DENVER, March 20, 2018 /CNW/ - Energy Fuels Inc.
(NYSE American: UUUU; TSX: EFR) ("Energy Fuels" or the
"Company"), a leading producer of uranium in the United States, is pleased to present the
following Letter to Shareholders from President and Chief Executive
Officer ("CEO") Mark S.
Chalmers:
Dear Fellow Shareholders:
As you know, I was recently appointed President and Chief
Executive Officer of Energy Fuels. I am excited and grateful for
the opportunity to lead this company, and on behalf of the Board of
Directors and my Management Team, I thank you for your continued
support of Energy Fuels and our vision of becoming a major global
supplier of uranium.
I have a light-hearted phrase that I occasionally repeat around
our headquarters here in Lakewood,
Colorado that I think is a fitting theme for my first Letter
to Shareholders: "Energy Fuels might be small, but we're mighty!"
When you look at Energy Fuels' production capabilities, asset
portfolio, and our involvement in broad national policy discussions
in the United States, and compare
that to the relatively small size of our company compared to the
largest producers of uranium in the world – both in terms of our
staff size and our market capitalization – you will see what I
mean.
In short, we are not afraid to make big things happen for the
purpose of building value for our shareholders. As of late, we have
become deeply involved in national policy debates about U.S.
national security. We are working with the U.S. government to be a
part of the solution for major environmental clean-ups. We are an
important voice in discussions about public land and environmental
policy issues. We are creatively leveraging our assets and
capabilities to generate other sources of revenue. And, we are the
largest producer of uranium in the United
States. Not bad for a company of our size!
Make no mistake about it. Our primary focus remains large-scale,
profitable uranium production, and we pursue all of our activities
in support of this focus. We continue to maintain our
industry-leading uranium production capabilities, including
licensed and permitted projects that can resume and increase
production quickly after a production decision is driven by higher
uranium prices. Things are happening in global uranium markets,
namely major production cuts, that we believe will rationalize this
market and, with it, the return of much higher uranium prices …
eventually. Unfortunately, that has been the defining – and
frustrating – characteristic of the uranium market over the past
few years. We all see the positive supply and demand fundamentals.
We see the production cuts, the policies to address climate change
and air pollution, and the slow and steady global growth of nuclear
energy. However, no one knows when these fundamentals will spawn
higher prices, and the recovery has thus far eluded us.
Therefore, in order to preserve our substantial uranium
production capabilities, while minimizing shareholder dilution, we
continually seek to capitalize on other opportunities isolated from
the low global uranium market prices, including new sources of
alternate feed materials and fee processing arrangements, land
cleanup work, and vanadium recovery. None of our peers share in
this quantum of other optionality. In addition, we recently
participated in the filing of a 232 Petition with the federal
government.
First, we are always "beating the bushes" to find new sources of
alternate feed materials and fee processing arrangements for our
White Mesa Mill. In 2017, we re-processed about 950,000 pounds of
off-spec uranium concentrate for a third party, earning fees of
about $6 million. Today, we are
talking to several additional parties about new business for 2018
and beyond. In fact, we currently project that the White Mesa Mill
will be cash-flow positive for 2018, as it was in 2017 when it was
the single largest producer of uranium in the entire U.S.
Land cleanup work also presents an excellent long-term
opportunity for Energy Fuels' and our White Mesa Mill. During the
early years of the Cold War, hundreds of small,
government-sponsored uranium mines operated in the U.S.
Unfortunately, many of these sites were never properly remediated,
as there was little or no regulation at the time. Today, the U.S.
Environmental Protection Agency ("EPA") is spearheading the effort
to clean-up these sites, many of which are located on Navajo Nation
land. The White Mesa Mill is located just a short distance away
from the northern edge of the Navajo Nation, so it is the perfect
facility to cost-effectively recycle low-grade ore from these sites
and produce uranium that can be used for the generation of clean
electricity. In addition, there are numerous other companies with
reclamation obligations at abandoned uranium mine sites in the
region, and the White Mesa Mill is the most rational facility to
handle this material. For providing these services, we would earn
processing fees, as well as recover uranium.
Then, there's vanadium. Vanadium is a mineral used in
high-strength steel, titanium and other alloys and in batteries
used in renewable energy systems. Vanadium prices have risen by
more than 400% over the past 24 months. And, the White Mesa Mill –
in addition to being the only conventional uranium mill operating
in the U.S. – is also the last operating facility left in the U.S.
with the near-term ability to resume recovery of vanadium. Indeed,
according to a February 16, 2018
announcement, both uranium and vanadium are on a draft federal
government list of strategic minerals that are "critical to the
economic and national security of the
United States." Our mill last produced vanadium (as
V2O5) in 2013, and during its 38 year
operating history, it has actually produced over 45 million pounds
of vanadium – or over $500 million at
today's vanadium prices. We have a number of mines in Utah and Colorado that contain large quantities of
high-grade vanadium resources, including the Whirlwind Mine and the
La Sal Complex where we recently received government approvals for
an expansion. We are also evaluating the potential to recover
vanadium from pond water at the mill and processing some vanadium
alternate feed sources similar to our uranium alternate feed
program.
