LAKEWOOD, Colo., July 30, 2021 /PRNewswire/ - Energy Fuels
Inc. (NYSE American: UUUU) (TSX: EFR) ("Energy Fuels"
or the "Company") today reported its financial results for
the quarter ended June 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 June 30, 2021, the Company had
$98.8 million of working capital,
including $79.4 million of cash and
marketable securities and $29.2
million of inventory. At current commodity prices, the
Company's inventory has a value of $39.1
million.
- During the quarter ended June 30,
2021, the Company incurred a net loss of $10.8 million, which included a non-cash
mark-to-market increase in warrant liabilities during the quarter
of $3.6 million resulting from a
significant increase in the Company's share price.
- With several existing uranium mines on standby and significant
existing inventories of Company-produced, U.S.-origin uranium, the
Company continues to be ready to supply uranium into improved
global markets and the proposed U.S. Uranium Reserve once it is
established by the U.S. government.
- During the first half of 2021, the Company began ramping up to
commercial-scale production of a mixed rare earth element
("REE") carbonate ("RE Carbonate"), as a complement
to its uranium business. In July
2021, Energy Fuels commenced deliveries of its RE Carbonate
to a separation facility in Europe.
- The Company has entered into a definitive agreement to sell a
package of Energy Fuels' non-core conventional uranium projects
located in Utah and Colorado to International Consolidated Uranium
Inc. ("CUR"). Based on CUR's current share price, exchange
rates and assuming the closing and full performance of the
agreement, the current proforma value of this divestment is
approximately US$24 million.
- The Company has 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, as a complement
to its uranium and RE Carbonate businesses, for use in the
production of medical isotopes for emerging targeted alpha therapy
("TAT") cancer therapeutics.
Mark S. Chalmers, Energy
Fuels' President and CEO, stated:
"Energy Fuels achieved another significant milestone in
restoring U.S. rare earth supply chains when we recently announced
the successful production of rare earth carbonate from U.S.-sourced
natural monazite sand at our White Mesa Mill. We are also very
excited about our recently announced Strategic Alliance with
RadTran, which has 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.
"We also announced the sale of several non-core conventional
uranium assets to International Consolidated Uranium. These are
licensed uranium assets, with excellent production track-records.
But we don't think markets value these assets appropriately within
our portfolio. With this accretive disposition, we hope to unlock
value in these excellent assets for our shareholders.
"The outlook for uranium also continues to improve, vanadium
markets are strengthening and REE prices continue to exhibit
strength. With three fully licensed uranium processing centers --
the White Mesa Mill and the Nichols Ranch and Alta Mesa in situ recovery facilities -- the
largest NI 43-101 resource portfolio among U.S. uranium producers,
and almost 700,000 pounds of U.S.-produced
U3O8 in inventory, the Company remains
well-positioned to benefit from a strengthening uranium market and
the proposed U.S. Uranium Reserve once it is established by the
U.S. government. But what I find most exciting about all this is
that not only do we have excellent optionality and exposure to
improved uranium markets, we are also leveraging our existing
uranium assets to give the Company and our shareholders exposure to
vanadium, REEs and potentially medical isotope markets, all as
complements to our primary uranium business. Each of these
complementary businesses could develop into a significant business
for the Company in its own right and bodes well for our quickly
developing "Critical Minerals Hub" in the U.S."
Webcast on Tuesday, August 3,
2021 at 4:00 pm ET
(2:00 pm MT):
Energy Fuels will be hosting a video webcast Tuesday, August 3, 2021 at 4:00 pm ET (2:00 pm
MT) to discuss its Q2-2021 financial results, rare earth
production and other corporate initiatives. To join the webcast and
access the presentation and the viewer-controlled webcast slides,
please click on the link below:
Energy Fuels Q2-2021 Results Webcast
If you would like to participate in the webcast and ask
questions, please dial in to (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 (888) 390-0541 (toll free in the U.S. and Canada) and by entering the code 679255#. The
recording will be available until August 17,
2021.
Selected Summary Financial Information:
|
|
|
$000's, except per
share data
|
Six months ended
June 30,
2021
|
Six months ended
June 30,
2020
|
|
|
|
Total
revenues
|
$
|
809
|
$
|
788
|
Gross profit
(loss)
|
809
|
(718)
|
Operating
Loss
|
(17,189)
|
(14,276)
|
Net income (loss)
attributable to the company
|
(21,692)1
|
(13,844)
|
Basic and diluted loss
per share
|
(0.15)1
|
(0.12)
|
|
|
|
$000's
|
As at June 30,
2021
|
As at December 31,
2020
|
|
|
|
Financial
Position:
|
|
|
Working
capital
|
$
|
98,773
|
$
|
40,158
|
Property, plant and
equipment, net
|
22,819
|
23,621
|
Mineral properties,
net
|
83,539
|
83,539
|
Total
assets
|
242,180
|
183,236
|
Total long-term
liabilities
|
13,852
|
13,376
|
1.
