Energy Fuels Announces Q3-2021 Results, Including Robust Balance Sheet, Market-Leading U.S. Uranium Position & Commercial Rare Earth Production
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Energy Fuels Announces Q3-2021 Results, Including Robust Balance Sheet, Market-Leading
U.S. Uranium Position & Commercial Rare Earth Production
Webcast on November 2, 2021
Lakewood, Colorado – November 1, 2021
Energy Fuels Inc. (NYSE American: UUUU; TSX: EFR) (“Energy Fuels” or the “Company”) today reported
its financial results for the quarter ended September 30, 2021. 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 September 30, 2021, the Company had a very robust balance sheet with $132.8 million of working
capital, including $100.8 million of cash and marketable securities and $29.3 million of inventory. At
current commodity prices, the Company’s product inventory has a value of $46.9 million.
• During the quarter ended September 30, 2021, the Company incurred a net loss of $8.0 million, due
primarily to increased development expenditures and other costs incurred in ramping up our mixed rare
earth element (“REE”) carbonate (“RE Carbonate”) production at the White Mesa Mill in Utah (the “Mill”).
• Between June 30, 2021 and October 15, 2021, the price of uranium rose 42% , mainly due to the entry of
financial entities into the market who are buying uranium on the spot market with a stated intent to hold
the inventory for the long-term.
• With several existing uranium mines on standby and significant inventories of Company-produced, U.S.-
origin uranium available for sale, the Company is actively seeking out opportunities to supply uranium to
nuclear utilities under term contracts while also evaluating the potential to sell some inventory on the
spot market.
• The Company is in the process of ramping up to expected commercial-scale production of RE Carbonate
in Q1-2021, and began deliveries of this intermediate REE product to a separation facility in Europe in July
2021.
• The Company is currently in active discussions with several global suppliers of natural monazite ore to
supply feed for this growing REE initiative, which has the potential to include the production of separated
REE oxides in the future, subject to licensing, successful commissioning, and prevailing market conditions.
• On October 27, 2021, t he Company completed the sale of a package of non-core conventional uranium
projects located in Utah and Colorado to Consolidated Uranium Inc. (“CUR”). Based on CUR’s closing share
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price of Cdn$2.95 on October 26, 2021, the U.S.-to-Canadian exchange rate as of closing, and assuming
full performance of th e stipulated deferred cash payments , the current value of this divestment is
approximately $35.1 million, plus additional production payments totaling up to Cdn$5 million payable
upon commencement of production from the projects in the future.
• On July 29, 2021, t he Company entered into a strategic alliance agreement with RadTran, LLC, a private
technology development company, to evaluate the recovery of thorium and potentially radium from the
Company’s RE Carbonate and uranium process streams for use in the production of medical isotopes for
emerging targeted alpha therapy (“TAT”) cancer therapeutics.
• On September 16 and 17, 2021, the Company hosted mining, environmental and political heavyweights at
an Open House at its White Mesa Mill in Utah to showcase its uranium and REE activities. Utah Senators
Mike Lee and Mitt Romney, Congressman John Curtis, C onstantine Karayannopoulos, CEO Neo
Performance Materials, Dr. Kathryn Huff, Principal Deputy Assistant Secretary for Nuclear Energy in the
U.S. Department of Energy and others, delivered remarks in person or virtually.
• At the Open House, the Company also announced the establishment of its San Juan County Clean Energy
Foundation, a fund specifically designed to contribute to the local communities, including Tribal
communities, surrounding the Company’s White Mesa Mill in southeast Utah.
Mark S. Chalmers, Energy Fuels’ President and CEO, stated:
“Energy Fuels continues to make rapid progress toward positioning our White Mesa Mill as America’s
“Critical Minerals Hub,” by maintaining the Mill’s key uranium and vanadium production capabilities while
further diversifying our portfolio to include rare earth elements production – an exciting and strategically
important move both domestically and for the Company. We also continue to watch the uranium markets
closely in order to best evaluate our opportunities to capitalize on recent price increases and market
improvements.
“After many years of low prices, uranium markets have recently sprung to life with significant price action.
