Energy Fuels Issues Letter to Shareholders
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Energy Fuels Issues Letter to Shareholders
Denver, Colorado – March 20, 2018
Energy Fuels Inc. (NYSE American: UUUU; TSX: EFR) (“Energy Fuels” or the “Company”), a
leading producer of uranium in the United States, is pleased to present the following Letter to
Shareholders from President and Chief Executive Officer (“CEO”) Mark S. Chalmers:
Dear Fellow Shareholders:
As you know, I was recently appointed President and Chief Executive Officer of Energy Fuels. I
am excited and grateful for the opportunity to lead this company, and on behalf of the Board of
Directors and my Management Team, I thank you for your continued support of Energy Fuels
and our vision of becoming a major global supplier of uranium.
I have a light‐hearted phrase that I occasionally repeat around our headquarters here in
Lakewood, Colorado that I think is a fitting theme for my first Letter to Shareholders: “Energy
Fuels might be small, but we’re mighty!” When you look at Energy Fuels’ production
capabilities, asset portfolio, and our involvement in broad national policy discussions in the
United States, and compare that to the relatively small size of our company compared to the
largest producers of uranium in the world – both in terms of our staff size and our market
capitalization – you will see what I mean.
In short, we are not afraid to make big things happen for the purpose of building value for our
shareholders. As of late, we have become deeply involved in national policy debates about U.S.
national security. We are working with the U.S. government to be a part of the solution for
major environmental clean‐ups. We are an important voice in discussions about public land and
environmental policy issues. We are creatively leveraging our assets and capabilities to
generate other sources of revenue. And, we are the largest producer of uranium in the United
States. Not bad for a company of our size!
Make no mistake about it. Our primary focus remains large‐scale, profitable uranium
production, and we pursue all of our activities in support of this focus. We continue to maintain
our industry‐leading uranium production capabilities, including licensed and permitted projects
that can resume and increase production quickly after a production decision is driven by higher
uranium prices. Things are happening in global uranium markets, namely major production
cuts, that we believe will rationalize this market and, with it, the return of much higher uranium
prices … eventually. Unfortunately, that has been the defining – and frustrating – characteristic
of the uranium market over the past few years. We all see the positive supply and demand
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fundamentals. We see the production cuts, the policies to address climate change and air
pollution, and the slow and steady global growth of nuclear energy. However, no one knows
when these fundamentals will spawn higher prices, and the recovery has thus far eluded us.
Therefore, in order to preserve our substantial uranium production capabilities, while
minimizing shareholder dilution, we continually seek to capitalize on other opportunities
isolated from the low global uranium market prices, including new sources of alternate feed
materials and fee processing arrangements, land cleanup work, and vanadium recovery. None
of our peers share in this quantum of other optionality. In addition, we recently participated in
the filing of a 232 Petition with the federal government.
First, we are always “beating the bushes” to find new sources of alternate feed materials and
fee processing arrangements for our White Mesa Mill. In 2017, we re‐processed about 950,000
pounds of off‐spec uranium concentrate for a third party, earning fees of about $6 million.
Today, we are talking to several additional parties about new business for 2018 and beyond. In
fact, we currently project that the White Mesa Mill will be cash‐flow positive for 2018, as it was
in 2017 when it was the single largest producer of uranium in the entire U.S.
Land cleanup work also presents an excellent long‐term opportunity for Energy Fuels’ and our
White Mesa Mill. During the early years of the Cold War, hundreds of small, government‐
sponsored uranium mines operated in the U.S. Unfortunately, many of these sites were never
properly remediated, as there was little or no regulation at the time. Today, the U.S.
Environmental Protection Agency (“EPA”) is spearheading the effort to clean‐up these sites,
many of which are located on Navajo Nation land. The White Mesa Mill is located just a short
distance away from the northern edge of the Navajo Nation, so it is the perfect facility to cost‐
effectively recycle low‐grade ore from these sites and produce uranium that can be used for the
generation of clean electricity. In addition, there are numerous other companies with
reclamation obligations at abandoned uranium mine sites in the region, and the White Mesa
Mill is the most rational facility to handle this material. For providing these services, we would
earn processing fees, as well as recover uranium.
Then, there’s vanadium. Vanadium is a mineral used in high‐strength steel, titanium and other
alloys and in batteries used in renewable energy systems. Vanadium prices have risen by more
than 400% over the past 24 months. And, the White Mesa Mill – in addition to being the only
conventional uranium mill operating in the U.S. – is also the last operating facility left in the U.S.
with the near‐term ability to resume recovery of vanadium. Indeed, according to a February 16,
2018 announcement, both uranium and vanadium are on a draft federal government list of
strategic minerals that are “critical to the economic and national security of the United States.”
