LAKEWOOD, CO, May 8, 2019 /PRNewswire/ - Energy Fuels
Inc. (NYSE American: UUUU; TSX: EFR) ("Energy Fuels" or the
"Company") today reported its financial results for the quarter
ended March 31, 2019. 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 March 31, 2019, the Company
had $47.3 million of working capital,
including $15.3 million in cash,
$17.5 million in marketable
securities, 470,000 pounds of finished uranium goods inventory, and
270,000 pounds of finished vanadium goods inventory.
- The Company successfully achieved commercial rates of vanadium
production at the Company's White Mesa Mill (the "Mill"),
producing the highest purity vanadium in the Mill's history.
Vanadium production totaled 325,000 pounds of
V2O5 for the quarter, and the Company expects
to continue to produce 160,000 to 200,000 pounds of
V2O5 per month over a 16-20 month period,
subject to continued successful recovery and suitable sales
prices.
- Uranium production totaled 20,000 pounds of
U3O8 during the quarter.
- The Company completed no uranium sales during the quarter and
continues to add to uranium inventories. The Company believes that
uranium prices will improve and that it may be able to sell
inventory at higher prices in the future.
- The Company completed 53,000 pounds of vanadium sales into the
steel industry during the quarter, following conversion of the
Company's V2O5 product into ferrovanadium.
The Company is continuing to convert V2O5
into ferrovanadium, while also evaluating the sale of certain
quantities of high-purity V2O5 into specialty
aerospace, chemical, and potentially the vanadium battery
industries.
- The Company continued a limited conventional vanadium
test-mining program at its La Sal Complex. As of March 31, 2019, the Company had mined
approximately 6,000 tons of mineralized material with an average
grade of 1.44% V2O5 and 0.17%
U3O8. While these numbers are not intended to
represent the basis of a new resource estimate, the Company
believes that the new mining methods that were tested are likely to
result in reduced costs, higher grades, and higher value for mined
material due to significantly improved grade control at the mine
site. The Company completed test mining in April 2019 and plans to continue further
operational readiness activities at the La Sal Complex based on
these encouraging results.
- Pursuant to Section 232 of the Trade Expansion Act of 1962 (as
amended), on April 14, 2019, the U.S.
Department of Commerce ("DOC") completed its investigation
into the effects of uranium imports on U.S. national security (the
"Section 232 Investigation") and submitted a report to the
President of the United States
containing their findings and proposed remedy (if any). The Company
is seeking a remedy which would set a quota limiting imports of
uranium into the U.S., effectively reserving 25% of the U.S.
nuclear market for U.S. uranium production. If granted, the quota
would be expected to strengthen uranium prices available to U.S.
producers, thereby reviving an industry crucial to America's
national security and the generation of clean, carbon-free nuclear
energy.
Mark S. Chalmers, Energy
Fuels' President and CEO stated:
"Energy Fuels continued to make important progress on a number
of value-building initiatives in the first quarter of this
year.
"Some of our most noteworthy achievements have resulted from our
continued support of the U.S. Department of Commerce's Section 232
investigation into U.S. uranium imports. On April 14, 2019, our efforts resulted in an
important milestone. On that date, the DOC submitted a report to
the White House containing the results of its investigation, along
with proposed recommendations. President Trump now has up to 90
days from April 14, 2019 to decide
whether and how to act on DOC's recommendations. As the report has
not been made public, the Company has not seen the report. However,
we believe the facts are crystal clear. Increasing levels of
uranium and nuclear fuel imports into the U.S. from our
geopolitical rivals represent a real threat to U.S. national
security and energy security. We are proud to be one of the voices
urging the President to act decisively to protect America on this
key issue, and we will continue to support this initiative in the
months ahead.
