LAKEWOOD, CO, March 10, 2017 /CNW/ - Energy Fuels Inc.
(NYSE MKT:UUUU; TSX:EFR) ("Energy Fuels" or the "Company"),
today reported its financial results for the year ended
December 31, 2016. The
Company's Annual Report on Form 10-K 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 & Operational Highlights:
- $54.55 million of total revenue
was realized by the Company.
- At December 31, 2016, the Company
had $24.02 million of working
capital, including cash and cash equivalents of $16.90 million and approximately 490,000 pounds
of uranium concentrate inventory.
- Gross Profit of $13.74 million
from mining and milling operations was realized by the
Company.
- Gross profit margin from uranium recovery operations of
approximately 25%.
- A net loss attributable to the Company of $39.41 million.
- 1,150,000 pounds of U3O8 sales were
completed by the Company at an average realized price of
$47.42 per pound. 850,000 pounds of
sales were pursuant to long-term contracts at an average price of
$56.64 per pound and 300,000 pounds
of sales were from a spot sale at a price of $21.10 per pound.
- 1,015,000 pounds of U3O8 were recovered
by the Company.
Stephen P. Antony, Energy
Fuels' President and CEO stated: "Amidst market
uncertainty and volatility, Energy Fuels has enhanced its readiness
for a uranium market recovery. We believe we lowered our
portfolio-wide cost of production through the acquisition of the
Alta Mesa ISR Project. The Nichols Ranch ISR Project
continued to perform well. And, the Canyon Mine delivered
some exceptional drill results. We knew Canyon was an
excellent high-grade uranium deposit. However, underground
drilling has exceeded our already high expectations. We have
identified additional zones of high-grade uranium
mineralization. But the big surprise was our discovery of
areas of high-grade copper mineralization. We look forward to
providing markets with more information on the Canyon deposit as
the year goes on.
"While uranium markets continue to find their footing, we
believe Energy Fuels continues to differentiate itself in terms of
our readiness to respond to improving uranium market
conditions. As prices improve, we have the option to quickly
construct new wellfields at Nichols Ranch and Alta Mesa. We can also place the Canyon
Mine into production and restart operations at our standby
mines. While our current plan calls for reducing production
in 2017, if we receive the correct market signals, we have the
ability to quickly change our plans and capture the benefits of
improving prices."
Mergers & Acquisition Highlights:
On June 17, 2016, the Company
completed its acquisition of Mesteña Uranium, LLC
("Mesteña"). This acquisition added the Alta Mesa ISR Project
("Alta Mesa") in South Texas to
the Company's portfolio. At the closing, Energy Fuels issued
4,551,284 common shares of the Company to the owners of
Mesteña. The acquisition of Alta
Mesa is expected to expand Energy Fuels' lower-cost uranium
recovery capabilities. Alta
Mesa is currently on care and maintenance and is expected to
resume uranium recovery operations upon sufficient improvement in
uranium prices. In addition, on August
2, 2016, the Company announced a significant maiden uranium
resource estimate for Alta
Mesa. According to a technical report, prepared and
filed in accordance with National Instrument 43-101 – Standards
of Disclosure for Mineral Projects ("NI 43-101"), Alta Mesa holds a total of 1.6 million tons of
measured and indicated mineral resources with an average grade of
0.111% U3O8 containing 3.6 million pounds of
uranium, along with 7.0 million tons of inferred mineral resources
with an average grade of 0.121% U3O8
containing 16.8 million pounds of uranium.
On May 27, 2016, the Company
completed its acquisition of Sumitomo Corporation's ("Sumitomo's")
40% interest in the Roca Honda Project for: (i) 1,212,173
common shares of the Company; and (ii) once commercial mineral
extraction is commenced at the Roca Honda Project, an additional
$4.5 million of cash payable at that
time. As a result of this transaction, the Company now owns
100% of the Roca Honda Project, which is one of the largest and
highest-grade uranium deposits in the U.S. In addition, on
December 23, 2016, the Company
announced that an updated Preliminary Economic Assessment on the
Roca Honda Project had been prepared and filed in accordance with
NI 43-101.
