Energy Fuels Announces Q2-2022 Results, Including Continued Robust Balance Sheet and Market- Leading U.S. Uranium & Rare Earth Positions
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Energy Fuels Announces Q2-2022 Results, Including Continued Robust Balance Sheet and Market-
Leading U.S. Uranium & Rare Earth Positions
Webcast on August 9, 2022
Lakewood, Colorado, August 5, 2022
Energy Fuels Inc. (NYSE American: UUUU; TSX: EFR) (“Energy Fuels” or the “Company”) today reported
its financial results for the quarter ended June 30, 2022. 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 June 30, 2022, the Company had a robust balance sheet with $134.1 million of working capital,
including $86.4 million of cash and cash equivalents , $11.8 million of marketable securities, $28.6
million of inventory , and no short term (or long term) debt . At current commodity prices, the
Company’s product inventory has a value of $43.9 million.
• During the quarter ended June 30, 2022, the Company incurred a net loss of $18.1 million, which
included a non-cash mark-to-market decrease in the value of investments accounted for at fair value
of $13.4 million.
• During Q2 -2022, the Company entered into three (3) long -term uranium sales contracts with U.S.
nuclear utilities. Base quantities under these contracts total 3.0 million pounds with deliveries to occur
during the 2023 – 2030 time period. If the buyers exercise all options, total delivery quantities could
increase to as much as 4.2 million pounds. Annual quantities vary year -to-year, with lower delivery
quantities in the early years, and higher quantities in the later years. Contract pricing has a fixed price
component (fully indexed to inflation) and a spot market component, along with floor and ceiling
prices (fully indexed to inflation). The Company expects to fulfill deliveries during the early years of
these contracts from its significant existing produced inventories.
• In June 2022, t he U.S. Department of Energy (“ DOE”) issued a Request for Proposals (“ RFP”) to
purchase uranium (“ U3O8”) for the new U.S. Uranium Reserve (the “ Reserve”). The DOE states that
they expect to purchase up to 1 million pounds of U 3O8 inventory from up to four (4) qualified U.S.
uranium producers. The uranium must be physically located at Honeywell’s Metropolis Works
conversion facility (the “ U.S. Converter”). Energy Fuels believes it meets all qualifications to supply
the Reserve, and the Company currently holds about 6 92,000 pounds of U 3O8 at the U.S. Converter.
The Company has submitted a bid to sell U3O8 to the Reserve, taking into consideration its long-term
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contract commitments and current and expected market conditions. There are no guarantees the DOE
will purchase uranium from the Company under this RFP.
• During the first half of 2022, t he Company produced approximately 205 tonnes of mixed rare earth
element (“REE”) carbonate (“RE Carbonate”), containing approximately 95 tonnes of total rare earth
oxides (“TREO”). Energy Fuels’ RE Carbonate, which is roughly 32% - 34% NdPr, is the most advanced
REE material being produced in the U.S. today.
• In May 2022, the Company announced it had entered into agreements to acquire a 58 square mile
rare earth land position in Brazil (the “Bahia Project”). The Bahia Project is a well-known heavy mineral
sand (“HMS”) deposit that has the potential to feed the Company’s White Mesa Mill with REE and
uranium-bearing monazite sand for decades. Due diligence is ongoing , and closing is currently
expected to occur on or around August 31, 2022. After closing, the Company expects to conduct an
extensive exploration program to better define the HMS and monazite resource, including
comprehensive sonic drilling and geophysical mapping with the intent to complete an Initial
Assessment under SK-1300 (U.S.) and a Preliminary Economic Assessment under NI 43 -101 (Canada)
during Q4-2022 or Q1-2023.
• The Company is currently in active discussions with several additional sources of natural monazite
sands around the world to significantly increase the supply of feed for its growing REE initiative.
• The Company continues to make excellent progress toward installing full REE separation capabilities
at the Mill to produce both “light” and “heavy” separated REE oxides in the coming years, subject to
successful lice nsing, financing, and commissioning, and continued strong market conditions. The
Company has hired Carester SAS (“Carester”), a global leader in producing separated REE oxides, to
support these REE separation initiatives. The Company is also evaluating installing a smaller “light”
separation circuit within the existing Mill facilities with the ability to produce up to 1,500 tonnes TREO
and 375 tonnes of NdPr oxide per year in the next 18-24 months. Initial estimates indicate low capital
and operating costs for this circuit until a larger facility in the order of 10,000 tonnes TREO can be
permitted, constructed and commissioned.
• During the first half of 2022, t he Company sold approximately 575,000 pounds of the Company’s
existing inventory of vanadium (“V2O5”) (as ferrovanadium, “FeV”), for an average weighted net price
of $13.44 per pound of V 2O5. Vanadium markets have dropped in recent weeks . Therefore, the
Company has halted sales of its inventory which currently stands at approximately 1.05 million pounds
of V2O5. However, the Company expects to resume sales when markets improve again. The Company
is evaluating the potential to resume vanadium recovery at the Mill in the future as market conditions
may warrant for future sale and to replace sold inventory, where its tailings pond solutions contain an
estimated additional 1.0 to 3.0 million recoverable pounds of V2O5.
