Rare Earth Exchanges

Energy Fuels Inc Provides Financial Results, Emphasizes Move into Rare Earth Elements

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Highlights

  • Energy Fuels reports Q3 2024 financial results, showcasing uranium sales, REE production achievements, and strategic acquisitions in rare earth and heavy mineral sands projects.
  • The company successfully commissioned its Phase 1 REE separation circuit, producing 38 tons of separated NdPr, and is expanding its processing capacity to capture market share.
  • Energy Fuels maintains a strong balance sheet with over $180 million in liquidity, no debt, and is advancing multiple projects in uranium, rare earths, and heavy mineral sands.

Publicly traded Energy Fuels Inc (opens in a new tab). (NYSE American: UUUU) (TSX: EFR) (“Energy Fuels” or the “Company**”),** calling itself an industry leader in uranium and rare earth elements (“REE”) production reports its financial results for the quarter ended September 30, 2024. The Company previously announced details for its upcoming November 1, 2024, earnings call, which are also included in the firm’s news release.

The company positions itself as a leading uranium producer, and increasingly brand the ability to produce important rare earth materials at commercial scale with the completion and successful commissioning of their REE separation circuit this quarter.

Also, on the REE front the company’s CEO touted that they are aggressively moving forward with plans to secure rare earth feedstocks globally while expanding their processing capacity domestically in order to capture market share and achieve profitability.

They acquired (opens in a new tab) Base Resources Limited and its notable Toliara heavy mineral sands/monazite project (opens in a new tab) in Madagascar on October 2, 2024.

According to Mark Chalmers, Energy Fuels’ President, and Chief Executive Officer “Uranium drives our current financial outlook, while rare earth elements and heavy mineral sand products are significantly adding to our long-term value and growth strategy.” 

What was the company able to accomplish this quarter? According to the CEO they were able to:

  • Maintain clean balance sheet
  • Add a new long-term U.S. utility customer
  • Complete another spot sale of U3O8, and commencing processing of the large inventory stockpile of uranium feedstock at the White Mesa Mill, which is expected to continue well into 2025 and beyond

What is the core to the firm’s fuelbusiness?

Uranium production is, and will remain, the core of the Energy Fuels’ business, as they leverage what they position as unique permits, facilities, and expertise to process uranium-bearing materials to produce a variety of critical materials that advance the global energy transition through an American-based supply chain.

“We invite all stakeholders to join us in our upcoming November 1, 2024, earnings call, details of which are below, to learn more about these exciting achievements.”

Some of the firm’s Q3-2024 Highlights

  • Robust Balance Sheet with Over $180 million of Liquidity and No Debt: As of September 30, 2024, the Company had $183.16 million of working capital including $47.46 million of cash and cash equivalents, $101.15 million of marketable securities (interest-bearing securities and uranium stocks), $35.91 million of inventory, and no debt.
  • Over $10 Million of Additional Liquidity from Market Value of Inventory: On October 28, 2024, commodity prices, the Company’s product inventory has a market value of approximately $23.79 million, while the balance sheet reflects product inventory carried at cost of $13.38 million.
  • Incurred Net Loss of $12 Million: During the three months ended September 30, 2024, the Company incurred a net loss of $12.08 million, or $0.07 per common share, primarily due to transaction and integrations costs related to the Donald Project joint venture (described below), the acquisition of Base Resources (described below) and recurring operating expenses, partially offset by sales of natural uranium concentrates (“U3O8“).
  • Uranium Continues to Drive Revenue: The Company sold50,000 pounds of U3O8 on the spot market at arealized sales price of $80.00 per pound of U3O8 for total proceeds of $4.00 million, which resulted in a gross profit of $2.15 million and a gross margin of 54%.
  • New Long-Term Uranium Sales Contract with U.S. Utility: The Company added a fourth long-term uranium sales contract to its existing portfolio. Under the contract, the Company expects to deliver a total of 270,000 to 330,000 pounds of uranium between 2026 and 2027, and potentially an additional 180,000 to 220,000 pounds until 2029, under a “hybrid” pricing formula, subject to floor and ceiling prices, that maintains exposure to further uranium market upside and protection from inflation.
  • “Phase 1” REE Separation Circuit Successfully Commissioned: Final commissioning of the Phase 1 REE separation circuit at the Company’s White Mesa Mill (the “Mill“) was successfully completed during the quarter resulting in the production of approximately 38 tons of ‘on-spec’ separated NdPr.
  • Samples of NdPrActively Being Qualified by Potential Customers: NdPr produced at the Mill is currently being qualified with permanent magnet manufacturers and other potential customers to set the stage for potential offtake in the future.
  • Well-Stocked to Capture Market Opportunities: As of September 30, 2024, the Company held 235,000 pounds of finished U3O8 and 805,000 pounds of U3O8 in ore and raw materials and work-in-progress inventory for a total of 1,040,000 pounds of U3O8 in inventory. This inventory increased from last quarter due to Pinyon Plain, La Sal and Pandora mine ore production and additional alternate feed materials received, partially offset by our spot sale during Q3-2024. The Company expects these uranium inventories to continue increasing as we continue to mine additional ore. The Company also held 905,000 pounds of finished vanadium (“V2O5“), 38 tons of finished separated neodymium praseodymium (“NdPr“) and 9 tons of finished high purity, partially separated mixed rare earthcarbonate (“RE Carbonate“) ininventory.