Other Highlights:
The Company continued shaft-sinking operations at its Canyon
Project in 2016, and expects to complete the shaft to a total depth
of 1,470 feet in March 2017. Underground drilling to further
define the Canyon deposit commenced in 2016 and is expected to be
completed in March 2017. While evaluation of the core samples
is ongoing, samples assayed to date indicate zones of high-grade
uranium, which are expected to expand the previously estimated
mineral resource, and newly discovered copper mineralization.
The best uranium intercepts (based on chemical assay and
grade-thickness) include 6.0-feet of mineralization with an average
grade of 16.99% U3O8, 46.0-feet of
mineralization with an average grade of 1.37%
U3O8, and 41-feet of mineralization with an
average grade of 1.09% U3O8. Twenty
previously released drill intercepts, with a total intercept length
of 645-feet have ranged between 1.20% and 26.20% Cu. The
Company is evaluating the potential for recovering all or a portion
of this copper at its White Mesa Mill as a value-added byproduct
along with the recovery of uranium.
On April 15, 2016, the Company
announced that Mark Chalmers had
been appointed as the Company's Chief Operating Officer effective
July 1, 2016, in order to oversee all
of the Company's conventional and ISR operations. In
addition, on January 31, 2017 Mr.
Harold Roberts retired as the
Company's Executive Vice President of Conventional Operations.
Selected Summary Financial Information:
|
|
|
|
$000, except per
share data
|
Year ended
December 31,
2016
|
Year ended
December 31,
2015
|
Year ended
December 31,
2014
|
Results of
Operations:
|
|
|
|
|
Total
revenues
|
$
|
54,552
|
$
|
61,351
|
$
|
46,253
|
|
Gross
profit
|
13,737
|
23,734
|
16,346
|
|
Net loss attributable
to the company
|
(39,413)
|
(82,217)
|
(86,635)
|
|
Basic and diluted
earnings (loss) per share
|
(0.70)
|
(2.46)
|
(4.41)
|
|
|
|
|
$000's
|
As at December
31,
2016
|
As at December
31,
2015
|
|
Financial
Position:
|
|
|
|
|
Working
capital
|
$
|
24,023
|
$
|
35,131
|
|
|
Property, plant and
equipment
|
37,582
|
29,069
|
|
|
Mineral
properties
|
92,625
|
91,031
|
|
|
Total
assets
|
196,457
|
192,280
|
|
|
Total long-term
liabilities
|
46,487
|
38,937
|
|
Operations and Sales Outlook:
In response to continued uranium price weakness and market
uncertainty, the Company expects to defer further development of
its Nichols Ranch ISR Project ("Nichols Ranch") beyond its ninth
header house and keep the Alta Mesa Project on care and
maintenance. 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. The
Company will also complete its evaluation of the Canyon Project as
discussed below. In addition, the Company is continuing to
manage its activities and assets conservatively, maintaining its
substantial uranium resource base and its ISR and conventional
uranium extraction and recovery capabilities.
Extraction and Recovery – ISR Uranium Segment
The Company recovered approximately 335,000 pounds of
U3O8 from Nichols Ranch for the year ended
December 31, 2016. The Company
expects to produce approximately 350,000 pounds in the year ending
December 31, 2017 from Nichols
Ranch.
At December 31, 2016, the Nichols
Ranch wellfields had eight header houses extracting uranium.
The Company completed a ninth header house and began
extracting uranium in March 2017.
Until such time that improvement in uranium market conditions
is observed or suitable sales contracts can be entered into, the
Company intends to defer development of further header houses at
Nichols Ranch and to keep Alta Mesa
on care and maintenance.
Permitting of the Jane Dough Property ("Jane Dough"), which is
adjacent to Nichols Ranch, is continuing and is expected to be
completed by mid-2017. Jane Dough is expected to be placed
into production after the thirteenth header house is completed at
Nichols Ranch. Following Jane Dough, the Hank Project is
fully permitted to be constructed as a satellite facility to
Nichols Ranch.
