LAKEWOOD, Colo., Oct. 30, 2020 /CNW/ - Energy Fuels Inc.
(NYSE American: UUUU) (TSX: EFR) ("Energy Fuels" or the
"Company") today reported its financial results for the
quarter ended September 30, 2020. 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 U.S. dollars.
Highlights:
- The Company had working capital of $44.7
million at the end of Q3-2020, representing an increase of
17% over Q2-2020. Working capital included $28.1 million in cash and marketable securities,
plus $25.6 million of concentrate
inventory and work in progress, including 663,300 pounds of uranium
concentrates valued on our balance sheet at $23.72 per pound and 1,672,000 pounds of vanadium
valued on our balance sheet at $5.11
per pound, both in the form of immediately marketable product. As
of October 23, 2020, the spot price
of uranium was $29.70 per pound and
the mid-point spot price of vanadium was $5.35 per pound, which places a current market
value on our concentrate inventories of approximately $28.6 million. As a result of existing
inventories and planned production, the Company expects to have
between 670,000 and 700,000 pounds of finished uranium and 1.672
million pounds of finished vanadium in inventory at the end of
2020.
- On October 6, 2020, the Company
announced it was debt-free following the retirement of its floating
rate convertible unsecured subordinated debentures (the
"Debentures"). On July 14,
2020, the Company distributed Cdn$10,430,000 of cash to holders of the
Debentures, and on October 6, 2020,
the Company distributed a further Cdn$10,430,000 of cash to the remaining holders
of the Debentures.
- On September 21, 2020, the
Company and a team from Penn State
University were selected by the U.S. Department of Energy
("DOE") to develop a design for the production of a rare
earth element ("REE") concentrate from coal-based resources.
The Company believes the REEs contained in these coal-based
resources are similar to the REEs contained in other ores the
Company is evaluating in its REE program.
- On September 14, 2020, the U.S.
Department of Commerce ("DOC") announced it had obtained
Russia's agreement to extend
limits on uranium imports into the U.S. from Russia through 2040 under an extended Russian
Suspension Agreement ("RSA"). The extension to the RSA was
finalized on October 5, 2020. This
was an important step toward maintaining the long-term health of
the U.S. uranium mining industry, as the expiration of the RSA at
the end of 2020 could have resulted in unlimited quantities of
Russian uranium imports into the U.S.
- On August 20, 2020, the Company
announced it made a number of changes to its management team in
order to reduce costs, flatten the organizational structure, and
focus on the ongoing growth of a new generation of U.S. uranium and
REE executives. Effective as of August 31,
2020, Mr. W. Paul Goranson
(Chief Operating Officer) left the Company to pursue other
opportunities, and Mr. Matt
Tarnowski (Chief Accounting Officer) will similarly be
leaving the Company on October 31,
2020.
Mark S. Chalmers, Energy
Fuels' President and CEO, stated:
"Energy Fuels made significant strides in the last quarter on
our uranium, rare earths, and other initiatives."
"On the uranium front, we were pleased to see the U.S.
Department of Commerce successfully extend the Russian Suspension
Agreement. Allowing the RSA to expire would have been a disaster
for the U.S. uranium mining industry, so extending it gives U.S.
uranium producers a chance to compete in the future. However, there
is much work left to perform in order to actually revive and expand
the U.S. industry in the short term, including funding the U.S.
uranium reserve."
"On the REE front, we are making excellent progress. We are
currently conducting pilot-scale testing on ore sources at the
White Mesa Mill, which is confirming our ability to produce an
on-spec rare earth concentrate at a commercial level, along with
the uranium from the ore. We are also in discussions with various
parties in North America regarding
rare earth/uranium ore sources for the Mill and potential purchase
of our finished rare earth concentrate. We hope to provide updates
on commercial aspects of this initiative in the coming weeks,
including details about the timing and scale of potential
commercial production. We are also pleased to have been selected by
the U.S. Department of Energy to work with a team from Penn State University to develop a design for the
production of an REE concentrate from coal-based resources. This
demonstrates DOE's recognition of the importance of the White Mesa
Mill in helping the U.S. re-establish its domestic REE supply
chain. We are particularly excited about this in light of the
President's October 1, 2020 Executive
Order on Critical Minerals, in which he declared a state of
emergency to address America's overreliance on critical minerals,
including uranium, vanadium and REEs, from foreign
adversaries."
"On the financial front, Energy Fuels was proud to announce on
October 6 that we had paid off all of
our debt, and that the Company is debt-free for the first time
since 2012. This is a significant achievement, distinguishing us
from many of our peers in the uranium and natural resource sectors.
Having no debt reduces our costs and allows us to better weather
market volatility. Coupled with our strong working capital position
of $44.7 million at September 30, having no debt provides us with a
clean slate from which to increase uranium production when
warranted and to continue our rare earth and other
initiatives."