Between mid-August and mid-September, the spot price of uranium rose a staggering 66%, mainly due to
significant spot purchases by financial entities who have stated their intention to hold the uranium for
several years. Nuclear utilities, traders, and others have had access to plentiful uranium on the spot market
for the past several years and, in many cases, depended on the spot market to meet their short- and mid-
term fuel requirements and delivery commitments . These new purchasers of uranium are removing
material from the spot market, thereby potentially creating a fundamental shift in the market by rapidly
increasing demand. One could liken these entities to another major, new nuclear utility entering the scene
and consuming large quantities of uranium, as this material is not expected to be available for sale in the
foreseeable future, if ever. We believe this new dynamic could create opportunities for Energy Fuels to
enter into long -term supply contracts for a portion of our production with nuclear ut ilities at prices,
quantities and other terms that generate sufficient project cashflow, all while keeping the majority of our
production leveraged to further potential increases in uranium prices.
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“Earlier this year, Energy Fuels took major strides toward becoming a major player in the global rare earth
element space. As I mentioned before, we are currently producing mixed rare earth carbonate from U.S.-
sourced natural monazite sand at our White Mesa Mill. Because our product is ready for separation into
individual rare earth oxides without further processing, w e are currently producing an intermediate rare
earth product in a more advanced form than any oth er U.S. company . We will be receiving additional
shipments of natural monazite sand in Q4-2021 and throughout 2022, and we are in advanced discussions
with several monazite suppliers around the world to secure a diverse supply of feed for this exciting
initiative. We are also very excited about our Strategic Alliance with RadTran, which ha s the potential to
help produce isotopes from our existing RE Carbonate and uranium process streams for use in cancer
therapeutics that can improve human health and , ultimately, save lives. These two initiatives, which are
complementary to our core uranium business, are examples of the unique and valuable capabilities of the
White Mesa Mill.
“Our distinct competitive advantage over our peers is that we have the existing licenses and permits ,
longstanding experience and expertise, and unique facilities and projects in a diverse number of locations
that, together, are able to recover, manage, process and dispose of radionuclide-bearing materials. This is
why we are the number one uranium producer in the U.S. and why we believe we have the strong potential
to become one of the lowest -cost, non -Chinese rare earth producers in the world. These unique
capabilities also allow us to produce vanadium when market conditions warrant, execute our industry-
leading, low-cost recycling programs, and pursue our innovative initiative with RadTran to recover thorium
and radium for use in the medical isotopes needed for emerging cancer therapies. We will continue to
seek new ways to leverage our unique capabilities with the ultimate goals of generating substantia l free
cashflow and creating shareholder value.”
Webcast at 4:00 pm ET on November 2, 2021:
Energy Fuels will be hosting a video webcast on November 2, 2021 at 4:00 pm ET (2:00 pm MT) to discuss
its Q3-2021 financial results, uranium strategy, rare earth production and other corporate initiatives. 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 036877#.
The recording will be available until November 16, 2021.
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Selected Summary Financial Information:
$000's, except per share data Nine months ended
September 30, 2021
Nine months ended
September 30, 2020
Total revenues $ 1,524 $ 1,274
Gross profit (loss) 796 (370)
Operating Loss (25,570) (23,624)
Net income (loss) attributable to the company (29,562) (22,699)
Basic and diluted loss per share (0.21) (0.19)
$000's As at September 30, 2021 As at December 31, 2020
Financial Position:
Working capital $ 132,793 $ 40,158
Property, plant and equipment, net 22,211 23,621
Mineral properties, net 83,539 83,539
Total assets 267,283 183,236
Total long-term liabilities 13,877 13,376
Financial Discussion:
At September 30, 2021, the Company had $ 132.8 million of working capital, including $ 100.8 million of
cash and marketable securities and $29.3 million of inventory, including approximately 691,000 pounds of
uranium and 1,672,000 pounds of high-purity vanadium, both in the form of immediately marketable
product. The current spot price of U 3O8, according to TradeTech, is $47.00 per pound (up 5 5% in 2021),
and the current mid-point spot price of V 2O5, according to Metal Bulletin, is $ 8.00 per pound (up 48% in
2021). Based on today’s spot prices, the Company’s uranium, vanadium, and RE Carbonate inventories
have a current market value of $ 32.5 million, $13.4 million, and $1.0 million respectively, totaling $46.9
million.