Extraction and Recovery – Conventional Uranium
Segment
The Company recovered approximately 680,000 pounds of
U3O8 from the White Mesa Mill during the year
ended December 31, 2016, primarily
from alternate feed materials and milling of previously mined ore
from the Pinenut Mine. The Company expects to recover
approximately 450,000 pounds of U3O8 during
the year ending December 31, 2017 at
the White Mesa Mill, including approximately 300,000 pounds of
U3O8 from dissolved uranium not recovered
from previous processing in the mill's tailings management system
("Pond Return") and approximately 150,000 pounds of
U3O8 from alternate feed material sources.
In addition, the Company expects to earn a fee for processing
additional quantities of alternate feed material at the White Mesa
Mill. The processing fee earned by the Company is expected to
cover the Company's processing cost and provide the Company with a
reasonable margin.
The Company is actively pursuing additional opportunities to
process alternate feed material sources, low grade ore in
connection with various uranium clean-up activities, and further
recovery of Pond Return.
Evaluation, Permitting and Standby Activities – Conventional
Uranium Segment
The Company is selectively advancing permits at certain of its
other major conventional uranium projects. In January 2017, the Company obtained the necessary
permits to mine the open pit and underground portions of its Sheep
Mountain Project in Wyoming. The Company also plans to
continue the licensing and permitting of the Roca Honda Project,
maintain required permits at the Company's conventional standby
projects including the La Sal Project and the Daneros Project, and
complete certain other well-advanced permits on the Daneros Project
expansion and the La Sal Project expansion. All of these
projects serve as important pipeline assets for the Company's
future conventional production capabilities, as market conditions
warrant.
Sales
During the year ended December 31,
2016, the Company completed sales under its existing
contracts of 850,000 pounds of U3O8.
The Company also sold approximately 300,000 pounds of
U3O8 based on spot prices at the time of the
contract.
In 2016, the Company contracted to sell 200,000 pounds of
U3O8 on December 1,
2016 and 200,000 pounds in each of the years ending
December 31, 2017 and 2018, with each
delivery being priced based on the average spot price per pound of
uranium for the five weeks prior to the date of delivery.
In 2017, the Company expects to complete deliveries of 520,000
pounds of U3O8 under four contracts,
including 320,000 pounds under three long-term contracts and
200,000 pounds under the spot contract discussed above. The
Company is currently monitoring market conditions for additional
sales opportunities. Selective additional spot sales may be
made as necessary to generate cash for operations and development
activities. The Company also continues to pursue new sources
of revenue, including additional alternate feed materials and other
sources of feed for the Mill.
Stephen P. Antony, P.E., President & CEO of Energy
Fuels, is a Qualified Person as defined by Canadian
National Instrument 43-101 and has reviewed and approved the
technical disclosure contained in this news release, including
sampling, analytical, and test data underlying such
disclosure.
The summary of core results for the Canyon Project is based
on assay results from 157 samples that were taken from split NQ
size core ranging from 2 to 10 ft. lengths. Assay analysis
was performed at the White Mesa Mill Laboratory.
U3O8 was analyzed using spectrophotometry,
and copper was analyzed using ICP-OES. A QA/QC program has
been implemented for the Canyon core drilling campaign. The
QA/QC program includes: fine duplicates (2 per 100 samples are
split and both samples are analyzed by the Mill lab and compared);
coarse duplicates (2 per 100 samples are split and both samples are
analyzed by the Mill lab and compared); standards and blanks (8 per
100 samples are certified standards or blanks and the Mill lab
results are compared to the certified values, and 3 different
sample standards and 2 different sample blanks are used in the
program); and 3rd party laboratory analysis (a split of
4 per 100 samples are sent to Inter-Mountain Labs, Inc. (IML) in
Sheridan, Wyoming for independent
uranium and copper testing; and the IML results are then compared
to the Mill lab results. To date, 32 IML results have been
received and confirmed to be consistent with the Mill lab
results. In general, the breccia pipe mineralized zone where
the samples were collected is orientated vertically, varies in
diameter from 140 to 190 feet, and ranges in depth from 1,200 to
1,600 feet below the surface.
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 also produces vanadium as a
co-product of its uranium production form certain of its mines on
the Colorado Plateau, as market conditions warrant. 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".
