Energy Fuels Announces Q3-2022 Results, Including Continued Robust Balance Sheet and Market- Leading U.S. Uranium & Rare Earth Positions
Energy Fuels Announces Q3-2022 Results, Including Continued Robust Balance Sheet and Market-
Leading U.S. Uranium & Rare Earth Positions
Webcast on November 8, 2022
Lakewood, Colorado, November 4, 2022
Energy Fuels Inc. (NYSE American: UUUU; TSX: EFR) (“Energy Fuels” or the “Company”) today reported
its financial results for the quarter ended September 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 September 30, 2022, the Company had a robust balance sheet with $122.3 million of working
capital, including $77.1 million of cash and cash equivalents, $11.6 million of marketable
securities, $27.3 million of inventory, and no short term (or long term) debt. At current
commodity prices, the Company’s product inventory has a value of $44.1 million.
• During the quarter ended September 30, 2022, the Company incurred a net loss of $9.3 million,
which includes increases in development, permitting and land holding costs and selling, general
and administration costs associated with the Company’s efforts to enhance its business
processes and operational readiness for the current and future growth and activity in our
uranium and rare earth element (“REE”) operations.
• With recent uranium market strength and having secured three long-term uranium contracts
with major U.S. utilities earlier this year, the Company has hired over 20 new employees and is
beginning to perform the work needed to recommence production at one or more of our mines
and ISR facilities, starting as soon as 2023. Until such time when the Company has ramped back
up to commercial uranium production, we can rely on our significant uranium inventories to
fulfill our new contract requirements.
• In June 2022, the U.S. Department of Energy (“ DOE”) issued a Request for Proposals (“ RFP”) to
purchase uranium (“U3O8”) for the new U.S. Uranium Reserve Program. 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 with individual awards ranging from 100,000 pounds to 500,000 pounds.
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 610,000 pounds of U3O8 at the U.S. Converter. The Company has
submitted a bid to sell U3O8 to the Reserve, taking into consideration our long-term contract
commitments and current and expected market conditions. There are no guarantees the DOE
will purchase uranium from the Company under this RFP. Assuming the bid review process is not
extended by DOE, the Company expects the DOE to issue the awards by mid-November 2022,
with deliveries expected to occur by the end of 2022 or early 2023.
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• During the first nine months of 2022, the Company produced approximately 205 tonnes of
mixed partially separated carbonate (“RE Carbonate”), containing approximately 95 tonnes of
total rare earth oxides (“TREO”). Energy Fuels’ partially separated RE Carbonate contains a
higher concentration of valuable NdPr, roughly 32% - 34% NdPr, compared to our previously
produced non-separated RE Concentrate which contained approximately 22% NdPr, and is the
most advanced REE material being produced in the U.S. today. During Q4-2022, the Company
expects to receive approximately 640 tonnes of monazite, which will be processed into partially
separated RE Carbonate during Q4-2022 and Q1-2023.
• 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 on the Bahia
Project was completed at the end of August, at which time the Company advised the sellers that
it intended to proceed with the purchases and was ready to commence closing procedures.
After completion of a number of administrative logistics required in both the U.S. and Brazil, the
mineral transfers were initiated in mid-October, and closing is currently expected to occur in late
2022 or early 2023 upon approval of the Brazilian governmental authorities reviewing the
pending transfers. Upon acquisition, the Company plans to conduct an extensive exploration
program to better define the HMS and monazite resource, including comprehensive sonic
drilling (for a total phase 1 program of 2,250 meters) and geophysical mapping, with the intent
to undertake an Initial Assessment under SK-1300 (U.S.) and a Technical Report under NI 43-101
(Canada) during Q4-2023, to be completed in early Q1-2024.
