LAKEWOOD, CO, May 6, 2016 /CNW/ - Energy Fuels
Inc. (NYSE MKT:UUUU; TSX:EFR) ("Energy Fuels" or the
"Company"), today reported its financial results for the
quarter ended March 31, 2016.
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 US dollars.
Financial Highlights for the Quarter-Ended March 31, 2016:
- $18.0 million of total revenue
was realized by the Company.
- Gross Profit of $5.9 million from
mining and milling operations was realized by the Company,
representing a gross profit margin of approximately 33%.
- 350,000 pounds of U3O8 sales were
completed by the Company at an average realized price of
$51.36 per pound. 300,000 pounds of
sales were pursuant to long-term contracts at an average price of
$54.19 per pound and 50,000 pounds of
sales were sold to a utility at the then-prevailing spot price of
$34.40 per pound.
- At March 31, 2016, the Company
had $37.5 million of working capital,
including cash and cash equivalents of $16.5
million and approximately 225,000 pounds of uranium
concentrate inventory. In addition, at March
31, 2016, the Company had $8.3
million receivable pursuant to a uranium sale made on
March 15, 2016. The Company
subsequently received the cash for this receivable in April 2016.
- A net loss of $8.8 million was
realized by the Company, primarily as a result of $7.4 million of investments we are making in
future production, including completion of the elution circuit at
Nichols Ranch, continued shaft-sinking and resource evaluation at
the Canyon Project, and construction of new leach tanks at the
White Mesa Mill.
- 85,000 pounds of U3O8 were recovered by
the Company, all of which came from the Nichols Ranch Project.
Development Highlights for the Quarter-Ended March 31, 2016:
- Shaft-sinking operations continue at the Canyon Project. The
shaft, which is expected to be constructed to a total depth of
1,470 feet, is at a depth of approximately 900 feet as of
April 30, 2016. Underground drilling
to further evaluate the Canyon deposit is expected to occur in
mid-2016, when the shaft reaches a depth of approximately 1,000
feet.
- The Company completed construction and licensing of the elution
circuit at the Nichols Ranch Project in February 2016. Energy Fuels now has 100%
self-contained ISR processing capabilities, which is expected to
significantly lower the Company's future costs of production on a
per pound basis by avoiding 3rd party toll processing
fees.
Acquisition Highlights for the Quarter-Ended March 31, 2016:
- On March 7, 2016, the Company
announced that it had entered into a definitive agreement ("DA") to
acquire Mesteña Uranium, LLC ("Mesteña"), a well-known,
closely-held uranium supplier that operates the Alta Mesa ISR
Project in South Texas. Under the
terms of the DA, Energy Fuels will issue 4,551,284 common shares of
the Company to the current owners of Mesteña. The closing of the
transaction is expected to occur in May
2016, subject to the receipt of all applicable regulatory
and stock exchange approvals and the satisfaction of certain other
conditions to closing. The acquisition of Mesteña is expected to
expand Energy Fuels' lower-cost uranium recovery operations.
Mesteña is currently on standby and will resume uranium recovery
operations upon sufficient improvement in uranium prices.
- On March 4, 2016, the Company
announced that it had entered into a Letter of Intent to acquire
the 40% interest in the Roca Honda Project held by Sumitomo
Corporation. The Company and Sumitomo are working towards
finalizing a definitive agreement for this transaction, subject to
stock exchange and final Sumitomo approvals by mid-May, and an
expected closing by the end of May
2016. Upon completion of this acquisition, the Company will
own 100% of the Roca Honda Project, which is one of the largest and
highest-grade uranium projects in the U.S. and in an advanced stage
of permitting.
Financing Highlights for the Quarter-Ended March 31, 2016:
- On March 14, 2016, the Company
closed an equity financing, under which it raised net proceeds of
$10.98 million, after commissions and
estimated expenses of the offering, through the issuance of
5,031,250 units, with each unit consisting of one common share and
one half of one common share purchase warrant, at a price of
$2.40 per unit. Each warrant
will be exercisable for three years following the closing date and
will entitle the holder thereof to acquire one common share of the
Company upon exercise at an exercise price of $3.20 per share.
Stephen P. Antony, Energy
Fuels' President and CEO stated: "While the price of
uranium has disappointed so far in 2016, Energy Fuels continues to
pursue efforts aimed at lowering operating and other costs, while
also advancing our long-term ability to ramp-up mineral extraction
activities in the future. We continue to adjust our business
plan to appropriately respond to uranium prices that are near
multi-year lows today, but expected to rise significantly over the
long-term. As such, we have made the decision to save
significant cash in 2016 by planning to delay previously announced
capital expenditures, including wellfield expansion at Nichols
Ranch. While this decision is expected to lower production at
Nichols Ranch by 50,000 pounds this year, White Mesa Mill uranium
recoveries are now expected to be higher than originally
forecast. Therefore, we are maintaining our previous guidance
of 950,000 total pounds of uranium recovery in 2016.