"While we await the President's decision on the Section 232
investigation, one of our other key initiatives involves vanadium
production, where we have made enormous strides to re-establish the
Company as the only primary producer of vanadium in North America. In 2018, when vanadium prices
began to rise over the $10 per pound
threshold, we began evaluating the short-term recovery of dissolved
vanadium from the pond solutions at our White Mesa Mill, a source
of solubilized vanadium inventory we had never previously attempted
to recover. Through the innovation, hard work, and dedication of
our skilled milling professionals, we entered production toward the
end of 2018 and began making sales in February 2019. We are actively producing
significant quantities of the highest-purity vanadium in the Mill's
history. Perhaps more importantly, since we have developed an
effective processing methodology, we now have the ability to
quickly and inexpensively adjust production in response to evolving
market conditions. We are closely tracking market conditions,
particularly in China where
significant quantities of vanadium are produced and consumed.
Prices currently sit at approximately $9.10 per pound and, if they remain at current
levels or decline for any extended period of time, we may
temporarily halt vanadium production in order to save this valuable
inventory for higher future prices. Regardless of what happens to
markets, we have created the potential to rapidly generate
significant cash flows during periods of elevated vanadium
prices.
"We also believe we have created significant shareholder value
through the test-mining program at our La Sal Complex. As we have
previously reported, under this program we analyzed mining methods
and technologies never before utilized in the uranium/vanadium
mines of the Colorado Plateau. Our results are extremely
encouraging, potentially changing the paradigm for mining these
deposits by significantly improving grade control. If successful,
this would reduce mining, milling and trucking costs, and
potentially improve Mill recovery for vanadium since the higher the
vanadium grade fed into the Mill, the higher the percentage of
vanadium recovered.
"In short, we believe we are clearly demonstrating that Energy
Fuels is not just another uranium company waiting for prices to
recover. We are committed to realizing value and leveraging our
assets wherever we can. We look forward to providing further
updates on our progress in the months ahead."
Selected Summary Financial Information:
|
|
|
$000, except per
share data
|
Three months
ended
March 31, 2019
|
Three months
ended
March 31, 2018
|
Results of
Operations:
|
|
|
Total
revenues
|
$
|
1,670
|
$
|
1,254
|
Operating
loss
|
(10,122)
|
(10,400)
|
Net loss attributable
to the company
|
(12,127)
|
(10,822)
|
Basic and diluted loss
per share
|
(0.13)
|
(0.14)
|
|
|
|
$000's
|
As at
March 31, 2019
|
As at
December 31, 2018
|
Financial
Position:
|
|
|
Working
capital
|
$
|
47,256
|
$
|
52,000
|
Property, plant and
equipment
|
29,017
|
29,843
|
Mineral
properties
|
83,539
|
83,539
|
Total
assets
|
190,341
|
196,766
|
Total long-term
liabilities
|
47,306
|
43,059
|
Outlook
Overview
Operations and Sales Outlook Overview
The Company plans to extract and/or recover uranium from its
Nichols Ranch Project in 2019. In addition, during 2019 the Company
expects to extract and/or recover vanadium, and potentially
uranium, from pond solutions at its White Mesa Mill, subject to
continued successful recovery and suitable sales prices.
As a result of improved vanadium market conditions in 2018, the
Company began its current campaign in early 2019 to recover between
two and a half (2.5) and four (4) million pounds of vanadium from
existing pond solutions at the White Mesa Mill, which result from
past mineral processing campaigns, over the 16 to 20 month expected
life of the program.
Extraction and Recovery Activities Overview
During the quarter ended March 31,
2019, the Company recovered approximately 20,000 pounds of
U3O8. In the year ending December 31, 2019, the Company expects to recover
approximately 50,000 to 125,000 pounds of
U3O8. The Company also recovered 325,000
pounds of high-purity vanadium pentoxide
("V2O5" or "black flake"),
during the quarter ended March 31,
2019, and expects to continue to recover approximately
160,000-200,000 pounds of V2O5 per month over
the life of the program, subject to continued successful recovery
and depending on the availability of suitable sales prices.