• 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 our 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. The Company plans to initially install a “light” REE separation circuit within the existing
Mill facilities in the next 12-18 months with the expected ability to produce between 2,500 –
5,000 tonnes TREO (500 – 1,000 tonnes NdPr oxide or oxalates) per year. As this circuit would be
constructed within existing Mill facilities, capital expenditures are expected to be low. The
Company is also proceeding with the design, engineering and permitting of a separate crack and
leach circuit and a second larger “light” and “heavy” separations circuit with capacity in the
order of 10,000 – 15,000 tonnes TREO per year to provide additional REE processing capacity at
the Mill in the coming years.
• During the first nine months of 2022, the Company sold approximately 642,000 pounds of
existing inventory of vanadium (“ V2O5”) (as ferrovanadium, “FeV”), for an average weighted net
price of $13.69 per pound of V 2O5. Vanadium markets have dropped in recent months.
Therefore, the Company has halted sales of its inventory which currently stands at
approximately 987,000 pounds of V2O5. However, the Company expects to resume sales as
markets may improve in the future. 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.
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Mark S. Chalmers, Energy Fuels’ President and CEO, stated:
“Energy Fuels continues to strengthen our U.S. market leading position in uranium and rare earth
elements, which are both critical to the clean energy transition. Energy Fuels has ‘one-of-a-kind’
competencies that are critical to uranium, rare earth elements, medical isotopes, and vanadium
markets; namely our ability to process feedstocks that are naturally radioactive and recover critical
materials needed for the clean energy transition. No other company in the U.S. can do the things Energy
Fuels does. We are committed to advancing each of these initiatives in a disciplined manner, while
working toward profitability and sustained cash flow.
“Uranium is the fuel for carbon-free nuclear energy, and nations around the world are embracing
nuclear, as it provides reliable, carbon-free, baseload electricity. Governments in numerous countries,
including the U.S., are supporting both existing and new nuclear to help solve national security, energy
security, and carbon reduction challenges. We are saddened by the continuing atrocities being
committed by Russian forces in Ukraine, and we stand by our partners in the U.S. nuclear industry and
the U.S. government to shift away from Russian uranium and nuclear fuel imports as soon as practicable.
As previously disclosed, Energy Fuels has signed new long-term uranium sales contracts with major U.S.
nuclear utilities, with sales – and sales revenues – beginning in 2023. We are also excited to announce
that we are making significant investments in a number of our existing mines and production facilities,
including hiring people, with an eye toward resuming large-scale uranium production very soon. We
have been the only U.S. company to continue to produce uranium over the past several years, while
maintaining several of our projects on standby status, which provides an excellent foundation from
which we can build our production in the coming years. We look forward to maintaining our position as
the largest U.S. uranium producer and being a long-term supplier of secure and responsibly sourced U.S.
uranium that is insulated from geopolitical, transport, and other supply chain issues. We are also
pleased to have been able to submit a bid to sell uranium to the U.S. government under the new U.S.
Uranium Reserve, a program that resulted from the Company’s 2018 Section 232 Petition, and we
eagerly await the results of that bidding process.
“We also continue to make spectacular progress on rare earth elements. Indeed, we are pleased to
announce that we plan to install a commercial-scale “light” rare earth separation circuit within the
existing footprint of our White Mesa Mill in Utah that we expect to be operational in the next 12 – 18
months. We are already producing the most advanced rare earth product in the U.S. today, a high-
purity, partially separated mixed rare earth carbonate. We expect to go one step further by producing
up to 500 – 1,000 tonnes of NdPr oxide (or oxalates) per year by late-2023 or early-2024. If successful,
we hope to be the ‘first to market’ in the U.S. for this high-value, advanced material. We anticipate
selling our separated NdPr oxide (or oxalate) to major electric vehicle manufacturers in the U.S. and
Europe, with a goal to significantly increase this capacity in coming years. This should position Energy
Fuels as one of the ‘go to’ suppliers of advanced rare earth materials in the U.S. and one of the first
companies that electric vehicle (EV) and other clean technology manufacturers look to for the raw
materials they need. Ultimately, we plan to install the capacity to produce over 3,000 tonnes of NdPr
oxide, plus 250 tonnes of dysprosium oxide and 100 tonnes of terbium oxide per year, in the next 3-4
years, subject to licensing, commissioning, financing, offtake, market conditions, and sufficient monazite
feedstock.
