Energy Fuels - America's Only Uranium Mill Ramps Up Production to Establish Domestic Critical Minerals Hub

• Energy Fuels is focused on building America's critical minerals hub by producing uranium, rare earths, vanadium, and radium.
• The uranium market has entered a new bull cycle with prices rising but needs to reach over $80/lb to incentivize new production.
• Energy Fuels is well-positioned to increase uranium production from its existing mines as prices continue rising.
• The company is leveraging its strong balance sheet to evaluate acquisitions in uranium and rare earths at a time of market volatility.
• Bipartisan government support is growing for domestic production of uranium and rare earths, which benefits Energy Fuels' expansion plans.

About Energy Fuels

Energy Fuels Inc. (NYSE: UUUU) is a leading US-based uranium mining company. The company is building America’s critical minerals hub focused on producing uranium, rare earth elements, and potentially other critical minerals like vanadium and radium. Energy Fuels operates several past-producing mines in the Colorado Plateau region, including the White Mesa Mill - the only conventional uranium mill operating in the US. The company is well-positioned to supply uranium for the nation’s nuclear power industry and critical minerals needed for clean energy technologies and defense.

Interview with President & CEO, Mark Chalmers

Uranium Market Fundamentals Support Higher Prices

The uranium market has entered a new bull cycle, with spot prices increasing from around $30/lb a year ago to over $75/lb currently. Energy Fuels’ President and CEO Mark Chalmers believes prices need to reach at least $80/lb, and likely above $100/lb, to incentivize new mine production globally. At current levels, prices are still below the average total production costs for most projects. Mine production has been declining in recent years, and many of the best deposits are becoming depleted. Meanwhile, demand is increasing as countries like China and India build new reactors and nations push towards carbon-free electricity. This supply/demand imbalance supports substantially higher prices in the coming years.

Chalmers expects the uranium market today is slightly better prepared for a bull run compared to 2006-2007. However, he cautions there are still risks of underperformance from many newer projects that advertise aggressive production growth. Bringing new mines into production takes time and expertise, which many new entrants lack. Ultimately, he believes the market needs to reach an equilibrium price that incentivizes new long-term supply contracts at profitable levels for producers. This evolution will likely take some time, as current long-term contract prices still lag well below the spot market.

Energy Fuels is Well-Positioned to Benefit from Higher Uranium Prices

As a proven producer with decades of experience, Energy Fuels has significant advantages over less experienced uranium companies attempting to develop new projects. The company knows its assets extremely well, including accurate production costs and technical capabilities. Energy Fuels is able to ramp up production fairly quickly from its existing mines when prices reach sufficient levels. Many new market entrants promoting ambitious growth plans face much greater risks and uncertainty in actual execution.

Energy Fuels plans to resume production from its Pinyon Plain mine in Arizona and its La Sal Complex of mines in Utah. This will increase its production capacity by 30-40% without fully contracting that supply. The company’s strong balance sheet, with over $200 million in cash and marketable securities, allows it to begin mobilizing now in anticipation of further price increases and contract opportunities. Energy Fuels has upside to significantly boost output as market conditions evolve.

Rare Earths Provide Additional Exposure to Key Minerals

In addition to its core uranium business, Energy Fuels is growing its rare earth element (REE) production at the White Mesa mill. REEs are vital for clean energy, defense, and advanced technology applications. In 2021, the company commenced commercial production of a mixed REE carbonate. Energy Fuels is also evaluating expanding into separation of REEs in the coming years.

The REE market has seen a pullback in prices over the past year after a strong run-up in 2020-2021. This creates potential opportunities for Energy Fuels to acquire additional REE resources at attractive valuations. The company can leverage its healthy balance sheet and stock price for any accretive acquisitions. Boosting REE resources and production will complement Energy Fuels’ uranium business and establish the US as a key global supplier of magnet REEs required in electric vehicles, wind turbines, consumer electronics, and defense systems.

Strong Government Support for Domestic Critical Minerals

There is rapidly growing bipartisan support within the US government to rebuild domestic critical minerals supply chains. Policies like the Inflation Reduction Act provide large incentives for producing metals and minerals vital for clean energy and national security within the country and with allies. Energy Fuels is actively engaging with US state and federal lawmakers to access government assistance programs aimed at encouraging domestic critical mineral production.

As one of the few existing US producers of uranium and rare earths, Energy Fuels is well-positioned to benefit from emerging government initiatives. In 2021, the company completed a 3-year test mining program at its Pinyon Plain Mine in Arizona funded by the US Department of Energy. Government financial support can help offset costs as Energy Fuels scales up production of uranium, REEs, and other minerals to strengthen American supply chains.

Conclusion

Energy Fuels Offers Leveraged Exposure to Rising Uranium and REE MarketsEnergy Fuels is an attractive investment opportunity offering investors leveraged exposure to rising uranium prices and growing demand for domestically-produced rare earth elements. The company has extensive experience operating conventional uranium mines that can ramp up relatively quickly to take advantage of higher prices. Energy Fuels is also expanding into REE production and working closely with US government programs aimed at rebuilding domestic critical mineral supply chains.

With a strong cash position and proven track record, Energy Fuels has significant advantages compared to less experienced uranium developers attempting to build new mines. As uranium and REE markets tighten in coming years, Energy Fuels appears well-positioned to increase production from its existing assets in the US. The company’s diversified critical minerals production strategy offers investors upside to strengthening markets for uranium, REEs, and other vital elements. Energy Fuels has the potential to become America’s leading independent critical minerals hub supplying key domestic industries and defense needs.