LAKEWOOD, CO, May 1, 2020
/CNW/ - Energy Fuels Inc. (NYSE American: UUUU; TSX: EFR)
("Energy Fuels" or the "Company") today reported its financial
results for the quarter ended March 31,
2020. 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, 2020, the Company
had $26.0 million in cash and
marketable securities plus $22.4
million of concentrate inventory, including 520,000 pounds
of uranium valued on our balance sheet at $23.13 per pound and 1,675,000 pounds of vanadium
valued on our balance sheet at $5.37
per pound, both in the form of immediately marketable product. As
of May 1, 2020, the spot price of
uranium was $33.75 per pound and the
mid-point spot price of vanadium was $6.88 per pound, which places a current market
value on our concentrate inventories of approximately $29.1 million.
- On February 20, 2020, the Company
strengthened its balance sheet by completing a bought-deal
financing for net proceeds of $15.1
million and raised approximately $4.0
million on the Company's At the Market ("ATM")
program in the first quarter of 2020.
- Uranium production totaled approximately 5,900 pounds of
U3O8 for the quarter, as the Company wound
down operations from existing wellfields at its Nichols Ranch
project.
- The Company suspended vanadium production at the end of 2019
and has substantial quantities of dissolved vanadium remaining in
the Company's tailings management system for future recovery as
market conditions warrant.
- No material uranium or vanadium sales were completed during the
quarter, and the Company is strategically maintaining its uranium
inventory for future sales in anticipation of higher uranium
prices, potentially as a result of the creation of a new U.S.
uranium reserve (as discussed below) or other U.S. government
support, or due to generally improved uranium market
fundamentals.
- The Company had an operating loss of $7.8 million during Q1-2020.
- On February 10, 2020, the
President announced a proposed FY-2021 budget (the "President's
Budget"), which includes a request for $150 million per year for the next 10 years to
create a U.S. uranium reserve. The Company views this news as being
very positive for established U.S. uranium producers such as Energy
Fuels.
- On April 23, 2020, the U.S.
Nuclear Fuel Working Group ("NFWG") released its "Strategy
to Restore American Nuclear Energy Leadership" (the
"Report"). In the report, the U.S. government commits to
reviving and strengthening the U.S. uranium mining industry. The
Report provides a number of policy recommendations, including
direct government purchases, supporting Department of Commerce
efforts to extend the Russian Suspension Agreement ("RSA")
to prevent dumping of Russian uranium in the U.S. (and "the
consideration of further lowering the cap on Russian imports under
future RSA terms"), enabling the U.S. Nuclear Regulatory Commission
to deny imports of fabricated nuclear fuel from Russia; and streamlining regulatory reform and
land access for uranium.
- On April 13, 2020, the Company
announced its entry into the U.S. rare earth elements
("REE") market. The Company believes its fully licensed and
constructed White Mesa Mill ("Mill"), which is the only
uranium mill operating in the U.S. today, can play a key role in
bringing the REE supply chain back to the U.S. Many REE ores (and
other streams) contain recoverable quantities of uranium and
thorium, and the Mill has a 40-year history of responsibly
processing ores for uranium and other metals.
Mark S. Chalmers, Energy
Fuels' President and CEO, stated:
"Energy Fuels continued to be the clear leader in the U.S.
uranium space during Q1-2020. We received excellent news from the
U.S. government in February when President Trump published his
Budget for fiscal year 2021, which seeks appropriations totaling
$1.5 billion over the next 10 years
to create a new strategic U.S. uranium reserve. Then, on
April 23, 2020, the long-awaited
report of the Nuclear Fuel Working Group was released, which
demonstrated the U.S. government's strong commitment to restoring
U.S. nuclear energy leadership and reviving and strengthening the
U.S. uranium mining industry. Energy Fuels has taken the leading
role in obtaining the U.S. government's support for U.S. uranium
miners, spending more time and money on this initiative than any
other U.S. uranium miner. And, this makes sense, since we have been
the largest U.S. uranium producer since 2017, our assets have
produced 34% of all U.S. uranium since 2006, and we have more
proven facilities, more permitted resources, and more production
capacity than any other U.S. miner. We believe that Energy Fuels
should be a major beneficiary of any U.S. government support for
the industry. We look forward to working with the U.S. government
to ensure their initiatives to support domestic uranium production
are successful and taxpayer dollars are spent wisely.
