Energy Fuels Completes Sale of Alta Mesa Property to enCore Energy for Total Gross Proceeds of $120 Million Sale provides Energy Fuels with significant non-dilutive funding for expansion of industry-leading US uranium production and completion of ‘Phase 1’ rare earth separation circuit.
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Energy Fuels Completes Sale of Alta Mesa Property to enCore Energy for
Total Gross Proceeds of $120 Million
Sale provides Energy Fuels with significant non-dilutive funding for expansion of industry-leading US
uranium production and completion of ‘Phase 1’ rare earth separation circuit.
Lakewood, CO – (February 15, 2023) – Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) ("Energy Fuels"
or the “Company”) is pleased to announce that it has completed the sale (the “Closing”) of three (3) wholly-
owned subsidiaries that together hold Energy Fuels’ Alta Mesa ISR Project (“ Alta Mesa”) to enCore Energy
Corp. (“enCore”) for total consideration of $120 million (the “ Transaction”). Unless otherwise indicated, all
references to dollar amounts in this press release are references to US$.
The consideration is comprised of:
1. $60 million cash at or prior to Closing; and
2. $60 million in a secured convertible note (the “ Note”), payable in two (2) years from the Closing,
bearing annual interest of eight percent (8%). The Note will be convertible at Energy Fuels’ election
into enCore common shares at a conversion price of $2.9103 per share, being a 20% premium to the
10-day volume-weighted average price of enCore shares ending the day before the Closing. enCore
was recently listed on the NYSE American and also trades on the TSX Venture Exchange. The Note is
guaranteed by enCore and is fully secured by Alta Mesa. Unless a block trade or similar distribution
is executed by Energy Fuels to sell enCore shares received upon conversion of the Note, Energy Fuels
will be limited to converting the Note into a maximum of $10 million principal amount per thirty (30)
day period.
In addition, enCore is required to replace the existing reclamation bonds for the Alta Mesa project shortly
after the Closing, which will result in Energy Fuels receiv ing an additional $3.6 million cash as a return of
collateral from those bonds. The Transaction also reduces the Company’s holding costs related to Alta Mesa
by approximately $2 million per year.
The Transaction provides Energy Fuels with significant additional cash and working capital, en abling the
Company to ramp -up its US industry -leading uranium and rare earth element (“ REE”) production , while
avoiding dilution to shareholders. In addition, t he Note provides Energy Fuels with significant exposure to
uranium market upside through potential conversion into enCore common shares.
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Boosting Industry-Leading US Uranium Production:
Energy Fuels plans to invest a portion of the proceeds from the Transaction into increasing its US industry-
leading uranium production. At the current time, the Company’s White Mesa Mill (the “Mill”) is the only US
uranium facility producing material quant ities of uranium, having produced 16 2,000 pounds of U3O8 in Q4-
2022. The Company is also preparing four (4) of its conventional uranium and uranium/vanadium mines to
be ready to resume uranium ore production , including significant workforce expansion and performing
needed rehabilitation of surface and underground infrastructure . The exact timing for resumption of ore
production from each of these projects will be subject to current and future uranium sales and inventory
requirements.
Energy Fuels’ 2022 uranium production of 162,000 pounds exceeded its previously announced guidance of
130,000 to 140,000 pounds of U3O8. In addition, over the past several months, the Company has invested in
additional uranium inventories, having purchased approximately 301,000 pounds of US -origin U 3O8 at a
weighted average price of $50.08 per pound. In addition, in January 2023, the Company sold 300,000 pounds
of U3O8 to the US government for the establishment of the strategic Uranium Reserve, earning total gross
proceeds of $18.5 million, or $61.57 per pound.
As a result of 2022 production, recent purchases, and the sale to the US government, Energy Fuels currently
holds approximately 847,000 pounds of U3O8 in inventory at a book value of $29.19 per pound (worth about
$42.5 million at the current weekly uranium spot price as reported by TradeTech). In combination with future
uranium production, the Company expects to utilize this inventory to fulfill its delivery obligations under its
supply contracts with US nuclear utilities . Energy Fuels is also actively seeking additional uranium sales
contracts with nuclear utilities at increasingly higher uranium prices bolstered by improving market
fundamentals, including the global energy transition toward less carbon intensive sources of energy,
including nuclear, efforts to move away from Russian uranium and nuclear fuel supply , and other factors
related to transportation and security of supply. As a result of the Company’s strategic moves in the uranium
space, the Company believes it is creating significant flexibility by growing and managing its existing
inventories and preparing several of its US assets for near-term production.