|
Net loss and loss per
share for the six months ending June 30, 2021
include a non-cash
mark-to-market increase in warrant liabilities of
$7.05 million, as a result of a significant increase
in the Company's share price during that
period. Net loss and loss per share for the six months ending
June 30, 2020 include a non-cash mark-to-market decrease in warrant
liabilities of $0.1 million, as a result of an insignificant
decrease in the Company's share price during that
period.
|
Financial Discussion:
At June 30, 2021, the Company had $98.8 million of working capital, including
$79.4 million of cash and marketable
securities and $29.2 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
U3O8, according to TradeTech, is $32.50 per pound (up 7% in 2021), and the
current mid-point spot price of V2O5,
according to Metal Bulletin, is $9.88 per pound (up 83% in 2021). Based on
those spot prices, the Company's uranium and vanadium inventories
have a current market value of $22.5
million and $16.5 million,
respectively, totaling $39.0
million.
During the quarter ended June 30,
2021, the Company incurred a net loss of $10.8 million, compared to a net loss of
$8.2 million for the second quarter
of 2020, and a net loss of $21.7
million year-to-date compared to $13.8 million during the first six 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 White Mesa Mill in Utah (the "Mill")
and a non-cash mark-to-market
increase in warrant liabilities during the quarter
of $3.6 million and $7.1 million year to date, resulting from
an increase in the Company's share price.
Commencement of Rare Earth Carbonate Deliveries in
2021:
On July 7, 2021, the Company and
Neo Performance Materials Inc. ("Neo") jointly announced
that the first container (approximately 20 tonnes of product) of an
expected first run of 15 containers of RE Carbonate was
successfully produced by Energy Fuels at the Mill and is en
route to Neo's Silmet rare earth separations facility in
Estonia, creating a new
United States-to-Europe rare earth supply chain.
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. Natural monazite sand is currently recovered
as a low-cost byproduct of heavy mineral sand ("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 we have developed the
ability to unlock the value of this domestic resource over the past
20+ years of recycling numerous feeds for the recovery of uranium.
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.
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
Energy Fuels 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, sustainability and
human rights, 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 products.
Sale of Non-Core Conventional Assets to International
Consolidated Uranium Inc:
On July 15, 2021, the Company and
International Consolidated Uranium Inc. ("CUR") jointly
announced the signing of a definitive asset purchase agreement
under which CUR will acquire a portfolio of Energy Fuels' 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. In addition, at closing the Company
and CUR will enter into toll-milling and operating agreements with
respect to the properties. The consideration payable by CUR to
Energy Fuels includes US$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 deferred 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 also cutting standby costs, earning management fees, and
potentially realizing toll milling fees in the future. Based on the
current CUR share price, exchange rates and assuming the closing
and full performance of the agreement, the proforma value of this
divestment is approximately US$24 million.
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
targeted alpha therapy ("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
and others to produce Pb-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
The outlook for uranium continues to improve, as demand
continues to outpace supplies and uranium juniors and financial
intermediaries enter the market to purchase uranium and build
inventories. The weekly spot price for uranium has increased 4%
from $31.25 to $32.50 per pound during the quarter and 7% from
$30.40 to $32.50 during the first six months of 2021. The
spot price of uranium is currently at $32.50 per pound as of July 23, 2021. Energy Fuels holds 691,000 pounds
of U.S.-origin 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.
Vanadium markets are also strengthening. An improving global
economy, coupled with political unrest in South Africa and other factors, has caused
vanadium prices to rise 83% this year, from $5.40 per pound as of December 25, 2020 to $8.75 per pound as of June
25, 2021 to $9.88 per pound as
of July 30, 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 large 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 continue to be strong, with the price of
NdPr increasing 48% year to date from $78.50/kg on January 4,
2021 to $116.00/kg on
July 30, 2021 and 118% from
$53.3/kg on July 27, 2020 to date. The Company's sales price
for its RE Carbonate 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 June 30, 2021
Overview
Although the outlook for uranium continues to improve, uranium
prices have not risen enough to date to justify uranium production
at the Company's mines and ISR facilities at this time. As a
result, uranium recovery is expected to be maintained at reduced
levels at current uranium price levels, until such time when market
conditions improve sufficiently or the U.S. government buys uranium
from the Company following the establishment of the proposed U.S.
Uranium Reserve.
