Energy Fuels Announces Q1-2023 Results, Including Net Income of $114.26 million, $143.61 million of Working Capital, $19.34 million of Uranium and Vanadium sales and Commencement of Development of Rare Earth Separation Capabilities in Utah
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Energy Fuels Announces Q1-2023 Results, Including Net Income of $114.26 million, $143.61 million of
Working Capital, $19.34 million of Uranium and Vanadium sales and Commencement of Development
of Rare Earth Separation Capabilities in Utah
C
onference Call and Webcast on May 9, 2023
T
he Company sold 300,000 pounds of uranium at a gross margin of 58%, 79,344 pounds of vanadium at
a gross margin of 37%, and the Alta Mesa property for a total gain of $116.45 million; Working capital
increased, total assets increased, and total liabilities decreased.
L
akewood, Colorado, May 5, 2023
E
nergy Fuels Inc. (NYSE American: UUUU; TSX: EFR) (“Energy Fuels” or the “Company”) today reported
its financial results for the quarter ended March 31, 2023. 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.
F
inancial Highlights:
• A
s of March 31, 2023, the Company had a robust balance sheet with $143.61 million of working
capital (versus $116.97 million at December 31, 2022), including $43.83 million of cash and cash
equivalents, $60.44 million of marketable securities, $38.00 million of inventory, and no debt. At
current commodity prices, the Company’s product inventory has a value of $52.53 million;
• During the three months ended March 31, 2023 , the Company realized net income of $114. 26
m
illion, or $0.72 per share, primarily due to: (i) a net gain of $116.45 million on the sale of the
Company’s Alta Mesa in situ recovery (“ISR”) project in Texas; (ii) a net gain of $10.76 million on
t
he sale of 300,000 pounds of uranium (“ U3O8”) to the U.S. Uranium program; (iii) a net gain of
$0.32 million on the sale of 79,344 pounds of vanadium (“V 2O5”); (iv) increased expenses
associated with preparing four (4) of our uranium mines for production; (v) expenses associated
with developing commercial rare earth element (“ REE”) separation capabilities; and (vi) a non -
cash mark-to-market loss on investments accounted for at fair value of $2.96 million.
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• The Company realized a total gross margin of 57% on its product sales during Q1-2023, including
58% on its uranium sale and 37% on its vanadium sales.
• At March 31, 2023, the Company's total assets and current assets increased by 37% and 10%,
respectively, and total liabilities and current liabilities decreased by 44% and 72%, respectively, as
compared to December 31, 2022.
• As of March 31, 2023, the Company held 847,000 pounds of finished U3O8, 906,000 pounds of
finished V2O5, and 250 metric tons ("MT") of finished high-purity, partially separated mixed REE
carbonate ("RE Carbonate") in inventory.
• The Company holds an additional 394,000 lbs. of U 3O8 as raw materials and work -in-progress
inventory, along with 1 - 3 million pounds of solubilized V 2O5 in tailings solutions that could be
recovered in the future.
Uranium Highlights:
• During Q1-2023, the Company completed the sale of 300,000 pounds of U3O8 to the U.S. Uranium
Reserve realizing total gross proceeds of $18.47 million, or $61.57 per pound o f U3O8. This sale
resulted in a gross margin of approximately $35.85 per pound of uranium, or a gross margin of
58%.
• During 2023, the Company expects to sell an additional 200,000 to 260,000 pounds of U3O8 into
its current portfolio of supply agreements with U.S. nuclear utilities at an expected sales price of
approximately $54 - $58 per pound, resulting in an estimated 46% - 50% gross margin.
• During Q1-2023, the Company purchased a total of 120,000 pounds of U.S.-origin U3O8 on the spot
market for a weighted-average price of $50.25 per pound.
• Over the past several months, the Company has made significant progress in preparing four (4) of
our conventional uranium and uranium/vanadium mines to be ready to resume ore production,
including significant workforce expansion and performing needed rehabilitation and development
of surface and underground infrastructure.