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“On the monazite feedstock front, we continue to make excellent progress. With regard to our Bahia
Project in Brazil, we continue to move diligently toward closing. The mineral transfers were initiated in
mid-October after a number of administrative logistics required for closing were completed in both the
U.S. and Brazil. Closing is scheduled to occur as soon as the transfers have been approved by the
Brazilian governmental authorities reviewing the pending transfers, which we expect by the end of 2022
or in early 2023. Upon acquisition, the Company plans to conduct an initial phase of exploration drilling
on the properties, totaling 2,250 meters, in order to maintain expected production timelines. In
addition, we continue discussions with a number of monazite suppliers from around the world
interested in partnering with Energy Fuels, and we are confident in our ability to secure monazite supply
deals that ensure a ‘win-win’ for both Energy Fuels and our partners.
“Finally, we continue to make progress on medical isotopes with major players in the space. If we can
successfully recover radioactive isotopes needed for emerging cancer treatments from our existing
process streams, we will have secured yet another opportunity to generate significant cash flows in the
next 5 to 10 years. We also continue to track vanadium markets to determine when to resume sales of
our existing inventories and when to resume production.”
Webcast at 4:00 pm ET on November 8, 2022:
Energy Fuels will be hosting a video webcast on November 8, 2022 at 4:00 pm ET (2:00 pm MT) to
discuss its Q3-2022 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
619525#. The recording will be available until November 22, 2022.
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Selected Summary Financial Information:
Three months ended Nine months ended
September 30, September 30,
$000's, except per share data 2022 2021 2022 2021
Results of Operations:
Total revenues $ 2,933 $ 715 $ 12,337 $ 1,524
Gross profit (loss) 1,404 (13) 4,497 796
Operating loss (13,664) (8,381) (30,584) (25,570)
Net loss attributable to the company (9,167) (7,870) (41,950) (29,562)
Basic and diluted net loss per common share (0.06) (0.05) (0.27) (0.21)
As at As at
$000's September 30, 2022 December 31, 2021
Financial Position:
Working capital $ 122,334 $ 143,190
Property, plant and equipment, net 20,899 21,983
Mineral properties 83,539 83,539
Total assets 279,084 315,446
Total long-term liabilities 14,531 13,805
Financial Discussion:
At September 30, 2022 , the Company had $122.3 million of working capital, including $88.7 million of
cash and cash equivalents and marketable securities and $27.3 million of inventory, including
approximately 692,000 pounds of uranium and 987,000 pounds of high-purity vanadium, both in the
form of immediately marketable product. The current spot price of U3O8, according to TradeTech, is
$52.50 per pound, and the current mid-point spot price of V 2O5, according to Metal Bulletin, is $7.80 per
pound. Based on those spot prices, the Company's uranium and vanadium inventories have a current
market value of $36.3 million and $7.7 million, respectively, totaling $44.0 million. The Company also
holds RE Carbonate inventory with a current value of $0.1 million, for total product inventory of $44.1
million at current commodity prices.
During the quarter ended September 30, 2022 , the Company incurred a net loss of $9.3 million,
compared to a net loss of $8.0 million for the third quarter of 2021, and a net loss of $42.0 million for
the nine months ended September 30, 2022 compared to a net loss of $29.7 million during the first nine
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 $13.7 million for the nine months
ended September 30, 2022.