"If you have followed Energy Fuels' story for any length of
time, you also know that we are entrepreneurial, and we are always
seeking to leverage our assets and expertise toward other business
opportunities related to our core uranium business, including
vanadium production, alternate feed materials processing, and land
cleanup work. We recently announced our proposed entry into the
rare earth elements market, and we believe our White Mesa Mill, the
only conventional uranium mill operating in the U.S. today, can
potentially be used to process certain REE ores and other streams.
Over the past year, we have been approached by a number of REE
companies and the U.S. government, inquiring about the capabilities
of the White Mesa Mill. Many REE ore streams contain recoverable
quantities of uranium, and, from health, safety, and environmental
protection standpoints, they are very similar to the uranium ore
streams the Mill has handled responsibly over the past 40 years. In
addition, one of the main bottlenecks in U.S. REE production is the
availability of a processing facility capable of handling the
uranium and thorium, since permitting and constructing a new
facility can take many years, be victim to major activist
opposition, and cost hundreds of millions of dollars. Because the
Mill is already licensed and constructed, many of these hurdles
have already been cleared. We believe the White Mesa Mill may be an
ideal location to process rare earth elements, and are engaging
certain consultants, including ANSTO, to help us evaluate the
opportunity. Most importantly, if any company has REE ores or other
streams they wish to process, Energy Fuels is 'open for
business.'
"Another major way Energy Fuels is differentiated from our peers
is in the strength of our balance sheet. We ended Q1-2020 with over
$48.4 million of cash, marketable
securities, and uranium and vanadium inventories. It should be
further noted that both uranium and vanadium prices have improved
significantly since the end of the quarter, thereby further
increasing the value of our inventories. At the end of 2020, we
anticipate having nearly 700,000 pounds of uranium in inventory,
which we hope to be able to sell to the U.S. government, or into
otherwise improving uranium markets, at prices much higher than
those we see today. No other U.S. uranium miner has Energy Fuels'
balance sheet or the leverage to improving prices of our
inventories."
Selected Summary Financial Information:
|
|
|
$000, except per
share data
|
Three months
ended
March 31, 2020
|
Three months
ended
March 31, 2019
|
Results of
Operations:
|
|
|
Total
revenues
|
$
|
393
|
$
|
1,670
|
Gross profit
(loss)
|
(685)
|
(422)
|
Net income (loss)
attributable to the company
|
(5,657)
|
(12,127)
|
Basic and diluted loss
per share
|
(0.05)
|
(0.13)
|
|
|
|
$000's
|
As at March
31,
2020
|
As at December
31,
2019
|
Financial
Position:
|
|
|
Working
capital
|
$
|
35,009
|
$
|
20,534
|
Property, plant and
equipment
|
25,395
|
26,203
|
Mineral
properties
|
83,539
|
83,539
|
Total assets
|
184,928
|
175,720
|
Total long-term
liabilities
|
21,561
|
22,475
|
Outlook
Overview
Operations and Sales Outlook Overview
In response to the President's FY-2021 Budget request and/or
implementation of policy recommendations contained in the U.S.
Nuclear Fuel Working Group ("NFWG") report, the Company is
evaluating activities aimed towards increasing uranium production
at all or some of its production facilities, including the
currently operating White Mesa Mill, the recently operating Nichols
Ranch ISR Facility, and the Alta Mesa ISR Facility, La Sal Complex
and Canyon Mine, which are all currently on standby, as market
conditions may warrant. The Company may commence such activities
prior to confirmation of Congressional appropriations or the
definition of all implementation details, as market conditions may
warrant, recognizing that there can be no guarantee that the
required appropriations will be forthcoming or that the
implementation details will be satisfactory, and that the outcome
of this process is therefore uncertain. Alternatively, the Company
may defer commencing any such activities until further
clarification on implementation of the President's Budget is
published and/or Congressional appropriations are obtained, or
market conditions otherwise warrant. No decisions on any
project-specific actions to be taken in response to the President's
Budget have been made at this time.