• On February 15, 2023, the Company announced it had completed its previously announced sale
of its Alta Mesa ISR Project to enCore Energy Corp. (“ enCore”) for total consideration of $120
million, comprised of $60 million in cash and $60 million in a secured convertible note bearing
interest at a rate of eight percent (8%) per annum, convertible into common shares of enCore at
a price of $2.9103 per share. This sale of a lower priority project provides Energy Fuels with
significant additional cash and working capital, enabling the Company to ramp-up its US industry-
leading uranium and REE production, while avoiding dilution to shareholders.
• In connection with the Alta Mesa Transaction, on May 3, 2023, the Company completed the sale
of its Prompt Fission Neutron assets, including the underlying contracts, technology, licenses and
intellectual property (collectively, the “ PFN Assets ”), to enCore in exch ange for cash
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consideration received at closing of $3.10 million. At closing, the PFN Assets, which the Company
had purchased in 2020 for cash consideration of $0.5 million, had a net book value of $0.35 million.
The PFN Assets were used exclusively at the Alta Mesa ISR Project and are not required for any of
the Company’s other properties. Should the Company have the need for the use of a PFN tool in
the future, the Company retained a 20 -year usage right, subject to the availability of the PFN
Assets, to p urchase, lease and/or license at least one PFN tool and all related and/or required
equipment, technology and licenses on commercially reasonable terms.
• As of April 28, the spot price of U3O8 was $53.75 per pound according to data from TradeTech.
Rare Earth Element Highlights:
• During the three months ended March 31, 2023 , the Company produced approximately 250 MT
of high-purity, partially separated mixed RE Carbonate from monazite, containing approximately
115 MT of total rare earth oxides (“ TREO”), which is the most advanced REE material being
produced commercially in the U.S. today.
• The Company has in circuit an additional 65 to 115 MT of RE Carbonate, containing 35 to 55 MT
of TREO, which it expects to package for sale during the second quarter of 2023.
• In early 2023, the Company began modifying and enhancing its existing solvent extraction (“SX”)
circuits at the Mill to be able to produce separated REE oxides (“ Phase 1”). The Company has
begun this development work in its SX building and ordered most of the major components for
this project, which are expected to be delivered to the Mill in Q3 -2023. “Phase 1” is expected to
be completed and fully commissioned by late 2023 or early 2024 and have the capacity to produce
roughly 800 to 1,000 MT of recoverable separated neodymium-praseodymium (“NdPr”) oxide per
year, subject to securing sufficient monazite feed. "Phase 1" is expected to position Energy Fuels
as one of the worl d’s leading producers of NdPr outside of China. “Phase 1” capital costs are
expected to total approximately $25 million. 1,000 MT of NdPr in permanent magnets could power
up to 1 million electric vehicles ("EVs") per year.
• The Company is engineering furthe r enhancements at the Mill to increase NdPr production
capacity to up to approximately 3,000 MT per year by 2026 ("Phase 2"), and 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 2027 ("Phase 3").
• On February 13, 2023, the Company announced it had completed its previously announced
acquisition of a large heavy mineral sands project in Brazil (the “ Bahia Project”), which has the
potential to supply the Company’s growing REE business with 3,000 - 10,000 MT of REE-bearing
natural monazite sand per year for decades. The Bahia Project also contains significant quantities
of high-value titanium (ilmenite and rutile) and zirconium (zircon) minerals.
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• During Q1-2023, the Company completed 2,266 meters of sonic drilling at the Bahia Project to
confirm and further delineate the rare earth, titanium, and zirconium mineralization. The
Company expects to commence further sonic drilling in Q3 -2023, announce drilling results later
this year, and commence preparation of an SK -1300 and NI 43 -101 compliant mineral resource
estimate.
• The Company continues active discussions with several additional suppliers of natural monazite
around the world to significantly increase the supply of feed for our growing REE initiative.
• As of April 28, the spot price of NdPr oxide was $64 per kg, according to data from Asian Metal.
Vanadium Highlights:
• During Q1-2023, the Company sold approximately 79,344 pounds of existing V2O5 inventory, for
an average weighted sales price of $10.98 per pound of V2O5, for a total gross margin of 37%.
• Due to the high-purity of the Company's vanadium product, these sales occurred at a premium to
V2O5 spot prices prevailing at the time of the sales.
• As of April 28, the spot price of V2O5 was $9.75 per pound, according to data from Fastmarkets.
Medical Isotope Highlights:
• 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.