"We continue to pursue shaft-sinking and resource evaluation
activities at our Canyon Project in Arizona, and later in the year, we hope to
announce positive results at this low-cost project. Finally,
we expect to lower our portfolio-wide cost of production upon the
closing of our pending acquisition of Mesteña Uranium, and its ISR
production in South Texas. While long-term uranium market
pricing is currently lower than the pricing contained in our four
existing contracts, upon only a modest uplift in current long-term
prices, Mesteña will provide Energy Fuels with the potential to
sign uranium sales contracts which meet targeted operating margins
for the Company. As a result, Mesteña is a key acquisition
for Energy Fuels as we navigate today's challenging uranium
markets."
Selected Summary Financial Information:
$000, except per
share data
|
|
Three months
ended
March 31, 2016
|
|
Three months
ended
March 31, 2015
|
Results of
Operations:
|
|
|
|
|
|
Total
revenues
|
$
|
17,996
|
$
|
7,600
|
|
Gross
profit
|
|
5,853
|
|
3,756
|
|
Net loss attributable
to the Company
|
|
(8,808)
|
|
(1,203)
|
|
Basic and diluted
loss per share
|
|
(0.19)
|
|
(0.06)
|
|
|
|
|
|
$000's
|
|
As at March 31,
2016
|
|
As at December
31,
2015
|
Financial
Position:
|
|
|
|
|
|
Working
capital
|
$
|
37,469
|
$
|
34,869
|
|
Property, plant and
equipment
|
|
27,915
|
|
29,069
|
|
Mineral
properties
|
|
91,000
|
|
91,031
|
|
Total
assets
|
|
192,228
|
|
192,280
|
|
Total long-term
liabilities
|
|
39,452
|
|
38,675
|
Overview
The Company expects to recover approximately 950,000 pounds of
U3O8 for the year ending December 31, 2016, as further described below.
The Company currently has finished goods inventory and
uranium extraction and recovery capabilities that exceed the
commitments contained in its existing sales contracts. As a
result, both ISR and conventional uranium extraction and/or
recovery have been, and are expected to continue to be, maintained
at conservative levels until such time as market conditions improve
sufficiently and/or the Company requires cash to meet its business
needs.
ISR Uranium Segment
In response to current market conditions, the Company expects to
delay the planned construction of one of its wellfields at the
Nichols Ranch Project to 2017. We currently plan to extract
and recover approximately 300,000 pounds of
U3O8 for the year ending December 31, 2016, compared with our previous
estimate of 350,000 pounds for 2016, as a result of this planned
delay. At March 31,
2016, the Nichols Ranch wellfields had seven header houses
extracting uranium. The Company plans to complete an eighth
header house by the end of 2016. A ninth header house was
originally planned for completion in 2016, but has been delayed due
to market conditions.
In February 2016, the Company
completed construction of the elution circuit and began the elution
process at the Nichols Ranch Plant. Yellowcake slurry from
this circuit is being shipped to our White Mesa Mill for final
yellowcake drying, packaging, and shipment to a conversion
facility.
Permitting of the adjacent Jane Dough Property is continuing and
is expected to be completed in advance of our need to begin
wellfield construction. Also, the nearby Hank Project is
fully permitted to be constructed as a satellite facility to the
Nichols Ranch Plant.
Conventional Uranium Segment
The Company expects the White Mesa Mill to recover approximately
650,000 pounds of U3O8 for the year ending
December 31, 2016.
The Company is planning to recover approximately 425,000 pounds
of U3O8, which was extracted from its Pinenut
Project. This is an increase of 50,000 pounds over what was
previously announced, due to updated weights and assays upon
receipt of material at the Mill. During 2016, the Company
also expects to recover approximately 225,000 pounds of
U3O8 from alternate feed materials.
The White Mesa Mill has historically operated on a campaign
basis, whereby uranium production is scheduled as mill feed, cash
needs, contract requirements, and/or market conditions may
warrant. Once the processing for 2016 concludes (expected to
be in late 2016), the Company expects to place uranium recovery
activities at the Mill on standby until additional mill feed
becomes available. The Mill will continue to dry and package
material from the Nichols Ranch Plant and continue to receive and
stockpile alternate feed materials for future milling
campaigns.
The Company is continuing shaft sinking activities at the Canyon
Project. Once the shaft depth approaches the mineralized
zone, we plan to complete additional exploration drilling to
further evaluate the deposit. The timing of our plans to
extract and process mineralized materials from this project will be
based on the results of this additional evaluation work, along with
market conditions, available financing, and sales requirements.