• To bolster the Company’s management team during its current growth phase and expansion into the
REE industry, Energy Fuels has hired John Uhrie as Chief Operating Officer (“ COO”), effective August
1, 2022, and Tom Brock as Chief Financial Officer (“ CFO”), effective August 8, 2022 . Mr. David
Frydenlund, the Company’s current CFO, General Counsel and Corporate Secretary, was appointed to
the position of Executive Vice President, Chief Legal Officer and Corporate Secretary of the Company,
effective August 8, 2022. Mr. Brock previously served as Vice President and Chief Accounting Officer
for Extraction Oil and Gas Inc. and prior thereto as Vice President, Chief Accounting Officer and
Corporate Controller for American Midstream Partners LP . Dr. Uhrie most recently served as Vice
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President for Metals, Exploration and Development for The Doe Run Company, a global leader in lead,
zinc and copper production and prior thereto as President, Consulting Services of the Americas for
RPM Global, as Manager of P rocess Metallurgy for Newmont Mining Corp ., and as Manager,
Metallurgy and Strategic Planning, Africa and Manager of Hydrometallurgical Operations for Freeport
McMoRan Copper and Gold, Bagdad Operations . Both Mr. Brock and Dr. Uhrie bring significant
experience in managing producing natural resource companies.
Mark S. Chalmers, Energy Fuels’ President and CEO, stated:
“Energy Fuels continues to make progress on all fronts of our uranium, rare earth, vanadium and medical
isotope businesses. Uranium markets have been volatile but remain strong. We continue to believe the
short and long -term fundamentals for uranium continue to point to higher pricing. We are extremely
pleased to announce the execution of three long-term contracts with U.S. nuclear utilities. With up to 4.2
million pounds of uranium deliveries between 2023 and 2030, at attractive pricing and other terms, these
contracts will help underpin Energy Fuels’ uranium business for many years to come. We are also beginning
to perform the work needed to recommence production at one or more of our uranium mines. The
Company’s substantial existing uranium inventories are expected to provide sufficient uranium for the
early years of the contract deliveries. Ho wever, we expect to be in production at one or more of our
uranium mines in the next two years. Our substantial inventories will also allow Energy Fuels the potential
to offer significant quantities of uranium to the new U.S. Uranium Reserve. During the second half of 2022,
we expect to shift back to processing stockpiled ores for uranium production, and we expect to produce
100,000 to 120,000 pounds of uranium in 2022.
“We sold some of our substantial vanadium inventories during the first half of 2022, as prices rose during
the quarter. However, in recent weeks, vanadium prices have dropped back. Therefore, we stopped our
sales. Nonetheless, during the first half of 2022, we sold about 575,000 pounds of V 2O5, contained in
ferrovanadium, at an average net price of $13.44 per pound V2O5. Our vanadium inventory was carried on
our balance sheet at $6.09 per pound V2O5, so we have been able to capture some gross margin on these
sales. Plus, we still have another 1.05 million pounds of V 2O5 in inventory that we can sell into future
market strength.
“Energy Fuels’ rare earth initiative continues to proceed extremely well , and we believe we are making
more progress, faster, than any other U.S. company. Last year, we began production of a high-purity mixed
rare earth carbonate that is ready for separation. No other company in the U.S. is commercially producing
a product as advanced as Energy Fuels. In March 2022, we began the partial separation of lanthanum from
our rare earth carbonate, using existing solvent extraction equipment at our White Mesa Mill. This is the
first commercial-scale rare earth separation to occur in the U.S. in many years. As a result, we produced a
very high-purity rare earth carbonate , with most of the lanthanum removed , that contains about 32% -
34% NdPr. We also performed pilot-scale rare earth separation in the Mill’s laboratory, where we produced
about two kilograms of high -purity NdPr oxide per day. We expect to resume rare earth processing later
in 2022, when we receive additional shipments of monazite sand from Chemours. It is early days, but with
the outstanding achievements of our internal staff, compl emented by our relationships with Neo
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Performance Materials (“Neo”) and Carester, we are confident that we will restore U.S. rare earth
separation capabilities in the coming years.
“Finally, our medical isotope initiative is also advancing nicely. As previously announced, we are evaluating
the recovery of radioisotopes from our existing uranium and rare earth process streams at the White Mesa
Mill that could potentially be used in emerging targeted alpha therapy ( “TAT”) cancer therapeutics. We
look forward to providing more information on this initiative in the coming months.