Our mill last produced vanadium (as V2O5) in 2013, and during its 38 year operating history, it
has actually produced over 45 million pounds of vanadium – or over $500 million at today’s
vanadium prices. We have a number of mines in Utah and Colorado that contain large
quantities of high‐grade vanadium resources, including the Whirlwind Mine and the La Sal
Complex where we recently received government approvals for an expansion. We are also
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evaluating the potential to recover vanadium from pond water at the mill and processing some
vanadium alternate feed sources similar to our uranium alternate feed program.
These are all exciting opportunities. However, we are not building our core business around
them. We view them as “bridges” to increased primary production from our uranium mines as
market conditions improve. We can respond immediately to positive market signals from a
number of different mines, including our Canyon Mine, Nichols Ranch ISR Project, and Alta
Mesa ISR Project located in Arizona, Wyoming and Texas, respectively.
With regard to our primary uranium production focus, we recently filed a Section 232 Petition
with the U.S. Department of Commerce (“DOC”), along with fellow U.S. uranium producer, Ur‐
Energy. Like you, we’ve all been frustrated by the slow, uneven pace of the uranium market
recovery. The Petition describes how uranium and nuclear fuel from state‐owned and state‐
subsidized enterprises in Russia, Kazakhstan, Uzbekistan, and China potentially represent a
threat to U.S. national security. The Petition seeks a remedy which will set a quota to limit
imports of uranium into the U.S., effectively reserving 25% of the U.S. nuclear market for U.S.
uranium production. Additionally, the Petition suggests implementation of a requirement for
U.S. federal utilities and agencies to buy U.S. uranium in accordance with the President's Buy
American Policy. The remedies, if granted, would be expected to strengthen the U.S. uranium
mining industry, bolster national defense, and improve supply diversification for U.S. utilities
and their customers.
Energy Fuels has about 11.5 million pounds of licensed capacity at our three production
facilities. We have a number of mines that are fully‐permitted, developed and ready to go into
production, and we have other mines that are very close to being permitted for production.
Energy Fuels continues to have an asset portfolio that is unmatched in the U.S. uranium
industry in terms of production scalability, licensed and permitted facilities, and in‐ground
resources. We stand ready for the opportunity to deploy our significant capabilities to bolster
U.S. energy security and national security.
Lastly, for those that do not know me personally, I have worked in the U.S. and international
uranium mining sectors for over 40 years. I started my career here in the U.S. as an
underground uranium miner. Later, I branched out into uranium production in Australia,
Namibia, Malawi, and even Kazakhstan. I returned to the U.S. nearly two years ago to join
Energy Fuels; a company I believe represents the best uranium producer opportunity in the
world. How can I have so much confidence in Energy Fuels? Because I have seen the world of
uranium production, and it is obvious to me that Energy Fuels’ combination of unique high‐
quality production facilities, high‐grade and low‐cost resources, and – most importantly – our
people, is truly unsurpassed.
In closing, 2018 should be a key year in the growth trajectory of Energy Fuels, and we have
multiple major opportunities in front of us, any one of which will allow us to take major strides
toward achieving our goals. As I mentioned earlier, today we are “small but mighty.” Hopefully
this time next year, I can report back that we are “larger and mightier” than we are today!
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Respectfully,
Mark S. Chalmers
President, CEO and Shareholder in Energy Fuels
About Energy Fuels: Energy Fuels is a leading integrated US‐based uranium mining company, supplying U3O8 to
major nuclear utilities. Its corporate offices are in Denver, Colorado, and all of its assets and employees are in the
western United States. Energy Fuels holds three of America’s key uranium production centers, the White Mesa Mill
in Utah, the Nichols Ranch Processing Facility in Wyoming, and the Alta Mesa Project in Texas. The White Mesa Mill
is the only conventional uranium mill operating in the U.S. today and has a licensed capacity of over 8 million
pounds of U3O8 per year. The Nichols Ranch Processing Facility is an ISR production center with a licensed capacity
of 2 million pounds of U3O8 per year. Alta Mesa is an ISR production center currently on care and maintenance.