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 notes 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: production and sales
forecasts; expectation that the acquisition of the Alta Mesa
Project has lowered the Company's portfolio-wide cost of production
or has expanded the Company's future lower-cost ISR scalability;
the Company's expectations as to the timing of completion of shaft
sinking, underground drilling, evaluation and preparation of a
revised NI 43-101 Report for the Canyon Project; expectations that
drill results at the Canyon Project could result in an expansion of
the previously estimated mineral resource and/or identification of
a significant copper resource; whether all or a portion of any
copper resource at the Canyon Project can be recovered at the White
Mesa Mill or elsewhere; 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; the
expectation that amendments to the Company's Debentures will
provide the Company with additional financial flexibility for
execution of its business plan; the expectation that the Company
will earn a reasonable margin on any of its alternate feed material
or other processing activities; the ability of the Company to
secure any new sources of alternate feed materials or other
processing opportunities at the White Mesa Mill; the ability of the
Company to manage its activities and assets conservatively under
current market conditions while maintaining its uranium resource
base and recovery capabilities; the ability of the Company to enter
into suitable sales contracts in the future; expected timelines for
the permitting and development of projects; mineral resource
estimates; 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; 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:
production and sales forecasts; expectation that the acquisition of
the Alta Mesa Project has lowered the Company's portfolio-wide cost
of production or has expanded the Company's future lower-cost ISR
scalability; the Company's expectations as to the timing of
completion of shaft sinking, underground drilling, evaluation and
preparation of a revised NI 43-101 Report for the Canyon Project;
expectations that drill results at the Canyon Project could result
in an expansion of the previously estimated mineral resource and/or
identification of a significant copper resource; whether all or a
portion of any copper resource at the Canyon Project can be
recovered at the White Mesa Mill or elsewhere; 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; the expectation that amendments to the Company's
Debentures will provide the Company with additional financial
flexibility for execution of its business plan; the expectation
that the Company will earn a reasonable margin on any of its
alternate feed material or other processing activities; the ability
of the Company to secure any new sources of alternate feed
materials or other processing opportunities at the White Mesa Mill;
the ability of the Company to manage its activities and assets
conservatively under current market conditions while maintaining
its uranium resource base and recovery capabilities; the ability of
the Company to enter into suitable sales contracts in the future;
expected timelines for the permitting and development of projects;
mineral resource estimates; 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;
expectations to become or maintain its position as a leading
uranium company in the United
States; and the other factors described under the caption
"Risk Factors" in the Company's Annual Report on Form 10-K dated
March 9, 2017, 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.
CAUTIONARY NOTE TO UNITED
STATES INVESTORS CONCERNING ESTIMATES OF MEASURED, INDICATED
AND INFERRED RESOURCES
This news release contains certain disclosure that has been
prepared in accordance with the requirements of Canadian securities
laws, which differ from the requirements of U.S. securities
laws. Unless otherwise indicated, all reserve and resource
estimates included in this news release have been prepared in
accordance with Canadian National Instrument 43-101 – Standards of
Disclosure for Mineral Projects ("NI 43-101") and the Canadian
Institute of Mining, Metallurgy and Petroleum ("CIM")
classification system. Canadian standards, including NI
43-101, differ significantly from the requirements of U.S.
securities laws, and reserve and resource information contained in
this news release may not be comparable to similar information
disclosed by companies reporting only under U.S. standards.
In particular, the term "resource" does not equate to the term
"reserve" under SEC Industry Guide 7. United States investors are cautioned not to
assume that all or any of Measured or Indicated Mineral Resources
will ever be converted into mineral reserves. Investors are
cautioned not to assume that all or any part of an "Inferred
Mineral Resource" exists or is economically or legally
minable. Energy Fuels does not hold any Reserves as that term
is defined by SEC Industry Guide 7. Please refer to the
section entitled "Cautionary Note to United States Investors
Concerning Disclosure of Mineral Resources" in the Company's Annual
Report on Form 10-K dated March 9,
2017 for further details.
SOURCE Energy Fuels Inc.