Energy Fuels Announces Quarterly Results for the Three Months Ended
March 31, 2014, Including Strengthened Working Capital Position of
$42.27 Million
TORONTO, ONTARIO and LAKEWOOD, COLORADO--(Marketwired - May 13,
2014) - Energy Fuels Inc. (NYSEMKT:UUUU)(TSX:EFR) ("Energy Fuels"
or the "Company") today reported its financial results for the
three months ended March 31, 2014, including a strengthened working
capital position of $42.27 million. The Company's Quarterly
Consolidated Financial Statements, along with Management's
Discussion and Analysis are available through its filings with the
securities regulatory authorities in Canada on the System for
Electronic Document Analysis and Retrieval ("SEDAR") and may be
viewed at www.sedar.com, and in the United States on
the Electronic Document Gathering and Retrieval System ("EDGAR")
which, along with the Company's quarterly report on Form 6-K, may
be viewed at www.sec.gov/edgar.shtml, and on the Company's website
at www.energyfuels.com. Unless noted otherwise, all dollar amounts
are in US dollars.
As previously reported, readers should be advised that the
Company has changed its fiscal year end from September 30 to
December 31 and, accordingly, the quarterly results for the quarter
ended March 31, 2014 are presented with comparable figures for the
three months ended March 31, 2013. The Company also completed a
consolidation of its common shares, effective November 5, 2013, on
the basis of 50 pre-consolidation shares for each
post-consolidation share. All share and per share amounts in this
press release are shown on a post-consolidation basis.
Selected Summary Financial Information:
$000, except per share data |
|
Three months ended March 31, 2014 |
|
Three months ended March 31, 2013 |
|
Results of Operations: |
|
|
|
|
|
|
|
Total revenues |
$ |
11,361 |
|
$ |
34,087 |
|
|
Net income (loss) |
|
(6,342 |
) |
|
(5,904 |
) |
|
Basic and diluted earnings (loss) per share |
|
(0.32 |
) |
|
(0.40 |
) |
|
|
|
|
|
|
As at March 31, |
|
|
As at December 31, |
|
$000's |
|
2014 |
|
|
2013 |
|
Financial Position: |
|
|
|
|
|
|
|
Working capital |
$ |
42,272 |
|
$ |
33,481 |
|
|
Property, plant and equipment |
|
101,025 |
|
|
100,969 |
|
|
Total assets |
|
175,306 |
|
|
176,133 |
|
|
Total long-term liabilities |
|
34,594 |
|
|
31,579 |
|
Financial and Operational Highlights for the Three Months ended
March 31, 2014:
- Increased cash by $9.66 million for the three months ended
March 31, 2014. A portion of the increase in cash was due to the
completion of the replacement of the Company's regulatory bonding
portfolio with equivalent bonds from other surety providers,
releasing to the Company $12.30 million of previously restricted
cash, of which $8.70 million was released during the quarter, and
$3.6 million was released in previous quarters.
- Production at the White Mesa Mill totaled 125,956 pounds of
U3O8, all of which was from alternate feed materials.
- Sold 191,667 pounds of U3O8, pursuant to term contracts at an
average realized price of $58.53 per pound.
- As of March 31, 2014, the Company had working capital of $42.27
million, including cash and cash equivalents of $16.29 million and
385,000 pounds of uranium concentrate inventory.
Corporate Highlights for the Three Months Ended March 31, 2014
and outlook for the year ending December 31, 2014
Though prices in the short and medium term are under pressure
from excess supplies, in the longer term, Energy Fuels believes
prices will improve and intends to continue to strengthen its
position as a leading uranium company in the United States. The
Company's primary objectives for 2014 are to produce and procure
sufficient uranium to fulfill delivery obligations under existing
uranium sales contracts, maintain several mines on standby, and
continue to permit other new projects, thereby positioning the
Company to increase production as market conditions warrant. If
favorable opportunities arise, the Company will also evaluate the
acquisition of additional uranium properties in the United States
and evaluate the sale of certain non-core assets. Environmental and
permit compliance and maintenance activities will continue at the
White Mesa Mill, which is expected to be placed on standby in
August 2014, in order to maintain the facility to be able to
restart mineral processing operations as required.