Subject to any actions the Company may take in response to the
President's Budget, the Company plans to extract and/or recover
limited amounts of uranium from its Nichols Ranch Project in 2020,
which was placed on standby in the first quarter of 2020. In
addition, during 2020 the Company expects to recover uranium at the
White Mesa Mill from in-circuit uranium inventories extracted from
the recent vanadium Pond Return campaign, and from Alternate Feed
Materials. The vanadium Pond Return campaign conducted in 2019 was
brought to a close in early 2020.
Subject to any actions the Company may take in response to the
President's Budget or improving market conditions, both ISR and
conventional uranium recovery is expected to be maintained at
reduced levels, as a result of current uranium market
conditions.
The Company is also seeking new sources of revenue, including
new sources of Alternate Feed Materials and new fee processing
opportunities at the White Mesa Mill that can be processed under
existing market conditions (i.e., without reliance on current
uranium sales prices), and is evaluating opportunities to
potentially recover REEs at the White Mesa Mill. The Company will
also continue its support of U.S. governmental activities to
support the U.S. uranium mining industry and will evaluate
additional acquisition and disposition opportunities that may
arise.
Extraction and Recovery Activities Overview
During the three months ended March 31,
2020, the Company recovered approximately 5,900 pounds of
U3O8, all of which were for the account of
the Company. In the year ending December 31, 2020, the Company
expects to recover a quantity of uranium within its previously
published guidance of 125,000 to 175,000 pounds of
U3O8. The Company also recovered
approximately 67,000 pounds of high-purity vanadium pentoxide
("V2O5" or "black flake") during the
three months ended March 31, 2020
from its vanadium Pond Return campaign, which was suspended during
the quarter.
The Company has strategically opted not to enter into any
uranium sales commitments for 2020. Therefore, subject to any
actions the Company may take in response to the President's Budget
and general market conditions, all 2020 uranium production is
expected to be added to existing inventories. All
V2O5 production is expected to be sold on the
spot market if prices rise significantly above current levels, but
otherwise maintained in inventory.
ISR Activities
During the three months ended March 31,
2020, we extracted and recovered approximately 5,900 pounds
of U3O8 from the Nichols Ranch Project, which
was placed on standby during the quarter.
As of March 31, 2020, the Nichols Ranch wellfields had nine
header houses that had extracted uranium, which are now depleted.
Subject to any actions the Company may take in response to the
President's Budget, until such time as improvement in uranium
market conditions is observed or suitable sales contracts can be
procured, the Company expects 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.
Subject to any actions the Company may take in response to the
President's Budget, the Company expects to continue to keep the
Alta Mesa 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 three months ended March 31,
2020, the Company produced approximately 67,000 pounds of
high-purity V2O5 from its Mill Pond Return
program and no uranium. During 2020, the Company expects to recover
approximately 120,000 to 170,000 pounds of
U3O8 at the White Mesa Mill from in-circuit
uranium inventories extracted from the recent vanadium Pond Return
campaign and from Alternate Feed Materials. In addition, there
remains an estimated 1.5-3 million pounds of solubilized
recoverable V2O5 inventory remaining in the
tailings management system awaiting future recovery as market
conditions may warrant.
The White Mesa Mill has historically operated on a campaign
basis whereby uranium and/or vanadium recovery is scheduled as mill
feed, cash needs, contract requirements, and/or market conditions
may warrant. The Company currently expects that planned uranium
production from Alternate Feed Materials and receipt of
uranium-bearing materials from mine cleanup activities will keep
the Mill in operation through all or most of 2020. The Company is
also actively pursuing opportunities to process new and additional
Alternate Feed Material sources and new and additional low-grade
ore from third parties in connection with various uranium clean-up
requirements. Successful results from these activities would allow
the Mill to extend the current campaign through 2020 and beyond. In
addition, if improvements in uranium market conditions are
observed, or conventional mines are ramped up in response to the
President's Budget and/or recommendations of the NFWG, the Company
would expect to be able to keep the Mill operating over a
considerably longer period of time.