Investing in Production of Advanced Rare Earth Materials in the US:
In a February 13, 2023 news release, the Company announced that it had achieved several milestones related
to its expanding REE supply chain, including completion of the acquisition of the Bahia Project in Brazil and
continued progress on procuring natural monazite sand concentrate. Today, the Company is producing the
most advanced REE material in the US and is currently performing modifications and enhancements to the
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existing solvent extraction (“SX”) circuits at the Mill (“Phase 1”) that are expected to enable Energy Fuels to
annually produce up to 5,000 metric tons (“ MT”) of total REE oxides (“ TREO”), including up to 1,000 MT of
neodymium-praseodymium (“NdPr”) oxide (or oxalate), subject to receipt of sufficient REE-bearing monazite
sand supply and successful commissioning. The “Phase 1” circuit will be in the same SX building where
uranium and vanadium is produced at the Mill. If these milestones are achieved, Energy Fuels believes it will
be the ‘first to market’ among US companies with commercial quantities of separated NdPr available to
electric vehicle (“ EV”), renewable energy, and other companies for offtake , while fully maintaining our
uranium and vanadium recovery capabilities. Energy Fuels’ “Phase 1” “light” separation circuit is expected to
produce commercial quantities of separated NdPr oxide (or oxalate) by later this year or early 2024, followed
by planned further enhancements to expand NdPr production capability (“ Phase 2 ”) and to produce
separated “heavy” REEs, including Dy, Tb, and potentially other REE materials, in the future (“Phase 3”) from
monazite and potentially other REE-bearing process streams.
Mark S. Chalmers, President and CEO of Energy Fuels stated: “Energy Fuels’ sale of the Alta Mesa project for
$120 million of total consideration is highly strategic for a variety of reasons. When c ombined with our
already strong balance sheet, the proceeds from this sale are expected to fully fund our current uranium ,
vanadium and rare earth business plans through approximately 2024 without the dilution to shareholders
one might normally expect, nor depletion of working capital. On the uranium front, this sale provides Energy
Fuels with the ability to make the focused investments in infrastructure and human capital required to
resume production at our lowest-cost and nearest -term uranium mines and facilities. W e believe Energy
Fuels will be among the quickest to market with significant new US uranium production and retain our
position as the leading US uranium producer for many years to come.
“Of the four (4) conventional mines we are currently preparing for production, three (3) produce both
uranium and vanadium. Vanadium prices are currently on the move, having risen from $7.50 per pound of
V2O5 in October 2022 to $10.80 per pound today. Vanadium is important to our uranium business, as strong
vanadium prices contribute to the economics of these mines, making them a more attractive option for us as
we evaluate which mines to place back into production. Due to today’s strong vanadium markets, we are also
evaluating the sale of more of our existing vanadium inventory which currently sits at 987,000 pounds of
V2O5.
“Even though uranium is Energy Fuels’ core business, we expect to invest some of the proceeds from the sale
of Alta Mesa into our rapidly expanding rare earth s business. We have started the modifications and
enhancements at our White Mesa Mill in Utah that are expected to produce commercial quantities (500 –
1,000 MT) of NdPr oxide (or oxalate) by later this year or early in 2024 , while maintaining our uranium and
vanadium capabilities. NdPr oxide is a high-demand advanced material needed in the EV, renewable energy
and defense industries. We are not aware of any other US company that will get this far down the US rare
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earth supply chain as quickly as Energy Fuels. It is also virtually unheard of anywhere else in the world to
produce uranium, vanadi um and separated rare earths in the same building, which demonstrates the
creativity and resourcefulness of the team at the Mill.
“We also expect to invest some of the proceeds from Alta Mesa into advancing our Bahia Project in Brazil,
where we plan to continue our comprehensive sonic drill program in 2023 to better define and delineate the
titanium (ilmenite and rutile), zirconium (zircon), and of course rare earths (monazite) resources. We believe
the Bahia Project has the potential to produce 3,000 to 10,000 MT per year of monazite concentrate for our
Mill as soon as 2025 and for decades to come. Bahia, combined with other Company-owned and third-party
monazite sources, is expected to supply the feed for ‘Phase 1’ and ‘Phase 2’ ‘light’ rare earth separation, and
‘Phase 3’ ‘heavy’ rare earth separation at the Mill.
“We see our rapidly developing REE business as highly complementary to our primary uranium business. We
can utilize our existing facilities to recover uranium and REEs from monazite, which increases our uranium
production and also allows us to generate margins from multiple commodities . No other US uranium
producer has the ability to complement its primary uranium business in this manner.
