support the U.S. uranium mining industry, including the proposed establishment of a
U.S. Uranium Reserve. In addition, the Company is in discussions to potentially sell certain of its non-core properties, although there are currently no binding
offers, and there can be no assurance that a sale will be completed or that we will be successful in completing a sale on acceptable terms.
Extraction and Recovery Activities Overview
During the quarter ended
March 31, 2021
, the Company did not recover significant quantities of U
3
O
8
. The Company expects to recover approximately 30,000 to
60,000 pounds of U
3
O
8
in the year ending
December 31, 2021
for its own account. In 2021, the Company also expects to produce approximately 2,000 to 3,000
tons of mixed REE carbonate at the mill, containing approximately 1,000 to 1,600 tons of total rare earth oxides ("
TREO
"). The Company expects to produce no
vanadium during 2021.
The Company has strategically opted not to enter into any uranium sales commitments for 2021. Therefore, subject to the proposed establishment of a U.S.
Uranium Reserve and general market conditions, all 2021 uranium production is expected to be added to existing inventories, which inventories are expected to
total approximately 720,000 to 750,000 pounds of U
3
O
8
at year-end. Subject to any actions the Company may take in response to the proposed establishment of
a U.S. Uranium Reserve or improvements in general market conditions, both ISR and conventional uranium extraction and/or recovery is expected to continue to
be maintained at reduced levels until such time that improvements in uranium market conditions are observed or suitable sales contracts can be entered into. All
V
2
O
5
inventory is expected to be sold on the spot market if prices rise sufficiently above current levels, but otherwise maintained in inventory. The Company
expects to sell all or a portion of its mixed REE carbonate to global separation facilities and/or to stockpile it for future separation at the Mill or elsewhere.
ISR Activities
The Company expects to produce insignificant quantities of U
3
O
8
in the year ending
December 31, 2021
from Nichols Ranch.
Until such time as improvement in uranium market conditions is observed, the proposed U.S. Uranium Reserve is established, and/or suitable sales contracts can
be procured, the Company expects to maintain the Nichols Ranch Project on standby and defer development of further wellfields and header houses. 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 Project on standby until such time as improvements in uranium market conditions are observed, the
proposed U.S. Uranium Reserve is established, and/or suitable sales contracts can be procured.
Conventional Activities Conventional Extraction and Recovery Activities
During the quarter ended
March 31, 2021
, the White Mesa Mill did not recover any quantities of U
3
O
8
, focusing instead on developing its REE recovery business.
However, during the remainder of 2021, the Company expects to recover approximately 30,000 to 60,000 pounds of U
3
O
8
at the White Mesa Mill, including
uranium recovered through the processing of REE- and uranium-bearing natural monazite ore. The Company also expects to produce approximately 2,000 to
3,000 tons of mixed REE carbonate at the Mill, containing approximately 1,000 to 1,600 tons TREO. The Company currently has approximately 150,000 pounds
of U
3
O
8
contained in stockpiled alternate feed material and ore inventory that can be recovered in the future for the proposed U.S. Uranium Reserve or as general
market conditions warrant. In addition, there remains an estimated 1.5-3 million pounds of solubilized recoverable V
2
O
5
inventory remaining in the Mill's tailings
facility awaiting future recovery, as market conditions may warrant.
Conventional Standby, Permitting and Evaluation Activities
During the quarter ended
March 31, 2021
, standby and environmental compliance activities occurred at the Pinyon Plain 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, La Sal Complex, and the Whirlwind mine. In addition, the Company will continue to evaluate the Bullfrog Property at its Henry Mountains Project. The
Company is also in discussions to potentially sell the Tony M, Daneros, Rim and other non-core conventional assets.
Uranium Sales
During the quarter ended
March 31, 2021
, the Company completed no sales of uranium. The Company currently has no remaining contracts, and therefore all
existing uranium inventory and future production is fully unhedged to future uranium price changes.
Vanadium Sales
During the quarter ended
March 31, 2020
, the Company completed no sales of 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.