Conventional Standby, Permitting and Evaluation Activities
During the quarter ended March 31, 2020, standby and
environmental compliance activities occurred at the Canyon Project.
Subject to any actions the Company may take in response to the
President's Budget, recommendations of the NFWG, and general market
conditions, during 2020, the Company plans to continue carrying out
engineering, metallurgical testing, procurement and construction
management activities at its Canyon Project.
The Company is selectively advancing certain permits at its
other major conventional uranium projects, such as the Roca Honda
Project, a large, high-grade conventional project in New Mexico. The Company will also maintain
required permits at the Company's conventional projects, including
the Sheep Mountain Project and the Daneros Project. In addition,
the Company will continue to evaluate the Bullfrog Property at its
Henry Mountains 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
warrant.
Sales
During the three months ended March 31,
2020, the Company had no uranium sales. The Company
currently has no uranium sales contracts and is therefore fully
unhedged to future uranium price increases.
During the three months ended March 31,
2020, the Company did not sell any vanadium. The Company
expects to sell finished vanadium product when justified 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 plans to
sell to a diverse group of customers in order to maximize revenues
and profits. The vanadium produced in the recent Pond Return
campaign was 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 and general market conditions.
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, in addition to evaluating the
potential to recover REEs at the Mill.
Continued Efforts to Minimize Costs
The Company will continue to seek ways to minimize the costs of
maintaining its critical properties in a state of readiness for
potential improvements in market conditions, and is evaluating
whether additional cost-cutting measures may be warranted at this
time as a result of recent declines in general market
conditions.
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.
Cautionary Notes: 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; 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 or in response to the
President's Budget; any expectations regarding vanadium
opportunities, the Company's program for the recovery of vanadium
from pond solutions, remaining dissolved vanadium in tailings
facility solutions, future production opportunities, or the
Company's ability to sell any of its vanadium product at a premium
to spot prices or otherwise; 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 expectation as to how the President's Budget
will be implemented and the timing of implementation; any
expectation with respect to timelines to production; any
expectation that the Company may be able to sell its uranium and
vanadium inventories at potentially higher prices in the future;
any expectation that Congress will make the requested
appropriations; any expectations as to the Company's ability to
implement any additional cost-cutting measures; any expectation
that the Company may have the opportunity to process
uranium-bearing ores for the recovery of REEs, at all or on
commercial terms; and any expectation that the Company will be able
to recover REEs and/or uranium from such ores on a commercial
basis. 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 or in response to the President's Budget; any
expectations regarding vanadium opportunities, the Company's
program for the recovery of vanadium from pond solutions, remaining
dissolved vanadium in tailings facility solutions, future
production opportunities, or the Company's ability to sell any of
its vanadium product at a premium to spot prices or otherwise; 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 expectation as to how
the President's Budget will be implemented and the timing of
implementation; any expectation with respect to timelines to
production; any expectation that the Company may be able to sell
its uranium and vanadium inventories at potentially higher prices
in the future; any expectation that Congress will make the
requested appropriations; any expectations as to the Company's
ability to implement any additional cost-cutting measures; any
expectation that the Company may have the opportunity to process
uranium-bearing ores for the recovery of REEs, at all or on
commercial terms; any expectation that the Company will be able to
recover REEs and/or uranium from such ores on a commercial
basis; 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.
It should further be noted that the President's proposed
budgeted activities are subject to appropriation by the Congress of
the United States, and there can
be no certainty of the outcome of this budget or the NFWG's
recommendations. Therefore, the outcome of this process
remains uncertain.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/energy-fuels-announces-q1-2020-results-301051330.html
SOURCE Energy Fuels Inc.