The Company expects to continue to pursue permitting activities
at certain of its conventional projects, including the Roca Honda
Project and the Sheep Mountain Project. The Company will also
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 our forecasts.
Sales
For 2016, the Company forecasts sales under its existing
long-term contracts to total approximately 550,000 pounds of
U3O8. Of this total, 300,000 pounds
were delivered in the first quarter of the year. The prices
for material sold under the existing long-term contracts are either
fixed or at floors. The average sales price under the
Company's long-term contracts is expected to be higher in 2016
versus 2015 levels.
The Company also sold 50,000 pounds of
U3O8 to a utility based on spot prices at the
time of the contract. The Company is currently monitoring
market conditions for additional sales opportunities.
Selective spot sales are expected to be made as necessary to
generate cash for operations and development activities.
In 2017, the Company expects to have existing inventory or
expected production to meet all of its commitments to sell 620,000
pounds of uranium under its existing long-term contracts at average
sales prices higher than 2015 levels.
About Energy Fuels: Energy Fuels
is a leading integrated US-based uranium mining company, supplying
U3O8 to major nuclear utilities. Energy
Fuels operates two of America's key uranium production centers, the
White Mesa Mill in Utah and the
Nichols Ranch Plant in Wyoming. The White Mesa Mill is the
only conventional uranium mill operating in the U.S. today and has
a licensed capacity of over 8 million pounds of
U3O8 per year. The Nichols Ranch Plant
is an in situ recovery ("ISR") production center with a licensed
capacity of 2 million pounds of U3O8 per
year. Energy Fuels also has the largest NI 43-101 compliant
uranium resource portfolio in the U.S. among producers, and uranium
mining projects located in a number of Western U.S. states,
including one producing ISR project, mines on standby, and mineral
properties in various stages of permitting and development.
The Company's common shares are listed on the NYSE MKT under the
trading symbol "UUUU", and on the Toronto Stock Exchange under the
trading symbol "EFR".
CONVERSION FROM IFRS TO U.S. GAAP
As previously announced, effective January 1, 2016, the Company became a 'U.S.
domestic issuer' for SEC reporting purposes and is therefore
required to prepare its financial statements in accordance with
United States Generally Accepted Accounting Principles ("U.S.
GAAP"). All prior financial statements and selected financial
data have been converted from International Financial Reporting
Standards ("IFRS") into U.S. GAAP for all periods required to be
presented in the financial statements and selected financial
data.
ADDITIONAL NON-US GAAP FINANCIAL PERFORMANCE MEASURES
The Company has included the additional non-US GAAP measure
"Gross Profit" in the financial statements and in this news
release. Management noted that "Gross Profit" provides useful
information to investors as an indication of the Company's
principal business activities before consideration of how those
activities are financed, sustaining capital expenditures, corporate
and exploration and evaluation expenses, finance income and costs,
and taxation.
CAUTIONARY STATEMENT 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, including:
production and sales forecasts; expected timelines for the
permitting and development of projects; the Company's expectations
as to longer term fundamentals in the market and price projections;
the Company's expectations as to expenditures and cost reductions;
the Company's ability to preserve its cash resources and maintain
its resource base; scalability, and the Company's ability to be
able to restart or increase production as market conditions
warrant; the ability of the Company to realize the expected
benefits of the acquisition of Uranerz; the expected completion and
expected benefits from the planned Mesteña and Roca Honda acquisitions; the expected
development and evaluations at the Canyon Project; the expected
costs at the Company's Nichols Ranch Project, Canyon Project, and
other projects and facilities; expectations that sufficient mill
feed will be available to sustain future campaigns at the White
Mesa Mill; and expectations to become or maintain its position as a
leading uranium company in the United States. 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, scalability, and the Company's ability to
restart or increase production in response to any increase in
commodity prices; risks inherent in the Company's and the
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; risks in meeting expected timelines for the development of
projects; government and third party actions with respect to
supplies of secondary sources of uranium; fluctuations or changes
in the market prices of uranium; risks associated with the
integration of Uranerz; the risk of failure to complete or realize
the expected benefits from the planned Mesteña and Roca Honda acquisitions; risks associated with
the expected development and evaluations at the Canyon Project;
risks associated with estimated expected costs at the Company's
Nichols Ranch Project, Canyon Project, and other projects and
facilities; the risk that sufficient mill feed will not be
available to sustain future campaigns at the White Mesa Mill; the
risk that uranium prices will not reach the levels required to
justify further development or production at the Company's
projects, including the White Mesa Mill, the Nichols Ranch Project,
and the Roca Honda Project; the risk that the Company will not be
able to enter into suitable term uranium sales contracts in the
future to support future development and production decisions; and
the other factors described under the caption "Risk Factors" in the
Company's Annual Report on Form 10-K dated March 15, 2016, 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.
SOURCE Energy Fuels Inc.