Energy Fuels also has the largest NI 43‐101 compliant uranium resource portfolio in the U.S. among producers, and
uranium mining projects located in a number of Western U.S. states, including one producing ISR project, mines on
standby, and mineral properties in various stages of permitting and development. The Company also produces
vanadium as a by‐product of its uranium production from certain of its mines on the Colorado Plateau, as market
conditions warrant. 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 STATEMENT REGARDING FORWARD‐LOOKING STATEMENTS
This news release contains certain “Forward Looking Information” and “Forward Looking Statements” within the
meaning of applicable securities legislation, which may include, but is not limited to, statements with respect to:
scalability, and the Company’s ability and readiness to re‐start or expand any of its existing projects to respond to
any improvements in uranium market conditions; any expectations regarding vanadium opportunities; the ability of
the Company to secure any new sources of alternate feed materials or other processing opportunities at the White
Mesa Mill; any expectations as to cash flows at the White Mesa Mill; expected timelines for the permitting and
development of projects; the Company’s expectations as to longer term fundamentals in the market and price
projections; expectations to become or maintain its position as a leading uranium company in the United States;
and the outcome of the Department of Commerce Section 232 investigation, including whether or not the Secretary
of Commerce will make a recommendation to the President and the nature of the recommendation; whether or not
the President will act on the recommendation and, if so, the nature of the action and remedy; and the expected
benefits of the proposed remedies. Generally, these forward‐looking statements can be identified by the use of
forward‐looking terminology such as “plans”, “expects” “does not expect”, “is expected”, “is likely”, “budget”
“scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, “does not anticipate”, or “believes”, or variations of
such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be
taken”, “occur”, “be achieved” or “have the potential to”. All statements, other than statements of historical fact,
herein are considered to be forward‐looking statements. Forward‐looking statements involve known and unknown
risks, uncertainties and other factors which may cause the actual results, performance or achievements of the
Company to be materially different from any future results, performance or achievements express or implied by the
forward‐looking statements. Factors that could cause actual results to differ materially from those anticipated in
these forward‐looking statements include risks associated with: scalability, and the Company’s ability and
readiness to re‐start or expand any of its existing projects to respond to any improvements in uranium market
conditions; any expectations regarding vanadium opportunities; the ability of the Company to secure any new
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sources of alternate feed materials or other processing opportunities at the White Mesa Mill; any expectations as
to cash flows at the White Mesa Mill; expected timelines for the permitting and development of projects; the
Company’s expectations as to longer term fundamentals in the market and price projections; expectations to
become or maintain its position as a leading uranium company in the United States; and the outcome of the
Department of Commerce Section 232 investigation, including whether or not the Secretary of Commerce will make
a recommendation to the President and the nature of the recommendation; whether or not the President will act
on the recommendation and, if so, the nature of the action and remedy; the expected benefits of the proposed
remedies; and the other factors described under the caption “Risk Factors” in the Company’s Annual Report on
Form 10‐K dated March 9, 2018, which is available for review on EDGAR at www.sec.gov/edgar.shtml, on SEDAR at
www.sedar.com, and on the Company’s website at www.energyfuels.com. Forward‐looking statements contained
herein are made as of the date of this news release, and the Company 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. The Company assumes no obligation to update the information in this
communication, except as otherwise required by law.
Cautionary note to United States investors concerning resources. This news release contains certain disclosure
that has been prepared in accordance with the requirements of Canadian securities laws, which differ from the
requirements of U.S. securities laws. Unless otherwise indicated, all resources referred to in this news release
have been estimated in accordance with NI 43‐101 and the Canadian Institute of Mining, Metallurgy and
Petroleum (“CIM”) classification system. Canadian standards, including NI 43‐101, differ significantly from the
requirements of U.S. securities laws, and resource information contained in this news release may not be
comparable to similar information disclosed by companies reporting only under U.S. standards. In particular,
the term “resource” does not equate to the term “reserve” under SEC Industry Guide 7. United States investors
are cautioned not to assume that all or any resources will ever be converted into mineral reserves. Investors
are cautioned not to assume that all or any part of a resource is economically or legally minable. Energy
Fuels does not hold any reserves as that term is defined by SEC Industry Guide 7. Please refer to the section
entitled “Cautionary Note to United States Investors Concerning Disclosure of Mineral Resources” in the
Company’s Annual Report on Form 10‐K dated March 9, 2018 for further details.
Energy Fuels Inc.
Curtis Moore, VP – Marketing and Corporate Development
(303) 974‐2140 or Toll free: (888) 864‐2125
www.energyfuels.com