Selected Summary Financial Information:
$000, except per
share data
|
Nine months
ended
September 30, 2020
|
Nine months
ended
September 30, 2019
|
Results of
Operations:
|
|
|
Total
revenues
|
$
|
1,274
|
$
|
5,164
|
|
|
|
|
|
Gross profit
(loss)
|
(370)
|
(6,866)
|
Operating profit
(loss)
|
(23,624)
|
(30,458)
|
Net income (loss)
attributable to the
company
|
(22,699)
|
(28,279)
|
|
|
|
Basic and diluted loss
per share
|
(0.19)
|
(0.30)
|
|
|
|
$000's
|
As at September
30,
2020
|
As at December
31,
2019
|
Financial
Position:
|
|
|
Working
capital
|
$
|
44,683
|
$
|
20,534
|
Property, plant and
equipment
|
24,299
|
26,203
|
Mineral
properties
|
83,539
|
83,539
|
Total
assets
|
188,912
|
175,720
|
Total long-term
liabilities
|
20,904
|
22,475
|
Webcast on Tuesday, November 3,
2020 at 4:00 pm ET
(2:00 pm MT)
To join the webcast, please dial 1-888-390-0541 (toll free in
the U.S. and Canada). The
viewer-controlled webcast slides can be accessed through the
following link:
Energy Fuels Q3-2020 Results – Webcast Link
A link to a recorded version of the proceedings will be
available shortly after the webcast by calling 1-888-390-0541 (toll
free in the U.S. and Canada) and
entering the code 303725#. This recording will be available until
November 17, 2020.
Outlook
Operations and Sales Outlook Overview
Subject to market conditions, the Company plans to extract
and/or recover limited amounts of uranium from its Nichols Ranch
Project in 2020, which was placed on standby in the first quarter
of 2020 due to the depletion of its existing wellfields. In
addition, during 2020 the Company expects to recover uranium at the
White Mesa Mill from in-circuit uranium inventories extracted from
the recent vanadium Pond Return campaign, from Alternate Feed
Materials and from other Pond Return activities. The vanadium Pond
Return campaign conducted in 2019 was brought to a close in early
2020.
Both ISR and conventional uranium recovery is expected to be
maintained at reduced levels, as a result of current uranium market
conditions, until such time when market conditions improve
sufficiently.
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 that can be processed under
existing market conditions (i.e., without reliance on current
uranium sales prices). The Company is also evaluating opportunities
to potentially recover REEs at the White Mesa Mill, and will also
continue its support of U.S. governmental activities to support the
U.S. uranium mining industry. In addition, the Company is in
discussions with several parties to potentially sell certain of its
non-material properties, although, there are not currently any
binding offers, and there can be no assurance at this time that a
sale will be completed. The Company will evaluate additional
acquisition and disposition opportunities that may arise.
Extraction and Recovery Activities Overview
During the nine months ended September
30, 2020, the Company recovered approximately 163,000 pounds
of U3O8, which falls within the Company's
previously published guidance of 125,000 to 175,000 pounds of
U3O8 for the year ending December 31, 2020. The Company also recovered
approximately 67,000 pounds of high-purity vanadium pentoxide
("V2O5" or "black flake") during the
nine months ended September 30, 2020
from its vanadium Pond Return campaign, which was suspended during
the first quarter of 2020.
The Company has strategically opted not to enter into any
uranium sales commitments for 2020. Therefore, subject to general
market conditions, all 2020 uranium production is expected to be
added to existing inventories, which are expected to total between
670,000 and 700,000 pounds of U3O8 at
year-end. Both ISR and conventional uranium extraction and/or
recovery is expected to continue to be maintained at reduced levels
until such time that improvements in uranium market conditions are
observed or suitable sales contracts can be entered into. All
V2O5 production is expected to be sold on the
spot market if prices rise significantly above current levels, but
otherwise maintained in inventory.
ISR Activities
During the nine months ended September
30, 2020, the Company extracted and recovered approximately
6,000 pounds of U3O8 from its Nichols Ranch
Project, which was placed on standby during the first quarter of
2020, due to the depletion of its existing wellfields. This amount
of uranium production falls within the Company's published guidance
of approximately 6,000 pounds of U3O8 from
Nichols Ranch during the year ended December
31, 2020.
As of June 30, 2020, the Nichols
Ranch wellfields had nine header houses that previously extracted
uranium, which are now depleted. Until such time as improvement in
uranium market conditions is observed or suitable sales contracts
can be procured, the Company expects to defer development of
further header houses at its Nichols Ranch Project.