Following the quarter -end, on October 27, 2021, the Company completed the sale of certain non -core
conventional assets to CUR. In addition to receiving $2 million cash at closing, the Company also now holds
19.9% of the outstanding shares of CUR having a current value of approximately $28.3 million.
During the quarter ended September 30, 2021, the Company incurred a net loss of $8.0 million, compared
to a net loss of $ 8.9 million for the third quarter of 2020, and a net loss of $ 29.7 million year-to-date
compared to $22.8 million during the first nine months of 2020. The increased net losses in 2021 are due
primarily to increased development expenditures incurred in ramping up our RE Carbonate production at
the Mill of $1.8 million during the quarter and $6.1 million year-to-date, and to underutilized capacity
production costs applicable to r are earth concentrates during the quarter and year -to-date of $0. 45
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million. The underutilized capacity production costs are due to low throughput rates as the Mill ramps-up
to commercial -scale production . To date, the Mill has focused on producing commercially salable RE
Carbonate at low throughput rates and has been very pleased with the resulting product it is shipping for
separation. The Mill expects to increase its throughput rate s as its supplies of monazite sands increase.
The Company is in advanced discussions with several monazite suppliers to secure additional supplies of
monazite sands, and once secured, we expect these additional supplies will result in sufficient throughput
to reduce underutilized capacity production costs and allow the Company to realize its expected margins
on a continuous basis.
Commencement of Rare Earth Carbonate Deliveries in 2021:
In July, the Company commenced deliveries of RE Carbonate to the Silmet rare earth separations facility
in Estonia, owned by Neo Performance Materials (“ Neo”), creating a new United States -to-Europe rare
earth supply chain. During the initial ramp-up of RE Carbonate production , the Company produced
approximately 270 tonnes of RE Carbonate (containing approximately 120 tonnes of total rare earth oxides
(“TREO”)) from natural monazite sands mined from heavy mineral sand (“HMS”) in Georgia, USA by The
Chemours Company. Subject to final verification, initial analyses indicate that Energy Fuels’ RE Carbonate
meets or surpasses the specifications of Neo’s separation facility.
Monazite sand is widely recognized as one of the most valuable rare earth minerals in the World, due to
its superior distributions of magnetic REEs needed for various clean energy, defense and other advanced
technologies. Monazite from the southeast U.S. typically contains roughly 55% TREO of which the
magnetic elements neodymium and praseodymium ( "NdPr") comprise approximately 22% of the TREO.
NdPr are among the most valuable of the rare earth elements, as they are the key ingredient in the
manufacture of high -strength permanent magnets th at are essential to the lightweight and powerful
motors required in electric vehicles, permanent magnet wind turbines used for renewable energy
generation, and a variety of other modern technologies, including, mobile devices and defense
applications. U.S. Monazite also contains approximately 14.4% "heavy" rare earths on a TREO basis,
including roughly 1.5% dysprosium and terbium which have additional important magnet and national
defense applications.
Natural monazite sand is currently recovered as a low -cost byproduct of HMS operations in the U.S. and
elsewhere in the world. The historic challenge with monazite is that it contains higher concentrations of
natural uranium, thorium and other radionuclides relative to other minerals, thereby requiring specific
licenses and specialized technical capabilities to handle and process. Energy Fuels currently holds the
required licenses, and in 2021 we unlocked the value of this domestic resource. Energy Fuels’ commercial-
scale production of RE Carbonate from U.S. -mined natural monazite sand positions Energy Fuels as the
only company in North America currently producing a monazite -derived, enhanced rare earth material ,
and the only company in North America producing an intermediate rare earth product ready for separation
without further processing.