Mark S. Chalmers, Energy Fuels’ President and CEO, stated:
“Energy Fuels had an exceptional 1st quarter on several metrics, including earnings of $114.26 million,
achieving healthy margins on our product sales, increasing our working capital position to $143.61 million,
increasing our total assets, and reducing our total liabilities. We also significantly enhanced our fixed asset
portfolio by selling the no n-core Alta Mesa uranium property for $120.00 million and closing on the
purchase of the Bahia Project in Brazil, which has the potential to feed our REE separation circuits with
low-cost raw materials for several decades.
”On uranium, we sold 300,000 pounds of U3O8 to the newly established U.S. Uranium Reserve for $18.47
million, or $61.57 per pound, representing a significant premium to the current spot price of uranium,
resulting in a $10.76 million gross margin. We are also getting ready to sell up to another 260,000 pounds
of U 3O8 into our utility contract portfolio, also at healthy operating margins. We are closely tracking
uranium prices, which have shown recent strength, for opportunities to sell additional uranium under
long-term contracts to nuclear utilities at increasingly higher prices.
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"Energy Fuels realized a significant gain of $116.45 million on the sale of our non-core Alta Mesa ISR project
in Texas. Total consideration included $60 million of cash and a $60 million 2-year convertible note bearing
8% interest per year, fully secured by the property. This transaction also resulted in us receiving an
additional $3.48 million cash for the return of collateral on the project's reclamation bonds and a reduction
in our standby costs of approximately $2 million per year.
"At the same time, we continue to perform significant work at four of our conventional uranium mines to
get them ready to resume ore production. This includes the La Sal and Beaver mines at the La Sal Complex
in Utah, the Whirlwind mine in Colorado and the Pinyon Plain mine in Arizona. Energy Fuels currently has
sufficient uranium in inventory to fulfill our current utility contract requirements into 2025. However, we
are seeking additional contracts and spot sale opportunities, along with a continuation of uranium
purchasing by the U.S. government. Therefore, we could begin ore production at one or more of these
projects by 2024.
"We continued to build our REE business as well. We began modifications and enhancements at the White
Mesa Mill expected to produce up to 1,000 MT per year of NdPr oxide by late 2023 or early 2024, subject
to receipt of sufficient monazite feed. We ordered the REE SX cells from a fabricator, with delivery to the
Mill expected in Q3 or Q4-2023. Following delivery, we expect to install, commission, and optimize these
cells, complete other modifications and enhancements to the existing circuits, and begin commercial
production of NdPr oxide, along with uranium, soon thereafter. Upon completion, we believe Energy Fuels'
White Mesa Mill in Utah will house one of the largest NdPr production circuits in the world, excluding
China. We also expect to begin piloting 'heavy' REE separation later this year, which will provide valuable
knowledge for designing and building our Phase 3 Dy, Tb and potentially other REE separation circuits.
"Monazite supply is of course critical to Energy Fuels' rare earth plans. We continue to advance discussions
with several existing monazite suppliers around the world. And, we completed the acquisition of the Bahia
Project in Brazil, which will allow us to control our own low -cost REE supply. The Bahia Project has the
potential to produce between 3,000 to 10,000 MT of monazite, containing 300 to 1,000 MT of NdPr oxide,
per year. We are currently in the midst of a sonic drilling program on the property to confirm and better
define the REE (monazite), titanium (ilmenite, rutile, leucoxene) and zirconium (zircon) resources, which
will inform our mine plan and permitting. We hope to commence production in late 2025 or early 2026,
and ramp-up from there.
"Finally, we sold a small quantity of our vanadium inventory into recent market strength, which saw spot
prices reach $10.80 per pound in February, according to Fastmarkets. Because we produce a high-purity
V2O5 product that is attractive to specialty alloy and chemical markets, we were able to execute this sale
at a premium to reported prices. Accordingly, our realized sales price was $10.98 per pound of V 2O5 on
these sales."
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Conference Call and Webcast at 4:00 pm ET on May 9, 2023:
Energy Fuels will be hosting a conference call and webcast on May 9, 2023 at 4:00 pm ET (2:00 pm MT) to
discuss its Q1 -2023 financial results, the outlook for 2023, and its uranium, rare earths, vanadium, and
medical isotopes initiatives.