“Finally, the $60 million secured convertible note Energy Fuels received from enCore at closing provides the
Company with additional uranium market upside through the potential conversion of the Note into enCore
Energy shares at an attractive conversion price.”
CONTACT:
ENERGY FUELS
Curtis Moore – VP of Marketing & Corporate Development
(303) 974-2154;
CONTACT:
ENERGY FUELS
Curtis Moore – SVP of Marketing & Corporate Development
(303) 974-2154;
ABOUT ENERGY FUELS
Energy Fuels is a leading US -based critical minerals company. The Company 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
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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 recov ery 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 ce nters: 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. The Nichols Ranch ISR Project is on standby and has a licensed capacity of 2 million
pounds of U3O8 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 larg est 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.
CAUTIONARY STATEMENTS REGARDING FORWARD LOOKING STATEMENTS
This news release contains "forward-looking information" within the meaning of applicable securities laws in
the United States and Canada. Forward- looking information may relate to future events or future
performance of Energy Fuels. All statements in this release, other than statements of historical facts, with
respect to Energy Fuels’ objectives and goals, as well as statements with respect to its beliefs, plans,
objectives, expectations, anticipations, estimates, and intentions, are forward- looking information. Specific
forward-looking statements in this discussion include, but are not limited to, the following: any expectation
that the Company will receive an additional $3.6 million cash as a return of collateral from the Alta Mesa
reclamation bonds; any expectation that the conversion price of the Note may be attractive or that the
Company will convert all or any portion of the Note; any expectation that the proceeds from the sale of Alta
Mesa will fully fund the Company’s current uranium, vanadium and REE business plans through approximately
2024 without dilution to shareholders or depletion of working capital; any expectation that the Company will
invest a portion of the proceeds of the Transaction into its uranium production; any expectation that the
Company will successfully prepare any of its mines to resume ore production or that any of its mines will enter
into production in the near term or at all; any expectation that the Company will utilize any of its inventories
to fulfill delivery obligations under its existing supply contracts or will be successful in obtaining any additional
supply contracts; any expectation as to the quantities of uranium and heavy minerals, including monazite ,
NdPr, Dy and Tb contained in the Bahia Project; any expectation as to the potential annual supply of monazite
sands from the Bahia Project to the Mill, the contained MT of TREO per year, or the number of years or decades
of such potential supply; any expectation as to the timing of mining at the Bahia Project; any expectation that
the Company will complete its Phase 1, Phase 2 and/or Phase 3 separation facilities on the time frames
indicated, if at all; any expectation as to the expected throughput rates, production capability, and REEs to be
produced; any expectation that the Company will be the first to market among US companies with commercial
quantities of separated NdPr available to EV, renewable energy and other companies for offtake; any
expectation that the Company will retain its position as the leading US uranium producer for many years to
come; any expectations as to vanadium or other commodity prices; any expectation that the Company will
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sell any of existing inventory at attractive prices or at all ; any expectation that the Company will be able to
utilize the Mill to generate margins from recovering uranium and REEs from monazite sands and other ores
independent of the price of uranium ; any expectation that the Company’s REE business may become a
profitable stand-alone business for the Company, or provide commodity price diversification for the Company;
and any expectation that the Mill is a unique and highly strategic asset in the US . Often, but not always,
forward-looking information can be identified by the us e of words such as "plans", "expects", "is expected",
"budget", "scheduled", "estimates", "continues", "forecasts", "projects", "predicts", "intends", "anticipates"
or "believes", or variations of, or the negatives of, such words and phrases, or state that certain actions, events
or results "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved. This information
involves known and unknown risks, uncertainties and other factors that may cause actual results or events to
differ materially from those anticipated in such forward-looking information. Factors that could cause actual
results to differ materially from those anticipated in these forward-looking statements include risks associated
with: technical difficulties; mining or pr ocessing difficulties and upsets; licensing, permitting and regulatory
delays; litigation risks; competition from others; political actions or instability in foreign countries; and market
factors, including future demand for and prices realized from the sale of uranium, vanadium and REEs.
Forward-looking statements contained herein are made as of the date of this news release, and Energy Fuels
disclaims, other than as required by law, any obligation to update any forward- looking statements whether
as a result of new information, results, future events, circumstances, or if management’s estimates or opinions
should change, or otherwise. There can be no assurance that forward- looking statements will prove to be
accurate, as actual results and future events could differ materially from those anticipated in such statements.
Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements. Energy Fuels
assumes no obligation to update the information in this communication, except as otherwise required by law.