“Lastly, I would like to welcome Tom Brock and John Uhrie to Energy Fuels’ management team. I believe
Energy fuels is making the leap to large-scale production of uranium and rare earth elements in the coming
years. Therefore, we are extremely pleased to add these two individuals to our management team, both
of whom have extensive experience in managing operating natural resource companies.”
Webcast at 4:00 pm EDT on August 9, 2022:
Energy Fuels will be hosting a video webcast on August 9, 2022 at 4:00 pm EDT (2:00 pm MDT) to discuss
its Q2-2022 financial results, the outlook for 2022, uranium, rare earths, vanadium, and medical isotopes.
To join the webcast and access the presentation and viewer-controlled webcast slides, please click on the
link below:
Webcast Link
If you would like to participate in the webcast and ask questions, please dial in to 1-888-664-6392 (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 1-888-390-0541 (toll free in the U.S. and Canada) and by entering the code 536175#.
The recording will be available until August 23, 2022.
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Selected Summary Financial Information:
Financial Discussion:
At June 30, 2022, the Company had $134.1 million of working capital, including $98.1 million of cash and
cash equivalents and marketable securities and $28.6 million of inventory, including approximately
692,000 pounds of uranium and 1.05 million pounds of high-purity vanadium, both in the form of
immediately marketable product. The current spot price of U3O8, according to TradeTech, is $48.75 per
pound, and the current mid-point spot price of V2O5, according to Metal Bulletin, is $8.00 per pound.
Based on those spot prices, the Company's uranium and vanadium inventories have a current market
value of $33.7 million and $8.4 million, respectively, totaling $42.1 million. The Company also holds RE
Carbonate inventory with a current value of $1.8 million, for total product inventory of $43.9 million at
current commodity prices.
During the quarter ended June 30, 2022, the Company incurred a net loss of $18.1 million, compared to
a net loss of $10.8 million for the second quarter of 2021, and a net loss of $32.8 million for the six
months ended June 30, 2022 compared to a net loss of $21.7 million during the first six months of 2021.
The increased net losses in 2022 are due primarily to a non-cash mark-to-market decrease in the value
of investments accounted for at fair value of $13.4 million for the second quarter of 2022 and $16.8
million for the six months ended June 30, 2022. The Company has seen improvement in the value of
these investments accounted for at fair value subsequent to quarter end.
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Operations Update and Outlook for 2022:
Overview
The Company continues to believe that uranium supply and demand fundamentals point to higher
sustained uranium prices in the future. In addition, Russia’s recent invasion of Ukraine and the recent entry
into the uranium market by financial entities purchasing uranium on the spot market to hold for the long-
term has the potential to result in higher sustained spot and term prices and, perhaps, induce utilities to
enter into more long -term contracts with non -Russian producers like Energy Fuels to ensure secur ity of
supply and more certain pricing. Having recently secured three long -term uranium contracts with major
U.S. utilities, the Company is beginning to perform the work needed to recommence production at one or
more of its mines and in-situ recovery (“ISR”) facilities, starting as soon as 2023. Until such time when the
Company has ramped back up to commercial uranium production, it can rely on its significant uranium
inventories to fulfill its new contract requirements. The Company also continues to evalua te selling a
portion of its inventories on the spot market in response to future upside price volatility, into the newly
created U.S. Uranium Reserve Program, or for delivery into additional long -term supply contracts if
procured. During the first half of 2022, the Company also began selling a portion of its vanadium inventory
into then strengthening markets.
The Company will also continue to seek new sources of revenue, including through its emerging REE
business, as well as new sources of Alternate Feed Materials and new fee processing opportunities at the
Mill that can be processed without reliance on current uranium sales prices. The Company is also seeking
new sources of natural monazite sands (in addition to the proposed acquisition of the Bahia Projec t) for
its emerging REE business, is evaluating the potential to recover radioisotopes for use in the development
of TAT medical isotopes for the treatment of cancer, and continues its support of U.S. governmental
activities to assist the U.S. uranium mining industry, including the new U.S. Uranium Reserve Program and
other efforts to restore domestic nuclear fuel capabilities.
Extraction and Recovery Activities Overview
During 2022, the Company plans to recover 100,000 to 120,000 pounds of uranium and approximately
650 to 1,000 tonnes of mixed RE Carbonate containing approximately 300 to 450 tonnes of TREO.
No vanadium production is currently planned during 2022, though the Company sold some of its existing
vanadium inventory into recent strong markets and is evaluating the potential to recommence vanadium
production in 2023 or later years as market conditions may warrant for future sale and to replace sold
inventory.