Rare Earth Element Production Milestones

  • The Company produced about 38 tons of separated NdPr from its newly commissioned Phase 1 REE separation circuit at the Mill in Q2- and Q3-2024.
  • Samples of the Company’s NdPr product have been sent to permanent magnet and other companies around the world for product qualification, and initial testing responses have been positive.
  • The Company is currently in the process of updating the White Mesa Mill’s AACE International (“AACE“) Class 4 Pre-Feasibility Study (not a Pre-Feasibility Study subject to or intended to be compliant with NI 43-101 or S-K 1300), originally released in Q2-2024 to increase throughput to a total of 60,000 tpa of monazite, producing roughly 6,000 tpa of NdPr, 150 to 225 tpa of Dy, and 50 to 75 tpa of Tb, of which the existing commissioned Phase 1 circuitwill constitute about 17% of this amount (10,000 tpa of monazite). TheMill PFS referenced above can be viewed on the Company’s website, www.energyfuels.com (opens in a new tab).

Heavy Mineral Sands

  • On October 2, 2024, the Company announced it completed its previously announced acquisition of all the issued and outstanding shares of Base Resources Ltd. (“Base Resources“), which is expected to transform the Company into a global leader in critical minerals production, including HMS (titanium and zirconium), REEs and uranium. The acquisition of Base includes the advanced, world-class Toliara HMS project in Madagascar. In addition to its stand-alone, ilmenite, rutile (titanium) and zircon (zirconium) productioncapability, the Toliara Project also contains a long-life, high-valueand low-cost monazite (REEs) stream, produced as a byproduct of primary titanium and zirconium production. Toliara’s monazite is expected to be processed at the Mill into separated REE products, along with uranium, at globally competitive capital and operating costs. The Toliara Project is subject to negotiation of fiscal terms with the Madagascar government and the receipt of certain Madagascar government approvals and actions before a current suspension on activities at the Toliara Project will be lifted and development may occur. The transaction also includes Base’s management, mine development and operations teams, who have a successful track-record of designing, constructing, and profitably operating a world-class HMS operation in Kenya.
  • The Company continued to advance the Donald Project (the “Donald Project“), a large monazite-rich HMS project in Australia, pursuant to its joint venture with Astron Corporation limited, announced in Q2-2024. The Company expects that a final investment decision (“FID“) will be made on the Donald Project as early as 2025.
  • During Q3-2024, the Company also continued to advance its whollyowned Bahia HMS project in Brazil (the “Bahia Project“) with its Phase 2 drilling campaign, which is expected to continue through the rest of the year. Additionally, the Company completed bulk test work on a 2.5-ton sample in March 2024, and recently shipped a larger 15 ton sample to the U.S. for additional process test work. The Company expects to complete a U.S. Subpart 1300 of Regulation S-K (“S-K 1300“) and Canadian National Instrument 43-101 (“NI 43-101“) compliant mineral resource estimate on the Bahia Project during 2024.

Vanadium Highlights

  • The Company chose not to execute any vanadium sales during Q3-2024 and holds about 905,000 pounds of V2O5 in inventory.
  • As of October 28, 2024, the spot price of V2O5 was $5.25 per pound, accordingto data from Fastmarkets.

Medical Isotope Highlights

  • On August 19, 2024, the Company announced it acquired RadTran LLC (“RadTran“), a private company specializing in the separation of critical radioisotopes, to further the Company’s plans for development and production of medical isotopes used in cancer treatments. RadTran’s expertise includes separation of radium-226 (“Ra-226“) and radium-228 (“Ra-228“) from uranium and thorium process streams. This acquisition is expected to significantly enhance Energy Fuels’ planned capabilities to address the global shortage of these essential isotopes used in emerging targeted alpha therapies (“TAT“) for cancer treatment.
  • The Company continues to utilize its research and development (“R&D“) license for the recovery of R&D quantities of Ra-226 at the Mill. Activities to set up the pilot facility at the Mill continued in Q3-2024 and are expected to progress through the end of the year, with the goal of producing R&D quantities of Ra-226 for testing by end-users of the product in late 2024 or early 2025.

The Company

Energy Fuels Inc (opens in a new tab). was incorporated in 1987 by George E. L. Glasier and John David Mason. The company changed its name from Volcanic Metals Exploration Inc. to Energy Fuels Inc. in May 2006. 

Energy Fuels is a uranium mining company that explores, develops, and sells uranium and vanadium properties in the United States. They also produce and sell rare earth elements, vanadium pentoxide, and heavy mineral sands. Energy Fuels operates mines in Colorado, Utah, and Wyoming, and the White Mesa Mill in Utah (opens in a new tab) is the only conventional uranium mill in the U.S.

Priced at $5.60 as of this article on Sunday Nov 3, 2024, the firm’s 52-week range equals 4.19 – 8.68.  With a$1.1 billion market capitalization, their revenues are estimated at$38.6 million with forecast losses of $34.9 million. With $148 million in the bank, about 15.74% of the outstanding stock are owned by short sellers.

Top institutional owners include Alps Advisors Inc. (6.19%), Mirae Asset Global ETFs Holdings Ltd (6.12%), Blackrock Inc (4.95%); Ameriprise Financial Inc (4.19%) and Vanguard Group (3.08%).

While this company is more than just rare earth elements, this website focuses on that topic. When reviewing rare earth company stocks keep in mind this involves a mix of macroeconomic factors, geopolitical influences, and company-specific financial and operational metrics. Carefully consider both industry-wide and company-specific factors to gain a comprehensive understanding of the potential risks and rewards.

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