Energy Fuels continues to believe that the current spot price of
U3O8 is below the economic cost to produce U3O8 from many currently
operating uranium mines around the world, and is well below the
economic cost to develop the new uranium mines which the Company
believes will be required to fuel the projected global growth in
nuclear energy. Spot prices and long-term prices for uranium began
the year at $34.50 and $47.00 per pound, respectively. At the date
of this news release the spot and long-term prices had fallen to
$29.00 and $45.00 per pound, respectively.
Energy Fuels currently has three long-term contracts in place
for the delivery of 800,000 pounds of U3O8 during FY-2014. Under
these contracts, the Company expects to realize an average sales
price of $58.42 per pound U3O8 in FY-2014. This represents a 100%
premium to the current spot price of approximately $29.00 per
pound. These long term contracts provide some protection to the
Company against further reductions in the spot price of uranium
over the next several years, since each contract is currently at
its minimum floor price. The Company has contracted to purchase
U3O8 in the spot market for sale into one of these contracts,
which, along with Energy Fuels' significant U3O8 inventories and
scheduled production, provides the Company with the operational
flexibility to meet its contract delivery requirements during 2014
and beyond. The Company's inventories and spot purchases also
reduce the Company's need for near-term U3O8 production. This will
allow the Company to place its White Mesa Mill on standby beginning
in August 2014. While on standby, the Company will continue to
accept alternate feed materials and maintain the White Mesa Mill in
a state of readiness to be able to restart mineral processing
activities when a production decision is made.
Energy Fuels' ability to deliver purchased U3O8 into one of its
term contracts creates value by allowing the Company to purchase
U3O8 at prices lower than its production cost and to realize
significant margins between the spot purchase price and the
contract sale price. This allows the Company to extend the life of
its mines into the future by preserving its U3O8 resources,
reducing operational risk associated with production operations,
and enabling the Company to implement additional significant
cost-cutting measures.
At the same time, Energy Fuels will continue to position itself
to realize the economic benefits of anticipated improvements in the
price of U3O8, through select development and permitting
expenditures and care and maintenance activities. Energy Fuels has
a number of projects with large U3O8 resources, including the Henry
Mountains Complex and the Roca Honda Project, which, in a higher
U3O8 price environment, have the potential to provide large,
base-load quantities of uranium resources to the White Mesa Mill
and the opportunity to produce U3O8 with greater operating
efficiency. In addition, the Company has extensive U3O8 resources
in Wyoming which it expects to develop into a second major
production center, as market conditions warrant. The Company
intends to continue permitting activities on these projects during
FY-2014.
As outlined below, Energy Fuels provides the following updated
outlook for FY-2014. The Company intends to closely monitor actual
and forecasted U3O8 prices, and may change operating plans under
actual or expected market conditions, as necessary. Accordingly,
the outlook provided herein may differ materially from actual
results:
- FY-2014 Uranium Sales: The Company forecasts FY-2014 sales to
be approximately 800,000 pounds of U3O8, of which 191,667 pounds
were sold during the three months ended March 31, 2014. All 800,000
lbs. of forecasted sales will be delivered into the Company's three
existing long-term contracts. Energy Fuels expects to realize an
average sales price of $58.42 per pound of U3O8 during FY-2014.
This average realized price per pound will not be subject to any
decrease resulting from declines in future U3O8 spot and/or term
prices as each contract is at the minimum floor price. If uranium
spot and/or long-term prices rise to certain levels during FY-2014,
the price mechanisms contained within the Company's contracts
provide the opportunity to capture a significant portion of such
price improvements over the remaining terms of the contracts. In
addition, the Company has contracted for the purchase of 300,000
pounds of uranium in the spot market for sale into one
contract.
