LAKEWOOD, CO, Aug. 5, 2016 /CNW/ - Energy Fuels Inc.
(NYSE MKT:UUUU; TSX:EFR) ("Energy Fuels" or the "Company"),
today reported its financial results for the quarter ended
June 30, 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 and Operational Highlights for the Quarter-Ended
June 30, 2016:
- $7.0 million of total revenue was
realized by the Company.
- Gross Profit of $1.3 million from
mining and milling operations was realized by the Company,
resulting in an 18% Gross Profit margin.
- 100,000 pounds of U3O8 sales were
completed by the Company pursuant to a long-term contract at an
average realized price of $70.00 per
pound.
- The Company recovered 80,000 pounds of
U3O8 from Nichols Ranch and 108,000 pounds of
U3O8 from conventional sources.
- At June 30, 2016, the Company had
$24.6 million of working capital,
including cash and cash equivalents of $14.4
million and approximately 360,000 pounds of uranium
concentrate inventory.
- A net loss of $10.4 million was
realized by the Company, including $3.5
million of development, permitting, and land holding costs
primarily related to wellfield construction and continued
shaft-sinking at the Canyon Project.
- 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 currently at a depth of approximately 1,100
feet. An underground drilling program to further evaluate the
Canyon deposit has commenced.
Acquisition Highlights for the Quarter-Ended June 30, 2016:
- On June 16, 2016, the Company
completed the acquisition of EFR Alta Mesa LLC ("Alta Mesa")
(formerly named Mesteña Uranium, LLC), and the Alta Mesa Project
through the issuance of 4.55 million shares. The acquisition
of the Alta Mesa Project is expected to expand Energy Fuels'
lower-cost uranium recovery operations. The Alta Mesa Project
includes a fully-licensed and existing ISR processing plant
currently on care and maintenance. With certain capital
expenditures and wellfield development, the project is expected to
resume uranium recovery operations upon sufficient improvement in
uranium prices.
- On May 27, the Company completed
the acquisition of the remaining 40% interest in the Roca Honda
Project from Sumitomo Corporation through the issuance of 1.21
million shares as well as an additional $4.5
million of cash payable upon first commercial mining
extraction from the property. The Company now owns 100% of
the Roca Honda Project, which is one of the largest and
highest-grade uranium projects in the U.S. and is in an advanced
stage of permitting.
Stephen P. Antony, Energy
Fuels' President and CEO stated: "During the last
quarter, Energy Fuels continued to execute its business plan and
meet guidance. We made excellent progress in strengthening
our lower-cost uranium production portfolio, as we acquired the
Alta Mesa ISR Project, extracted 80,000 pounds of uranium from
eight header-houses at the Nichols Ranch ISR Project, packaged
108,000 pounds from conventional sources, and continued
shaft-sinking and resource evaluation at our Canyon Project.
In addition, we affirm our previously announced 2016 guidance of
550,000 pounds of contract sales and 950,000 pounds of uranium
recovery.
"Unfortunately, the price of uranium continues to disappoint in
2016. Put simply, the world is over-supplied with uranium
today and end-user demand is not yet sufficient to catalyze an
uplift in prices. Amid this market uncertainty, we continue
to deliver into our above-market long-term contracts, control
costs, rationalize our asset portfolio, and preserve Energy Fuels'
optionality to significantly increase production when prices
improve. As an example, while we expect to recover just under
one million pounds of uranium in 2016, we currently have over 11.5
million pounds of uranium recovery capacity, and an
industry-leading U.S.-based uranium resource portfolio to feed into
that capacity. I would argue that no other uranium mining
company can claim these levels of scalability."
Selected Summary Financial Information:
$000, except per share
data
|
Three months ended
June 30, 2016
|
Six months ended
June 30, 2016
|
Results of
Operations:
|
|
|
|
Total revenues
|
$
|
7,006
|
$
|
25,002
|
|
Gross profit
|
1,288
|
8,760
|
|
Net loss attributable to the
company
|
(10,408)
|
(19,216)
|
|
Basic and diluted earnings (loss) per
share
|
(0.20)
|
(0.38)
|
|
|
|
$000's
|
As at June 30,
2016
|
As at December 31,
2015
|
Financial
Position:
|
|
|
|
Working capital
|
$
|
24,600
|
$
|
34,869
|
|
Property, plant and
equipment
|
40,314
|
29,069
|
|
Mineral properties
|
93,630
|
91,031
|
|
Total assets
|
201,469
|
192,280
|
|
Total long-term
liabilities
|
41,542
|
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 market conditions, we currently plan to recover
approximately 300,000 pounds of
U3O8 from our ISR segment for the year
ending December 31, 2016.
At June 30, 2016, the Nichols
Ranch wellfields had eight header houses extracting uranium.
The Company plans to complete a ninth header house by the end of
2016. Further header houses will be completed as production
needs and market conditions warrant.
Permitting of the adjacent Jane Dough Property is continuing and
is expected to be completed in advance of our need to begin
wellfield construction at this location. Also, the 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 extracted from its Pinenut
Project. During 2016, the Company also expects to recover
approximately 225,000 pounds of U3O8 from
alternate feed materials during the corresponding period.
The White Mesa Mill has historically operated on a campaign
basis, whereby uranium recovery is scheduled as mill feed, cash
needs, contract requirements, and/or market conditions may
warrant. Once the Pinenut ore processing for 2016 concludes
(expected to be in late 2016), the Company expects to recover
uranium from certain alternate feed sources and process certain
uranium bearing solutions into mid-2017. Once these processes
are completed the Company expects to place uranium recovery
activities at the Mill on standby until additional mill feed
becomes available. The Mill will 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 and has completed the installation of new equipment and
infrastructure to optimize shaft sinking rates and realize
construction cost savings. We have also commenced additional
underground 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, 400,000 pounds
were delivered in the first half of the year with the remaining
amount to be delivered in the third 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
than 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. The
Company expects to sell an additional 200,000 pounds of
U3O8 in the second half of the year.
Selective additional spot sales may 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 2016 levels.
The Company is actively focused on its forward looking liquidity
needs, especially in light of the current depressed uranium
markets. The Company is evaluating its ongoing fixed cost
structure as well as decisions related to project retention,
advancement and development. Significant development
activities, if warranted, will require that we arrange for
financing in advance of planned expenditures.
About Energy Fuels: Energy Fuels is a
leading integrated US-based uranium mining company, supplying
U3O8 to major nuclear utilities. Energy
Fuels holds three of America's key uranium production centers, the
White Mesa Mill in Utah, the
Nichols Ranch Processing Facility in Wyoming, and the Alta Mesa Project in
Texas. 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 Processing Facility is an ISR production center
with a licensed capacity of 2 million pounds of
U3O8 per year. Alta Mesa is an ISR
production center currently on care and maintenance. 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". The Company's Debentures are listed on the Toronto
Stock Exchange under the trading symbol "EFR.DB."
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 Alta Mesa 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 the Alta Mesa 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, the Alta Mesa 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.