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The Company and Neo also announced the signing of a definitive supply agreement under which Energy
Fuels will ship all or a portion of its RE Carbonate to Neo’s Silmet facility for processing into separated rare
earth materials used in rare earth permanent magnets and other rare earth -based advanced materials.
We believe the Company is well on its way to creating a new, low -cost, fully integrated U.S. rare earth
supply chain that meets the highest global standards for environmental protection, sustainabilit y and
human rights , and that allows for source validation and tracking from mining through final end -use
applications for manufacturers in North America, Europe, Japan and other nations.
We are currently scoping the potential to produce separated REE oxides using proven solvent extraction
(“SX”) technology that we have utilized for the recovery of uranium and vanadium over the past 40+ years.
We are also evaluating moving farther down the REE supply chain to produce certain rare earth metals,
alloys and other advanced REE products.
Sale of Non-Core Conventional Assets to International Consolidated Uranium Inc:
On October 27, 2021, the Company completed the sale of a portfolio of non -core conventional uranium
projects located in Utah and Colorado, including the Daneros mine, the Tony M mine, the Rim mine, the
Sage Plain project, and several U.S. Department of Energy leases , to CUR. In addition, the Company and
CUR entered into toll-milling and operating agreements with respect to the properties. The consideration
payable by CUR to Energy Fuels in cluded $2 million cash payable at closing, such number of shares that
results in Energy Fuels holding 19.9% of the outstanding CUR common shares immediately after closing,
Cdn$6 million of deferred cash payable over time, and up to Cdn$5 million of deferre d cash payable on
the commencement of commercial production at the properties. Through this accretive disposition,
Energy Fuels believes the value of these high-quality, permitted, and past -producing mines can be
unlocked for Company shareholders, while al so allowing the Company to cut standby costs, earn
management fees, and potentially realize toll milling fees in the future. Based on the October 26, 2021
CUR share price, exchange rates and assuming full performance of th e agreement, the current value of
this divestment is approximately $ 35.1 million, plus additional payments totaling up to Cdn$5 million
payable upon commencement of production from the projects in the future.
Collaboration with RadTran, LLC on Recovering Medical Isotopes for Advanced Cancer Therapies:
On July 28, 2021, the Company announced the execution of a Strategic Alliance Agreement with RadTran,
LLC, a technology development company focused on closing critical gaps in the procurement of medical
isotopes for emerging TAT cancer therapeutics and other applications. Under this strategic alliance, the
Company will evaluate the feasibility of recovering Th -232, and potentially Ra -226 from its existing
uranium and RE Carbonate process streams at the Mill and, together with RadTran evaluate the feasibility
of recovering Ra-228 from the Th-232 and Th-228 from the Ra-228 at the Mill using RadTran technologies.
The recovered Ra-228, Th-228 and potentially Ra -226 would then be sold to pharmaceutical companies
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and others to produce P b-212, Ac -225, Bi -213, Ra -224 and Ra -223, which are the leading medically
attractive TAT isotopes for the treatment of cancer. Existing supplies of these isotopes for TAT applications
are in short supply, and methods of production are costly and currently cannot be scaled to meet the
demand as new drugs are developed and approved . This is a major roadblock in the research and
development of new TAT drugs as pharmaceutical companies wait for scalable and affordable production
technologies to become available. Under this exciting initiative, the Company has the potential to recycle
valuable isotopes from its existing process streams, that would otherwise be lost to disposal, for use in the
treatment of cancer.
Market Conditions
Uranium prices improved significantly during the quarter, while also exhibiting considerable volatility.
Between June 30, 2021 and September 30, 2021, uranium prices rose from $32.40 per pound to $42.20
per pound (30% increase), reaching a high of $50.50 on September 17 and a low of $30.50 on August 13.
Subsequent to the quarter, the uranium price dropped to $37.40 on October 8, then rose again to $46.00
on October 15. The outlook for uranium continues to improve, as demand continues to outpace supplies.