The Company expects to continue to keep the Alta Mesa Project on
standby until such time as improvements in uranium market
conditions are observed or suitable sales contracts can be
procured.
Conventional Activities
Conventional Extraction and Recovery Activities
During the nine months ended September
30, 2020, the Company produced 67,000 pounds of high-purity
V2O5 from its Mill Pond Return program
and 163,000 pounds of uranium from Alternate Feed Materials and
Pond Return activities. During 2020, the Company expects to recover
approximately 170,000 to 200,000 pounds of
U3O8 at the White Mesa Mill from in-circuit
uranium inventories extracted from the recent vanadium Pond Return
campaign, from Alternate Feed Materials and from other Pond Return
activities. In addition, there remains an estimated 1.5 to 3
million pounds of solubilized recoverable
V2O5 inventory remaining in the Mill's
tailings management facility awaiting future recovery from Pond
Return as market conditions may warrant, placing the Company in a
unique position to restart vanadium production quickly.
The White Mesa Mill has historically operated on a campaign
basis whereby uranium and/or vanadium recovery is scheduled as mill
feed, cash needs, contract requirements, and/or market conditions
may warrant. The Company currently expects that planned uranium
production from Alternate Feed Materials, Pond Return, and the
receipt of uranium-bearing materials from mine cleanup activities
will keep the Mill in operation through the remainder of 2020. The
Company is also actively pursuing opportunities to process new and
additional Alternate Feed Material sources and new and additional
low-grade ore from third parties in connection with various uranium
clean-up requirements. Successful results from these activities
would allow the Mill to extend the current campaign through 2020
and beyond. In addition, if improvements in uranium market
conditions are observed, or conventional mines are ramped up in
response to U.S. government actions to support domestic uranium
mining and/or recommendations of the U.S. Nuclear Fuel Working
Group, the Company would expect to be able to keep the Mill
operating over a considerably longer period of time. The Company is
also evaluating the recovery of REEs at the White Mesa Mill, which
if successful could allow the Company to keep the Mill operating
into the future.
Conventional Standby, Permitting and Evaluation
Activities
During the nine months ended September
30, 2020, standby and environmental compliance activities
continued to occur at the Canyon Project. Subject to general market
conditions, during 2020, the Company plans to continue carrying out
engineering, metallurgical testing, procurement and construction
management activities at its low-cost Canyon Project.
The Company is selectively advancing certain permits at its
other major conventional uranium projects, such as the Roca Honda
Project, a large, high-grade conventional project in New Mexico. The Company will also maintain
required permits at the Company's conventional projects, including
the Sheep Mountain Project, La Sal Complex, and Tony M, Whirlwind
and Daneros mines. In addition, the Company will 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 the
Company's forecasts. The Company is also in discussions with
several parties to potentially sell the Tony M, Daneros and other
non-material properties. The Company will only sell these
properties if sufficient cash and/or equity consideration is
received. All of these projects potentially serve as important
pipeline assets for the Company's future conventional production
capabilities, as market conditions warrant.
Sales
During the nine months ended September
30, 2020, the Company completed no uranium sales. The
Company currently has no remaining contracts, and therefore all
existing uranium inventory and future production is fully unhedged
to future uranium price increases.
During the nine months ended September
30, 2020, the Company did not complete the sale of any
vanadium. The Company expects to continue to sell finished vanadium
product, when justified, into the metallurgical industry, as well
as other markets that demand a higher purity product, including the
aerospace, chemical, and potentially the vanadium battery
industries. The Company expects to sell to a diverse group of
customers in order to maximize revenues and profits. The vanadium
produced in the recent Pond Return campaign was a high-purity
vanadium product of 99.6%-99.7% V2O5.
The Company believes there may be opportunities to sell certain
quantities of this high-purity material at a premium to reported
spot prices. The Company may also retain vanadium product in
inventory for future sale, depending on vanadium spot prices and
general market conditions.
The Company also continues to pursue new sources of revenue,
including additional Alternate Feed Materials and other sources of
feed for the White Mesa Mill, in addition to evaluating the
potential to recover REEs at the Mill.
The Company's Plans in Response to U.S. Government Actions
In response to potential Congressional appropriations for the
creation of a U.S. uranium reserve, and/or implementation of policy
recommendations contained in the U.S. Nuclear Fuel Working Group's
report, the Company is evaluating activities aimed towards
increasing uranium production at all or some of its production
facilities, including the currently operating White Mesa Mill, the
recently operating Nichols Ranch ISR Facility, and the Alta Mesa
ISR Facility, La Sal Complex and Canyon Mine, which are all
currently on standby, as market conditions may warrant. No
decisions on any project-specific actions have been made at this
time.
About Energy Fuels: Energy Fuels is a
leading U.S.-based uranium mining company, supplying
U3O8 to major nuclear utilities.