The Company has entered into no uranium sales commitments for
2019 thus far. Therefore, all 2019 uranium production is expected
to be added to existing inventories. All V2O5
production is expected to be sold on the spot market or maintained
in inventory.
Both ISR and conventional uranium extraction and/or recovery are
expected to continue to be maintained at reduced levels until such
time as improvements in uranium market conditions are observed or
suitable sales contracts can be procured. Continued vanadium
production will depend on the continued availability of suitable
vanadium spot prices.
ISR Activities
During the quarter ended March 31,
2019, we extracted and recovered approximately 20,000 pounds
of U3O8 from the Nichols Ranch Project. In
the year ending December 31, 2019,
the Company expects to produce approximately 50,000-70,000 pounds
of U3O8 from Nichols Ranch.
At March 31, 2019, the Nichols
Ranch wellfields had nine header houses extracting uranium. Until
such time as improvement in uranium market conditions is observed
or suitable sales contracts can be procured, the Company intends to
defer development of further header houses at its Nichols Ranch
Project. 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 ISR
Project on standby until such time as improvements in uranium
market conditions are observed or suitable sales contracts can be
procured.
Conventional Activities
Conventional Extraction and Recovery Activities
During the quarter ended March 31,
2019, the White Mesa Mill recovered no uranium due to the
its focus on vanadium recovery.
During the quarter, the Company produced 325,000 pounds of
high-purity V2O5 from its Mill pond return
program. The Company is currently producing at full-production
rates of 160,000 to 200,000 pounds of V2O5
per month. The Company expects to continue to recover
V2O5 at these rates throughout 2019, subject
to continued successful recovery and depending on the availability
of suitable sales prices. If vanadium prices remain at current
levels or decline, the Company may curtail or stop vanadium
production during the year, pending improvements in vanadium
prices. One of the benefits of the Mill's vanadium pond return
program is that it can be stopped and restarted relatively quickly
in response to changes in vanadium market conditions.
In addition, the Company is evaluating whether uranium can be
extracted, concurrent with its vanadium recovery, from the pond
solutions. If the Company determines such recovery is possible, it
expects that up to approximately 55,000 pounds of
U3O8 could potentially be recovered at the
White Mesa Mill in 2019 from those activities.
The Company currently expects that planned vanadium and other
processing activities will keep the Mill in operation through the
end of 2019 and into 2020. The Company is also actively pursuing
opportunities to process new and additional alternate feed sources
and low-grade ore from third parties in connection with various
uranium clean-up requirements. In addition, if improvements in
uranium market conditions are observed as a result of the Section
232 Investigation or otherwise, the Company would expect to be able
to procure suitable long-term sales contracts to keep the Mill
operating over a considerably longer period of time.
Conventional Standby, Permitting and Evaluation Activities
During the quarter ended March 31,
2019, the Company continued its test-mining program
targeting vanadium at the fully-permitted La Sal Complex located on
the Colorado Plateau, which it completed in April 2019, in addition to pursuing enhanced
operational readiness targeting future commercial production. The
goal of the program was to evaluate different mining approaches
that selectively target high-grade vanadium zones, thereby
potentially increasing productivity and mined grades for vanadium
and decreasing mining costs per pound of V2O5
and U3O8. During this program, the Company
refurbished the La Sal and Pandora mines within the La Sal Complex
and extracted approximately 6,000 tons of mineralized material. The
Company expects to continue readiness activities throughout 2019.
In addition, the Company expects to complete a surface and
underground drilling program at the La Sal Complex by mid-2019 in
order to potentially expand the known uranium and/or vanadium
resources available to mine.
Sales
During the quarter ended March 31,
2019, the Company completed no uranium sales. The Company
currently has no remaining contracts and is therefore fully
unhedged to future uranium price increases.