In particular, financial intermediaries, including the Sprott Physical Uranium Trust (“SPUT”), entered the
market to purchase uranium and build inventories for a long-term hold. On October 18, it was announced
that a new Kazakh -led uranium fund was going t o be created to similarly buy and hold uranium in
inventory. Energy Fuels holds 691,000 pounds of uranium in inventory that we recently produced at our
own facilities in the U.S. through our low -cost alternate feed material production, which is among the
lowest-cost uranium production in the world today. In addition, the Company holds another approximately
252,000 pounds of U3O8 contained in stockpiled alternate feed material and ore inventory at the Mill that
can be recovered relatively quickly. Between the finished inventory and stockpiled inventory, the Company
holds over 900,000 pounds of U3O8 that can be sold immediately or in the near-term.
Vanadium prices were flat during the quarter, beginning the quarter at $8.75 per pound V2O5 and ending
the quarter at $8.78 per pound V2O5. An improving global economy, coupled with political unrest in South
Africa and other factors, has caused vanadium prices to rise nearly 63% this year, from $5.40 per pound
as of December 25, 2020 to $ 8.78 per pound as of September 24, 2021. Vanadium is a valuable clean
energy metal, historically used in steel, master alloys, and chemicals. It is also seeing considerable interest
in emerging grid-scale battery technologies used to store renewable energy. Energy Fuels also holds about
1.7 million pounds of finished high-purity vanadium pentoxide in inventory, plus 1.5 to 3.0 million pounds
of solubilized vanadium inventory in the Mill’s tailings solutions that we can recover relatively quickly. We
also hold l arge quantities of high -grade vanadium resources at our standby mines where we recently
developed new mining techniques that we believe can increase production and lower costs when mining
resumes in the future. The Mill was the largest U.S. vanadium producer as recently as 2019.
Finally, REE prices remain strong with the price of NdPr oxide increasing 45% year to date from $78.50/kg
on January 4, 2021 to $113.80/kg on September 29, 2021. The Company’s sales price for its RE Carbonate
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is currently based on the prices of REE oxides, with the price of NdPr being the primary driver of the
Company’s RE Carbonate sales price at this time.
Operations Update and Outlook for Period Ending September 30, 2021
Overview
The Company continues to believe that uranium supply and demand fundamentals continue to point to
higher sustained uranium prices in the future. In addition, 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 long-term
contracts with producers like Energy Fuels to ensure security of supply and more certain pricing. However,
the recent, relatively short-term uranium price increases are not yet sufficient to justify commencing
uranium production at the Company’s mines and ISR facilities. As a result, the Company expects to
maintain uranium recovery at reduced levels, until such time when increased prices are sustained, suitable
term sales contracts can be procured, or the U.S. government buys uranium from the Company following
the establishment of the proposed U.S. Uranium Reserve. The Company also holds significant uranium
inventories and is evaluating selling all or a portion of these inventories in response to future upside price
volatility.
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 under existing market conditions (i.e., without reliance on current uranium
sales prices). The Company is also seeking new sources of natural monazite sands for its emerging REE
business and continues its support of U.S. government activities to assist the U.S. uranium mining industry,
including the proposed establishment of a U.S. Uranium Reserve.
Extraction and Recovery Activities Overview
During the nine months ended September 30, 2021, the Company did not recover significant quantities of
U3O8. The Company expects to package insignificant quantities of U 3O8 in the year ending December 31,
2021, focusing instead on ramping up and optimizing its mixed RE C arbonate production, while also
enhancing its readiness to quickly resume uranium production at certain of its facilities. All uranium
recovered during 2021 at the Mill is expected to be retained in-circuit at the Mill and not to be packaged
in 2021. 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 seven constructed wellfields. In addition, the Company expects to keep the Alta Mesa
Project and its conventional mining properties on standby during 2021.
The Company expects to recover approximately 400 to 600 tonnes of mixed RE C arbonate at the Mill in
2021, containing approximately 180 to 270 tonnes of TREO, subject to the receipt of sufficient quantities
of natural monazite sands, as it continues to ramp up its RE Carbonate production. These numbers are
reduced from last quarter’s guidance for 2021 of approximately 700 to 1,100 tonnes of mixed RE
Carbonate containing approximately 350 to 550 tonnes of TREO. The reduced RE Carbonate production is