- Production for FY-2014: The Company expects to produce
approximately 650,000 pounds of U3O8 during FY-2014, from both
conventional ore (approximately 450,000 pounds) and alternate feed
materials (approximately 200,000 pounds). In the three months ended
March 31, 2014, 125,956 pounds were produced from alternate feed
materials. Conventional ore processing is expected to resume in
late May 2014 to process all ore mined through the middle of
FY-2014 from the Arizona 1 and Pinenut mines, at which point both
conventional ore and alternate feed processing is expected to be
placed on standby by the end of August 2014.
- FY-2014 Mining Activities: Mining at the Pinenut mine is
expected to continue into the first quarter of 2015 at which point
the economic uranium resources are expected to be depleted, subject
to the potential discovery of additional resources from planned
underground exploration. Mining at the Arizona 1 mine was placed on
standby in the first quarter of FY-2014 due to the depletion of its
currently economic resources. The Company has completed additional
exploration drilling in the Arizona 1 mine and believes that
additional mineralization exists. However, at current market
conditions such additional mineralization is not economic and,
accordingly, the mine has been placed on standby.
- FY-2014 Project Permitting: During FY-2014, the Company expects
permitting activities to total approximately $1.5 million,
primarily at the Sheep Mountain, Roca Honda and Henry Mountains
projects.
- Spot market production and sales: The Company does not expect
to produce any material for sale into the current spot market, nor
does it intend to sell any of its current inventories into the spot
market. As discussed above the Company has contracted for the
purchase of 300,000 pounds of U3O8 during the year ending December
31, 2014 for sale into one of its existing long-term
contracts.
Stephen P. Antony, P.E., President & CEO of Energy
Fuels, is a Qualified Person as defined by National
Instrument 43-101 and has reviewed and approved the technical
disclosure contained in this news release.
About Energy Fuels: Energy Fuels is currently
America's largest conventional uranium producer, supplying
approximately 25% of the uranium produced in the U.S. in 2013.
Energy Fuels operates the White Mesa Mill, which is the only
conventional uranium mill currently operating in the U.S. The mill
is capable of processing 2,000 tons per day of uranium ore and has
a licensed capacity of over 8 million lbs. of
U3O8. Energy Fuels has projects
located in a number of Western U.S. states, including a producing
mine, mines on standby, and mineral properties in various stages of
permitting and development. The Company's common shares are listed
on the Toronto Stock Exchange under the trading symbol "EFR" and on
the NYSEMKT under the trading symbol "UUUU".
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 the
future financial or operating performance of the Company and its
projects and with respect to the market outlook, including: the
quality of its projects; the Company's ability to resume mining and
increase uranium production as market conditions warrant; the
Company's ability to or success in moving its larger scale projects
forward as expected; the Company's expectations as to long term
fundamentals in the market and price projections; the Company's
expectations that prices will need to rise to support new mines
needed to meet increasing demand; the Company's ability to maintain
its White Mesa Mill and other assets in a state of readiness to be
able to restart operations as required; the ability of the Company
to develop a strategy that could result in a second production
center in Wyoming; production and sales forecasts; and expected
permitting and other expenditures. 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 estimating production, forecasting future price
levels necessary to support production, and the Company's ability
to increase production in response to any increases in commodity
prices; risks inherent in the Company's and industry's forecasts or
predictions of future uranium prices; risks of delays in obtaining
permits and licenses that could impact expected production levels
or increases in expected production levels; government and third
party actions with respect to supplies of secondary sources of
uranium; fluctuations or changes in the market prices of uranium
and the other factors described under the caption "Risk Factors" in
the Company's Annual Information Form dated March 26, 2014, which
is available for review on SEDAR at www.sedar.com,
and in its Form 40-F, which is available for review on EDGAR at
www.sec.gov/edgar.shtml. 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.
Energy Fuels Inc.Curtis MooreInvestor Relations(303) 974-2140 or
Toll free:
1-888-864-2125investorinfo@energyfuels.comwww.energyfuels.com
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