Rare Earth Sales
The Company commenced ramping-up commercial production of a mixed REE carbonate in
March 2021
. Subject to successful ramp-up of production of a salable
product during 2021, the Company expects to sell some or all of this intermediate REE product to Neo's Silmet separation facility in
Europe
and potentially to
other REE separation facilities outside the U.S. To the extent not sold, the Company expects to stockpile mixed REE carbonate at the Mill for future separation
and other downstream REE processing at the Mill or elsewhere.
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.
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, and expects to commence commercial production of REE carbonate in 2021. 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, as well as REE carbonate from various uranium-bearing ores.
The Nichols
Ranch ISR Project is currently on standby and has a licensed capacity of 2 million pounds of U
3
O
8
per year. The Alta Mesa ISR Project is also 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
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; any expectation that the Company will continue to be ready to supply uranium into the proposed
U.S. Uranium Reserve once it is established; scalability, and the Company's ability and readiness to re-start, expand or deploy any of its existing projects or
capacity to respond to any improvements in uranium market conditions or in response to the proposed Uranium Reserve; any expectation regarding any
remaining dissolved vanadium in the White Mesa Mill's tailings facility solutions; 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; any expectation that the Company will maintain its position as a leading
uranium company in
the United States
; any expectation that the proposed Uranium Reserve will be implemented and if implemented the manner in which it will
be implemented and the timing of implementation
; any expectation with respect to timelines to production;
any expectation that the White Mesa Mill will be
successful in producing REE Carbonate on a commercial basis; any expectation that Neo will be successful in separating the White Mesa Mill's REE Carbonate
on a commercial basis; any expectation that Energy Fuels will be successful in developing U.S. separation, or other value-added U.S. REE production
capabilities at the White Mesa Mill, or otherwise; any expectation that the Company
and Neo will be successful in jointly developing a fully integrated U.S.-
European REE supply chain;
any expectation that the Company will be successful in building fully integrated U.S REE production capabilities in the future; any
expectation with respect to the future demand for REEs; any expectation with respect to the quantities of monazite ore to be acquired by Energy Fuels, the
quantities of REE Carbonate to be produced by the White Mesa Mill or the quantities of contained TREO in the Mill's REE carbonate; any expectation that Neo
and Energy Fuels will be successful in completing definitive agreements and hence proceeding with their agreement in principle; any expectation that the
Company will enter into definitive agreements with Hyperion Metals Limited for the potential future supply of natural monazite sands from the Titan heavy
mineral sand project, or that the Titan project will commence production and be capable of supplying monazite sands to the Company; any expectation as to the
results of the feasibility study on the production of REE products from natural coal-based resources, or that the work to be performed in connection with the
feasibility study will complement the Company's work to develop rare earth separation capabilities at the White Mesa Mill; any expectation that the Company
has distinct advantages in the rare earth sector or that the Company's REE initiative will be a highly capital efficient initiative; any expectation that the Company
will be successful in transforming itself into America's Critical Mineral Hub; any expectation as to the outcome of President Biden's actions to address climate
change and support nuclear energy, or their impacts on the Company, if any; any expectation that global policies will support nuclear power to achieve carbon
reduction goals; any expectation that a robust market for responsibly-produced, American clean energy products and technologies, made by American workers,
is possible in the U.S.; and any expectation that
the Company will successfully sell certain of its non-core properties on acceptable terms or at all. 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: c
ommodity prices and price fluctuations; processing and mining difficulties,
upsets and delays; permitting and licensing requirements and delays; changes to regulatory requirements; legal challenges; the availability of sources of
alternate feed materials and other feed sources for the White Mesa Mill; competition from other producers; public opinion; government and political actions; the
appropriations for the proposed Uranium Reserve not being allocated to that program and the Uranium Reserve not being implemented; the manner in which
the proposed Uranium Reserve, if established, will be implemented; the Company not being successful in selling any uranium into the proposed Uranium
Reserve at acceptable quantities or prices, or at all; available supplies of monazite sands; the ability of the White Mesa Mill to produce REE Carbonate to meet
commercial specifications on a commercial scale at acceptable costs; the ability of Neo to separate the REE Carbonate produced by the White Mesa Mill to
meet commercial specifications on a commercial scale at acceptable costs; market factors, including future demand for REEs; the ability of Neo and Energy
Fuels to finalize definitive agreements;
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 17:38e 13-MAY-21