Operations Update and Outlook for 2022:
Overview
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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
security 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 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. To that end, the Company purchased an
additional 68,552 pounds of U. S. origin U3O8 on the spot market in October 2022. The Company also
continues to evaluate 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 nine months ended September 30, 2022, the
Company also sold 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 pending acquisition of the Bahia
Project) for its emerging REE business, is evaluating the potential to recover radioisotopes for use in the
development of targeted alpha therapy 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 130,000 to 140,000 pounds of uranium, which is an increase
over our previous guidance of 100,000 to 120,000 pounds of uranium in 2022. This increased uranium
production in 2022, combined with other factors, has resulted in a delayed start of our second REE
processing campaign in 2022, which is now expected to commence in November 2022 and carry over
into Q1 2023. As a result, the Company now expects to produce approximately 205 tonnes of partially
separated RE Carbonate in 2022 containing approximately 95 tonnes of high-value partially separated
TREO, with the remaining production from the second 2022 REE processing campaign of approximately
410 tonnes of partially separated RE Carbonate containing approximately 200 tonnes of high-value
partially separated TREO being packaged in and attributable to Q1 2023. The total expected production
from this second 2022 campaign plus production to date in 2022 is equivalent to approximately 831 tons
of non-separated RE Carbonate containing approximately 400 tonnes of non-separated TREO, which falls
within our 2022 guidance of 650-1,000 tons of non-separated RE Carbonate containing 300-650 tonnes
of non-separated TREO, although a portion of that total expected production will carry over into 2023.
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
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vanadium production in 2023 or later years as market conditions may warrant for future sale and to
replace sold inventory.
The Company secured three new long-term sales contracts with U.S. nuclear utilities in May 2022 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 ongoing invasion of Ukraine have increased the
potential for the Company to make uranium sales and procure additional term sales contracts with
utilities at pricing that sustains production and covers corporate overhead. Therefore, existing
inventories may increase from 760,000 pounds of U 3O8 (692,000 pounds as of September 30, 2022 plus
68,552 pounds acquired after quarter end) to 890,000 to 900,000 pounds of U 3O8 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 Program, 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. 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
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 that market conditions improve sufficiently, suitable term sales
contracts can be procured, or the U.S. Uranium Reserve Program is expanded.
Conventional Activities
Conventional Extraction and Recovery Activities
During the nine months ended September 30, 2022 , the Mill did not package any material quantities of
U3O8, focusing instead on developing its REE recovery business. During the nine months ended
September 30, 2022 , the Mill produced approximately 205 tonnes of partially separated RE Carbonate,
containing approximately 95 tonnes of high value partially separated TREO. The Mill recovered small
quantities of uranium during the Quarter, which were retained in circuit. During 2022, the Company
expects to recover 130,000 to 140,000 pounds of uranium at the Mill as finished product. The Company
expects to recover approximately 205 tonnes of partially separated RE Carbonate (equivalent to
approximately 277 tonnes of non-separated RE Carbonate) containing approximately 95 tonnes of high
value partially separated TREO (equivalent to approximately 128 tonnes of non-separated TREO) at the
Mill during 2022. The Company expects to sell all or a portion of its mixed RE Carbonate to Neo
Performance Materials (“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
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supplies of monazite sands, which if successful, would be expected to allow the Company to increase RE
Carbonate production.
In addition to its 760,000 pounds of finished uranium inventories currently located at North American
conversion facilities and at the Mill (692,000 pounds as of September 30, 2022 plus 68,552 pounds
acquired after quarter end) and the 130,000 to 140,000 pounds of U3O8 expected to be produced in
2022, the Company has approximately 170,000 pounds of U 3O8 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 1,060,000 to 1,070,000 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 approximately 987,000 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.
Conventional Standby, Permitting and Evaluation Activities
During the nine months ended September 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 increased its number of employees, and continued carrying out engineering, procurement and
construction management activities, at its Pinyon Plain Project during the Quarter. 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 is now in the process of recommencing mining operations, 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 of these projects serve as important pipeline assets for the
Company’s future conventional production capabilities, as market conditions may warrant.
Uranium Sales
During the three months ended September 30, 2022 , the Company did not enter into any new uranium
sales contracts, having just recently entered into three uranium sale and purchase agreements with
major U.S. utilities in May 2022, 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 submitted an offer to sell a portion of its inventories currently located at the ConverDyn
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