The Company continued V2O5 shipments
during the quarter ended March 31,
2019 with initial quantities being allocated for conversion
to ferrovanadium ("FeV"), which is currently being sold into
spot metallurgical markets. During the quarter, the Company
completed sales of 53,000 pounds of vanadium at an average price of
$20.40 per pound. The Company expects
to continue to sell finished vanadium product as it is produced
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 Company is continuing to produce
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 at the time of production.
The Company also continues to pursue new sources of revenue,
including additional alternate feed materials and other sources of
feed, for the White Mesa Mill.
Trade Petition
In January 2018, the Company
participated in the joint filing of a Petition for Relief under
Section 232 of the Trade Expansion Act of 1962 (as amended) from
Imports of Uranium Products that Threaten National Security (the
"Petition"). On April 14,
2019, the DOC completed the Section 232 Investigation and
submitted a report to the President of the United States containing their findings
and proposed remedy (if any). From April 14,
2019, the President has 90 days to act on the DOC's
recommendations and, if necessary, take action to adjust imports or
pursue other lawful, non-trade-related actions to address the
national security threat. 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 would 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. The
Company intends to continue its support of this action during 2019.
It should be noted, however, that there can be no certainty of the
outcome of the Section 232 Investigation and, therefore, the
outcome of this process is uncertain.
About Energy Fuels: Energy Fuels is a
leading U.S.-based uranium mining company,
supplying U3O8 to major nuclear
utilities. The Company also produces vanadium from certain of its
projects, as market conditions warrant. Its corporate offices are
in Lakewood, Colorado near
Denver, and all of its assets and
employees are in the United
States. Energy Fuels holds three of America's key uranium
production centers: the White Mesa Mill in Utah, the Nichols Ranch in-situ recovery
("ISR") Project in Wyoming, and
the Alta Mesa ISR Project in Texas. The White Mesa Mill is the only
conventional uranium mill operating in the U.S. today, has a
licensed capacity of over 8 million pounds of
U3O8 per year, and has the ability to produce
vanadium when market conditions warrant. The Nichols Ranch ISR
Project is in operation and has a licensed capacity of 2 million
pounds of U3O8 per year. The Alta Mesa ISR
Project is currently on standby. In addition to the above
production facilities, Energy Fuels also has one of the largest NI
43-101 compliant uranium resource portfolios in the U.S. 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 Note Regarding Forward-Looking
Statements: This news release contains certain
"Forward Looking Information" and "Forward Looking Statements"
within the meaning of applicable Canadian and United States securities legislation, which
may include, but is not limited to, statements with respect to:
production and sales forecasts; costs of production; 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 Company's program for the recovery of vanadium
from pond solutions, or the Company's ability to sell any of its
vanadium product at a premium to spot prices or otherwise; the
ability to quickly and inexpensively adjust vanadium production in
response to evolving market conditions; the ability to generate
cash flows during periods of elevated vanadium prices; the expected
results from the vanadium test-mining program; the ability of the
Company to secure any new sources of alternate feed materials or
other processing opportunities 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; any threats to national
security and energy security; and the outcome of the
Department of Commerce Section 232 investigation, including the
nature of the Secretary of Commerce's recommendation to the
President of the United States;
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," "budgets," "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: production and sales forecasts; costs of
production; 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 Company's program for the
recovery of vanadium from pond solutions, or the Company's ability
to sell any of its vanadium product at a premium to spot prices or
otherwise; the ability to quickly and inexpensively adjust vanadium
production in response to evolving market conditions; the ability
to generate cash flows during periods of elevated vanadium prices;
the expected results from the vanadium test-mining program; the
ability of the Company to secure any new sources of alternate feed
materials or other processing opportunities 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; any threats to national
security and energy security; and the outcome of the
Department of Commerce Section 232 investigation, including the
nature of the Secretary of Commerce's recommendation to the
President of the United States;
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 most recently filed
Annual Report on Form 10-K, 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.
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SOURCE Energy Fuels Inc.