The Company also produces vanadium from certain of its projects, as
market conditions warrant, and is evaluating the potential to also
recover rare earth elements at its White Mesa Mill. Its corporate
offices are in Lakewood, Colorado
near Denver, and all of its assets
and employees are in the United
States. Energy Fuels holds three of America's key uranium
production centers: the White Mesa Mill in Utah, the Nichols Ranch in-situ recovery
("ISR") Project in Wyoming, and
the Alta Mesa ISR Project in Texas. The White Mesa Mill is the only
conventional uranium mill operating in the U.S. today, has a
licensed capacity of over 8 million pounds of
U3O8 per year, and has the ability to produce
vanadium when market conditions warrant. The Nichols Ranch ISR
Project is on standby and has a licensed capacity of 2 million
pounds of U3O8 per year. The Alta Mesa ISR
Project is also on standby and has a licensed capacity of 1.5
million pounds of U3O8 per year. In addition
to the above production facilities, Energy Fuels also has one of
the largest NI 43-101 compliant uranium resource portfolios in the
U.S. and several uranium and uranium/vanadium mining projects on
standby and in various stages of permitting and development. 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 Notes: This news release contains
certain "Forward Looking Information" and "Forward Looking
Statements" within the meaning of applicable United States and Canadian securities
legislation, which may include, but are not limited to, statements
with respect to: production and sales forecasts; costs of
production; 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 or in response to any
government actions to support U.S. uranium production; any
expectations regarding remaining dissolved vanadium in the White
Mesa Mill's tailings facility solutions, future vanadium production
opportunities, or the Company's ability to sell any of its vanadium
product at a premium to spot prices or otherwise; any expectation
as to the ability of the Company to secure any new sources of
alternate feed materials or other processing opportunities at the
White Mesa Mill; any expected timelines for the permitting and
development of projects; the Company's expectations as to longer
term fundamentals in the market and price projections; any
expectation that the Company will maintain its position as a
leading uranium company in the United
States; any expectation as to how the U.S. Nuclear Fuel
Working Group's recommendations will be implemented and the timing
of implementation; any expectation with respect to timelines
to production; any expectation that the Company may be able to sell
its uranium and vanadium inventories at potentially higher prices
in the future; any expectation that Congress will make the
requested appropriations for the proposed uranium reserve; any
expectation that the extended Russian Suspension Agreement is an
important step toward maintaining the long-term health of the U.S.
uranium mining industry; any expectation as to the Company's
ability to implement any additional cost-cutting measures; any
expectation that the recent management changes will reduce costs,
and flatten the Company's organizational structure; any expectation
that the Company may have the opportunity to process
uranium-bearing ores for the recovery of REEs, at all or on
commercial terms; and any expectation that the Company will be able
to recover REEs and/or uranium from such ores on a commercial
basis. 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,"
"budgets," "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; costs of production; 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 or in response to any government actions to
support U.S. uranium production; any expectations regarding
remaining dissolved vanadium in the White Mesa Mill's tailings
facility solutions, future vanadium production opportunities, or
the Company's ability to sell any of its vanadium product at a
premium to spot prices or otherwise; any expectation as to the
ability of the Company to secure any new sources of alternate feed
materials or other processing opportunities at the White Mesa Mill;
any expected timelines for the permitting and development of
projects; the Company's expectations as to longer term fundamentals
in the market and price projections; any expectation that the
Company will maintain its position as a leading uranium company in
the United States; any expectation
as to how the U.S. Nuclear Fuel Working Group's recommendations
will be implemented and the timing of implementation; any
expectation with respect to timelines to production; any
expectation that the Company may be able to sell its uranium and
vanadium inventories at potentially higher prices in the future;
any expectation that Congress will make the requested
appropriations for the proposed uranium reserve; any expectation
that the extended Russian Suspension Agreement is an important step
toward maintaining the long-term health of the U.S. uranium mining
industry; any expectation as to the Company's ability to implement
any additional cost-cutting measures; any expectation that the
recent management changes will reduce costs, and flatten the
Company's organizational structure; any expectation that the
Company may have the opportunity to process uranium-bearing ores
for the recovery of REEs, at all or on commercial terms; any
expectation that the Company will be able to recover REEs and/or
uranium from such ores on a commercial basis; and the other
factors described under the caption "Risk Factors" in the Company's
most recently filed Annual Report on Form 10-K, 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.
It should further be noted that the U.S Nuclear Fuel Working
Group's recommendations for direct government purchases of uranium
are subject to appropriation by the Congress of the United States, and there can be no
certainty of the outcome of the Working Group's recommendations.
Therefore, the outcome of this process remains
uncertain.
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SOURCE Energy Fuels Inc.