Review of the Press Release: Energy Fuels’ Toliara Project Development

Highlights

• Madagascar government lifts four-year suspension on Energy Fuels’ Toliara Project, enabling technical and environmental activities.
• Project will produce rare earth elements, titanium, and zirconium.
• Plans to process rare earths at White Mesa Mill in the US.
• Company aims for Financial Investment Decision in early 2026.
• Project aligns with global critical mineral and clean energy initiatives.

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Lakewood, Colorado-based Energy Fuels (opens in a new tab) (NYSE:UUUU (opens in a new tab)) (TSX:EFR (opens in a new tab)) reports that the Malagasy government has lifted a four-year suspension on the Toliara Project, signaling renewed confidence and cooperation between Energy Fuels and the government. This move allows Energy Fuels to recommence technical, social, and environmental activities, paving the way for a Financial Investment Decision (FID) in early 2026.

The company reports this news in a press release today (opens in a new tab).

Toliara Sands Project in Madagascar

Expansion of Project Scope

The Toliara Project includes the production of rare earth elements (REEs), titanium, and zirconium.  Plans to process rare earths at Energy Fuels’ U.S.-based White Mesa Mill underscore the project’s alignment with global supply chain demands, especially for clean energy technologies.

Significant Economic Potential

The Toliara Project is positioned as a cornerstone for Madagascar’s economic growth and a significant contributor to the global energy transition. The project promises sustainable mining practices, modeled on Energy Fuels’ successful operations at the Kwale project in Kenya.

The company announces its commitment to community and sustainability. Of course, these can be soft words with little meaning unless there is associated investment.

According to the company they have plans to re-establish community and social programs, reinforcing its focus on sustainable development and partnerships with host communities.

It’s all about the Rare Earths!

Rare earth elements from Toliara are vital for clean energy and high-tech industries, potentially enhancing the U.S.’s position in global critical mineral supply chains.

Progress Assessment & Acquisition Synergies

Energy Fuels’ recent acquisition of Base Resources brings proven expertise in titanium and zirconium mining, which could facilitate a smooth transition to sustainable operations in Madagascar.

Long-Term Vision

The project aligns with Energy Fuels’ strategy to diversify and secure critical mineral resources, reflecting its commitment to global clean energy initiatives.

Missing Information and Critical Questions

Rare Earth Exchanges raises some key missing information and critical questions for investors.  Under the topic of fiscal and regulatory terms What specific fiscal terms are under negotiation with the Malagasy government? How might these terms impact project profitability and timelines?

Are there guarantees for long-term stability in these agreements to ensure smooth operations and investor confidence?

Delving into environmental and social impact, what are the specific environmental measures and social programs to be reintroduced or developed under the resumed project? How does Energy Fuels plan to balance sustainable mining practices with large-scale resource extraction?

Conclusions

The resumption of the Toliara Project marks a significant milestone for both Energy Fuels and Madagascar. However, critical details about fiscal terms, permitting, and operational specifics are still missing and could affect timelines or profitability. Additionally, robust environmental, social, and community frameworks will be essential to avoid resistance and ensure long-term sustainability. As this project unfolds, close attention to government relations, stakeholder engagement, and global supply chain dynamics will be key to its success.

The Company

Energy Fuels is a leading US-based critical minerals company, focused on uranium, REEs, heavy mineral sands (“HMS“), vanadium and medical isotopes. The Company has been the leading U.S. producer of natural uranium concentrate for the past several years, which is sold to nuclear utilities that process it further for the production of carbon-free nuclear energy and owns and operates several conventional and in situ recovery uranium projects in the western United States. The Company also owns the White Mesa Mill in Utah (opens in a new tab), which is the only fully licensed and operating conventional uranium processing facility in the United States. At the Mill, the Company also produces advanced REE products, vanadium oxide (when market conditions warrant), and is preparing to begin pilot-scale recovery of certain medical isotopes from existing uranium process streams needed for emerging cancer treatments. The Company also owns the operating Kwale HMS project in Kenya which is nearing the end of its life and is developing three (3) additional HMS projects, including the Toliara Project in Madagascar, the Bahia Project in Brazil, and the Donald Project in Australia in which the Company has the right to earn up to a 49% interest in a joint venture with Astron Corporation Limited. The Company is based in Lakewood, Colorado, near Denver, with its heavy mineral sands operations primarily managed from Perth, Australia. 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.”

Financial Health?

Rare Earth Exchanges offers a review of Energy Fuels Inc.’s financial data, identifying areas of strength and concern.

On the strength side a review of their financials shows A) strong liquidity b) low debt levels and 3 promising market performance trends, along with strategic moves by the company and growth potential.  For example, the recent lifting of the suspension for the Toliara Project adds potential for future revenue generation, particularly in rare earth elements, which are crucial for the energy transition.

What are some problem areas and concerns?

First we found negative profitability metrics.   For example, on Profit Margin**:** -90.40% indicates the company is far from achieving profitability. On Operating Margin**:** -258.24%, showing inefficiencies in controlling costs relative to revenue.

The management also reports a decline in revenue. Quarterly Revenue Growth (YoY): -63.20%, reflecting a significant reduction in top-line performance compared to the previous year.  Revenue (TTM): $38.66M, which is modest for a company with a $1.34B market capitalization.

We also found negative cash flows: operating cash flow equals -$12.41M indicates the company is burning cash to sustain operations. Levered Free Cash Flow (TTM): -$44.23M further highlights concerns about cash usage.

Also, the company’s earnings are volatile. The company’s trailing P/E is unavailable, and forward P/E is a high 666.67, reflecting challenges in earnings predictability and high expectations for future performance.

A negative return on assets (-4.45%) and return on equity (-9.20%) indicate underperformance in utilizing assets and equity to generate returns.  Also looking at Short % of Float**:** 17.33% reflects skepticism among investors, with a significant portion of the float being shorted.

An absence of dividends might deter income-focused investors and reflects the company’s focus on reinvestment over shareholder returns.

In the table below Rare Earth Exchanges shares some critical questions for investors:

Critical Questions Topic	Some Details
Revenue Recovery Plan	What specific strategies are in place to reverse the declining revenue trend and improve profitability?How does the company plan to monetize the Toliara Project and other assets?
Operational Efficiency	With operating margins at -258.24%, what measures are being implemented to control costs and improve operational efficiency?
Cash Flow Management	Given the negative cash flow, how does the company plan to fund its ambitious projects without further diluting equity or taking on debt?
Sustainability of Market Valuation	With a price-to-sales ratio of 28.73, how does the company justify its high market valuation relative to current revenue levels?
Rare Earths and Growth Potential	How soon does the company expect revenue contributions from rare earth elements to materialize, and what proportion of total revenue do they anticipate rare earths will contribute?
Risk from High Short Interest	How is the company addressing the skepticism from short sellers, and what steps are being taken to instill confidence in its financial and operational strategy?

Conclusion

Energy Fuels Inc. demonstrates strong liquidity and low debt levels, providing a solid financial foundation. However, negative profitability, declining revenue, and high cash burn remain significant concerns. The successful execution of projects like Toliara and the expansion of rare earth production will be critical to reversing negative trends and justifying the company’s high valuation. Enhanced operational efficiency and a clear strategy to monetize its assets are essential for long-term sustainability.

Who are the biggest shareholders?

• Alps Advisors (6.66%)
• Mirae Asset Global Efts Holdings Ltd (5.74%)
• Blackrock Inc. (5.63%)
• Ameriprise Financial Inc. (4.06%)
• Vanguard Group Inc (3.21%)