These are all exciting opportunities. However, we are not
building our core business around them. We view them as "bridges"
to increased primary production from our uranium mines as market
conditions improve. We can respond immediately to positive market
signals from a number of different mines, including our Canyon
Mine, Nichols Ranch ISR Project, and Alta Mesa ISR Project located
in Arizona, Wyoming and Texas, respectively.
With regard to our primary uranium production focus, we recently
filed a Section 232 Petition with the U.S. Department of Commerce
("DOC"), along with fellow U.S. uranium producer, Ur-Energy. Like
you, we've all been frustrated by the slow, uneven pace of the
uranium market recovery. The Petition describes how uranium and
nuclear fuel from state-owned and state-subsidized enterprises in
Russia, Kazakhstan, Uzbekistan, and China potentially represent a threat to U.S.
national security. The Petition seeks a remedy which will set a
quota to limit imports of uranium into the U.S., effectively
reserving 25% of the U.S. nuclear market for U.S. uranium
production. Additionally, the Petition suggests implementation of a
requirement for U.S. federal utilities and agencies to buy U.S.
uranium in accordance with the President's Buy American Policy. The
remedies, if granted, would be expected to strengthen the U.S.
uranium mining industry, bolster national defense, and improve
supply diversification for U.S. utilities and their customers.
Energy Fuels has about 11.5 million pounds of licensed capacity
at our three production facilities. We have a number of mines that
are fully-permitted, developed and ready to go into production, and
we have other mines that are very close to being permitted for
production. Energy Fuels continues to have an asset portfolio that
is unmatched in the U.S. uranium industry in terms of production
scalability, licensed and permitted facilities, and in-ground
resources. We stand ready for the opportunity to deploy our
significant capabilities to bolster U.S. energy security and
national security.
Lastly, for those that do not know me personally, I have worked
in the U.S. and international uranium mining sectors for over 40
years. I started my career here in the U.S. as an underground
uranium miner. Later, I branched out into uranium production in
Australia, Namibia, Malawi, and even Kazakhstan. I returned to the U.S. nearly two
years ago to join Energy Fuels; a company I believe represents the
best uranium producer opportunity in the world. How can I have so
much confidence in Energy Fuels? Because I have seen the world of
uranium production, and it is obvious to me that Energy Fuels'
combination of unique high-quality production facilities,
high-grade and low-cost resources, and – most importantly – our
people, is truly unsurpassed.
In closing, 2018 should be a key year in the growth trajectory
of Energy Fuels, and we have multiple major opportunities in front
of us, any one of which will allow us to take major strides toward
achieving our goals. As I mentioned earlier, today we are "small
but mighty." Hopefully this time next year, I can report back that
we are "larger and mightier" than we are today!
Respectfully,
Mark S. Chalmers
President, CEO and Shareholder in Energy Fuels
About Energy Fuels: Energy Fuels is a leading integrated
US-based uranium mining company, supplying
U3O8 to major nuclear utilities. Its
corporate offices are in Denver,
Colorado, and all of its assets and employees are in the
western United States. 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 by-product of
its uranium production from certain of its mines on the Colorado
Plateau, as market conditions warrant. 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
www.energyfuels.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This news release contains certain "Forward Looking
Information" and "Forward Looking Statements" within the meaning of
applicable securities legislation, which may include, but is not
limited to, statements with respect to: 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; any expectations regarding vanadium opportunities; the
ability of the Company to secure any new sources of alternate feed
materials or other processing opportunities at the White Mesa Mill;
any expectations as to cash flows 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; and the outcome of
the Department of Commerce Section 232 investigation, including
whether or not the Secretary of Commerce will make a recommendation
to the President and the nature of the recommendation; whether or
not the President will act on the recommendation and, if so, the
nature of the action and remedy; and the expected benefits of the
proposed remedies. 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: 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; any
expectations regarding vanadium opportunities; the ability of the
Company to secure any new sources of alternate feed materials or
other processing opportunities at the White Mesa Mill; any
expectations as to cash flows 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; and the outcome of the
Department of Commerce Section 232 investigation, including whether
or not the Secretary of Commerce will make a recommendation to the
President and the nature of the recommendation; whether or not the
President will act on the recommendation and, if so, the nature of
the action and remedy; the expected benefits of the proposed
remedies; and the other factors described under the caption "Risk
Factors" in the Company's Annual Report on Form 10-K dated
March 9, 2018, 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 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 resources referred to in this news release
have been estimated in accordance with 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 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 resources will ever be
converted into mineral reserves. Investors are cautioned not to
assume that all or any part of a resource 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,
2018 for further details.
SOURCE Energy Fuels Inc.