The Company will 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 rare earth business, and continues its support of U.S.
governmental 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 six months ended June 30,
2021, the Company did not recover significant quantities of
U3O8, and expects to package insignificant
quantities of U3O8 for the remainder of 2021,
focusing instead on ramping up and optimizing its RE Carbonate
production. This is a reduction from previous guidance of 30,000 to
60,000 pounds of uranium production in 2021. 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 existing 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 700 to 1,100 tonnes
of RE Carbonate at the Mill in 2021, containing approximately 350
to 550 tonnes of total rare earth oxides ("TREO"), subject
to receipt of sufficient quantities of monazite. This is a
reduction from previous guidance of 2,000 to 3,000 tons (1,814 to
2,721 tonnes) of RE Carbonate, containing approximately 1,000 to
1,600 tons (907 to 1,451 tonnes) of TREO, in 2021, due to what the
Company expects to be a short-term delay in supply of monazite
sands to the Mill under the Company's existing supply agreement.
The Company expects to produce no vanadium during the 2021
year.
The Company has strategically opted not to enter into any
uranium sales commitments for 2021. Therefore, subject to the
proposed establishment of a U.S. Uranium Reserve and general market
conditions, existing inventories are expected to remain unchanged
at approximately 691,000 pounds of U3O8 at
year-end. All V2O5 inventory is expected to
be sold on the spot market if prices rise sufficiently above
current levels, but otherwise maintained in inventory. The Company
expects to sell all or a portion of its RE Carbonate to Neo
Performance materials or other global separation facilities and/or
to stockpile it for future separation at the Mill or elsewhere.
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, and is ramping up to commercial-scale
production of RE Carbonate in 2021. 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 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, as well as RE Carbonate
from various uranium-bearing ores. The Nichols Ranch ISR Project is
currently on standby and has a licensed capacity of 2 million
pounds of U3O8 per year. The Alta Mesa ISR
Project is also 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 United
States and Canadian securities legislation, which may
include, but are not limited to, statements with respect to:
production and sales forecasts; costs of production; any
expectation that the Company will continue to be ready to supply
uranium into the proposed U.S. Uranium Reserve once it is
established; scalability, and the Company's ability and readiness
to re-start, expand or deploy any of its existing projects or
capacity to respond to any improvements in uranium market
conditions or in response to the proposed Uranium Reserve; any
expectation regarding any remaining dissolved vanadium in the White
Mesa Mill's tailings facility solutions; any expectation that the
Company's recently developed mining techniques can increase
production and lower costs when vanadium mining resumes in the
future; 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; any
expectation that the Company will maintain its position as a
leading uranium company in the United
States; any expectation that the proposed Uranium Reserve
will be implemented and if implemented the manner in which it will
be implemented and the timing of implementation; any
expectation with respect to timelines to production; any
expectation that the Mill will be successful in producing RE
Carbonate on a commercial basis; any expectation that Neo will be
successful in separating the Mill's RE Carbonate on a commercial
basis; any expectation that Energy Fuels will be successful in
developing U.S. separation, or other value-added U.S. REE
production capabilities at the Mill, or otherwise; any expectation
that the Company and Neo will be successful in jointly developing a
fully integrated U.S.-European REE supply chain; any expectation
that the Company will be successful in
building a low-cost, fully integrated
U.S. rare earth supply chain that meets the
highest global standards for environmental protection,
sustainability and human rights; any expectation with
respect to the future demand for REEs; any expectation with respect
to the quantities of monazite ore to be acquired by Energy Fuels,
the quantities of RE Carbonate to be produced by the Mill or the
quantities of contained TREO in the Mill's RE Carbonate; any
expectation that the Company's evaluation of thorium and
potentially radium recovery at the Mill will be successful; any
expectation that the potential recovery of medical isotopes from
any thorium and radium recovered at the Mill will be feasible; any
expectation that any thorium, radium and other isotopes can be
recovered at the Mill and sold on a commercial basis; and any
expectation that the Company's agreement to sell certain of its
non-core properties to CUR will complete as contemplated or at all,
or as to the proforma value of this divestment to the
Company. 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: commodity
prices and price fluctuations; processing and mining difficulties,
upsets and delays; permitting and licensing requirements and
delays; changes to regulatory requirements; legal challenges; the
availability of sources of alternate feed materials and other feed
sources for the Mill; competition from other producers; public
opinion; government and political actions; the appropriations for
the proposed Uranium Reserve not being allocated to that program
and the Uranium Reserve not being implemented; the manner in which
the proposed Uranium Reserve, if established, will be implemented;
the Company not being successful in selling any uranium into the
proposed Uranium Reserve at acceptable quantities or prices, or at
all; available supplies of monazite sands; the ability of the Mill
to produce RE Carbonate to meet commercial specifications on a
commercial scale at acceptable costs; the ability of Neo to
separate the RE Carbonate produced by the Mill to meet commercial
specifications on a commercial scale at acceptable costs; market
factors, including future demand for REEs; the ability of the Mill
to be able to separate thorium and potentially radium at reasonable
costs or at all; the ability of the Company and RadTran to be able
to recover other isotopes from thorium and radium recovered at the
Mill at reasonable costs or at all; market prices and demand for
medical isotopes; 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.