The Company has secured three new long-term sales contracts with U.S. nuclear utilities and is continuing
to strategically pursue additional uranium sales commitments with pricing expected to have both fixed
and market-related components. The Company believes that recent price increases, volatility and focus on
security of supply in light of Russia’s invasion of Ukraine have increased the potential for the Company to
make uranium sales and procure additional term sales contracts with utilities at pricing th at sustains
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production and covers corporate overhead. Therefore, existing inventories may increase from 692,000
pounds of U3O8 to 792,000 to 812,000 pounds of U3O8 at year-end 2022 or may increase to a lesser extent,
or be reduced, in the event the Company sells a portion of its inventory on the spot market , to the U.S.
Uranium Reserve, or pursuant to term contracts in 2022.
ISR Activities
The Company expects to produce insignificant quantities of U 3O8 in the year ending December 31, 2022
from Nichols Ranch and Alta Mesa. Until such time when market conditions improve sufficiently, suitable
term sales contracts can be procured, or the U.S. Uranium Reserve Program is expanded, the Company
expects to main tain the Nichols Ranch and Alta Mesa Projects on standby and defer development of
further wellfields and header houses.
Conventional Activities
Conventional Extraction and Recovery Activities
During the six months ended June 30, 2022, the Mill did not package any material quantities of U 3O8,
focusing instead on developing its REE recovery business. During the six months ended June 30, 2022, the
Mill produced approximately 205 tonnes of RE Carbonate, containing approximately 95 tonnes of TREO.
The Mill recovered small quantities of uranium during the Quarter, which were retained in circuit. During
2022, the Company expects to recover 100,000 to 120,000 pounds of uranium at the Mill as finished
product. The Company expects to recover approximately 650 to 1,000 tonnes of mixed RE Carbonate
containing approximately 300 to 450 tonnes of TREO at the Mill during 2022. The Company expects to sell
all or a portion of its mixed RE Carbonate to Neo or other global separation facilities and/or to stockpile it
for future production of separated REE oxides at the Mill or elsewhere. The Company is in advanced
discussions with several sources of natural monazite sands (in addition to the Bahia Project) to secure
additional supplies of monazite sands, which if successful, would be expected to allow the Company to
increase RE Carbonate production.
In addition to its 692,000 poun ds of finished uranium inventories currently located at North American
conversion facilities and at the Mill, the Company has approximately 300,000 pounds of U3O8 contained in
stockpiled Alternate Feed Materials and other ore inventory at the Mill that can be recovered relatively
quickly in the future, as general market conditions may warrant (totaling about 992,000 pounds of U 3O8
of total uranium inventory). The Company is also seeking to acquire additional ore inventory from third
party mine cleanup activities that can be recovered relatively quickly in the future.
The Company currently holds 1.05 million pounds of V 2O5 in inventory, and there remains an estimated
1.0 to 3.0 million pounds of additional solubilized recoverable V2O5 remaining in tailings solutions awaiting
future recovery, as market conditions may warrant.
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Conventional Standby, Permitting and Evaluation Activities
During the six months ended June 30, 2022, standby and environmental compliance activities continued
at the fully permitted and substantially developed Pinyon Plain Project (uranium and, potentially, copper)
and the fully permitted and developed La Sal Complex (uranium and vanadium). The Company plans to
continue carrying out engineering, metallurgical tes ting, procurement and construction management
activities at its Pinyon Plain Project. The timing of the Company’s plans to extract and process mineralized
materials from these Projects will be based on sustained improvements in general market conditions,
procurement of suitable sales contracts and/or the expansion of the U.S. Uranium Reserve Program.
The Company is selectively advancing certain permits at its other major conventional uranium projects,
such as the Roca Honda Project, which is a large, high -grade conventional project in New Mexico. The
Company is also continuing to maintain required permits at its conventional projects, including the
Whirlwind Project, which came out of temporary cessation during the Quarter, and the Sheep Mountain
project. In addition, the Company will continue to evaluate the Bullfrog 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 these projects serve as importan t pipeline assets for the Company’s future
conventional production capabilities, as market conditions may warrant.
Uranium Sales
During the six months ended June 30, 2022, the Company entered into three uranium sale and purchase
agreements with major U.S. utilities, constituting its first new long -term supply contracts since 2018.
Having observed a marked uptick in interest from nuclear utilities seeking long -term uranium supply, the
Company remains actively engaged in pursuing additional selective long-term uranium sales contracts.
The Company submit ted a bid to sell a portion of its existing uranium inventory into the U.S. Uranium
Reserve at pricing that provides an appropriate rate of return to the Company. There are no guarantees
that the U.S. government will buy all, or any, of the uranium the Company offers for sale.
Vanadium Sales
As a result of strengthening vanadium markets, during the six months ended June 30, 2022, the Company
sold approximately 575,000 pounds of V2O5 (as FeV) at a gross weighted average price of $13.44 per pound
of V2O5. The Company expects to sell its remaining 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 expects to sell to a
diverse group of customers in order to maximize revenues and profits. The vanadium produced in the
2018/19 pond return campaign was a high -purity vanadium product of 99.6%-99.7% V2O5. 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.