To instantly join the conference call by phone, please use the following link to easily register your name
and phone number. After registering, you will receive a call immediately and be placed into the conference
call: RAPIDCONNECT
Alternatively, you may dial in to the conference call by calling 1-888-664-6392, and you will be connected
to the call by an Operator.
You may also access viewer-controlled Webcast slides and/or stream the call by following this link:
WEBCAST
A replay of the call will be available until May 24, 2023 by calling (888) 390- 0541 or (416) 764-8677 and
entering the replay code, 680506#.
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Selected Summary Financial Information:
Three Months Ended
March 31,
$000's, except per share data 2023 2022
Results of Operations:
Uranium concentrates revenues $ 18,470 $ —
Vanadium concentrates revenues 871 2,412
Total revenues 19,613 2,937
Gross margin 11,347 45
Operating loss (405) (10,213)
Net income (loss) 114,264 (14,730)
Basic and diluted net income (loss) per common share 0.72 (0.09)
As of As of
$000's March 31, 2023 December 31, 2022
Financial Position:
Working capital $ 143,611 $ 116,966
Property, plant and equipment, net 14,635 12,662
Mineral properties 113,834 83,539
Current assets 148,914 135,590
Total assets 375,451 273,947
Current liabilities 5,303 18,624
Total liabilities 16,438 29,538
ABOUT ENERGY FUELS
Energy Fuels is a leading US -based critical minerals company. The Company, as the leading producer of
uranium in the United States, mines uranium and produces natural uranium concentrates that are sold to
major nuclear utilities for the production of carbon- free nuclear energy. Energy Fuels recently began
production of advanced rare earth element (“ REE”) materials, including mixed REE carbonate, and plans
to produce commercial quantities of separated REE oxides in the future. Energy Fuels also produces
vanadium from certain of its projects, as market conditions warrant, and is evaluating the recovery of
radionuclides needed for emerging cancer treatments. Its corporate offices are in Lakewood, Colorado,
near Denver, and substantially all its assets and employees are in the United States. Energy Fuels holds two
of America's key uranium production centers: the White Mesa Mill in Utah and the Nichols Ranch in- situ
recovery ("ISR") Project in Wyoming. The White Mesa Mill is the only conventional uranium mill operating
in the US today, has a licensed capacity of over 8 million pounds of U3O8 per year, has the ability to produce
vanadium when market conditions warrant, as well as REE products, from various uranium -bearing ores.
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The Nichols Ranch ISR Project is on standby and has a licensed capacity of 2 million pounds of U 3O8 per
year. The Company recently acquired the Bahia Project in Brazil, which is believed to have significant
quantities of titanium (ilmenite and rutile), zirconium (zircon) and REE (monazite) minerals. In addition to
the above production facilities, Energy Fuels also has one of the largest NI 43 -101 compliant uranium
resource portfolios in the US 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.
Daniel Kapostasy, P .G., Director of Technical Services for Energy Fuels, is a Qualified Person as defined by
Canadian National Instrument 43-101 and has reviewed and approved the technical disclosure contained
in this news release, including sampling, analytical, and test data underlying such disclosure.
The data collected and provided in this disclosure related to the Bahia Project is derived entirely from the
exploration reports for each of the seventeen mineral process areas. Mr. Kapostasy has reviewed these
reports in detail and discussed the methods used with the project geologist in charge of field and laboratory
activities for the previous owners who is also currently an employee of Energy Fuels Brazil, Ltda. Heavy
mineral concentrations were derived for every meter drilled using heavy liquid separations, a standard
method of heavy mineral determination.
To determine the concentration of the various heavy minerals in a sample, the heavy fraction was
separated from the silica sand by using heavy liquid separation. The heavy fraction was then mounted in
epoxy or dispersed on slide glass and viewed under a microscope. A geologist can then identify the various
minerals and determine the concentration of each mineral through a process called point counting,
whereby the geologist identifies each sand grain individually, tallies the number of each mineral and then
divides by the total.
Verification of the heavy mineral concentration was started by the Company in September 2022, when it
hired a contract driller to collect samples using a sonic rig. While no laboratory analyses have been received
to date, visual estimation of the heavy mineral quantity indicates that the historical values seen at the
various process areas are valid.
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 Compan y will be awarded