Energy Fuels (AMEX:UUUU) - Riding the Uranium Wave in Preparation for Rare Earths Rebound

• Energy Fuels generated $100M net income in 2023 from over 560,000 pounds of uranium produced for the year.
• The company is ramping uranium output to 1.1-1.5M lbs/yr, with plans to reach 2 million lbs.
• Existing mills and mines enable quick production growth, allowing Energy Fuels to be in a position to acquire rare earth assets while valuations are depressed.
• Diversified critical mineral production mitigates risk as an integrated producer of both uranium and rare earths.
• Management focuses on plans for long-term uranium and rare earth strategies.

Profitable Uranium Production Ramping Up

Energy Fuels has seen great success with its uranium business in 2023, generating a record $100 million in net income. The company produced 560,000 pounds of uranium last year and is now focused on ramping up profitable uranium production at its mines to 1.1-1.5 million pounds per year initially, with plans to reach 2 million pounds.

As CEO Mark Chalmers stated, “We had a smashing 2023 with a $100 million net income and we've got over $250 million in treasury so we're excited about that and we continue building into 2024.”

With its White Mesa Mill, Energy Fuels has flexibility to process material from its own mines as well as from third-party producers through buying agreements and toll milling contracts. This enables the company to optimize its uranium production and feed its mill at capacity.

Interview with President & CEO Mark Chalmers

Capitalizing on Low Rare Earths Prices

While uranium prices have been strong, rare earths prices have fallen dramatically over the past two years. However, Chalmers sees this as an opportunity for Energy Fuels:

“Now is actually a pretty good time to buy rare earth companies or come up with some arrangement with those rare earth companies.”

With its profitable uranium business and $250 million treasury, Energy Fuels is well-positioned to make strategic acquisitions in the rare earths space at depressed valuations. The company is also on track to commission its rare earths separation facility at White Mesa Mill in the coming weeks, helping integrate its upstream and downstream rare earths capabilities.

Uniquely Positioned With Diversified Critical Minerals Production

As an integrated producer of both uranium and rare earths, Energy Fuels stands out from other mining companies focused on a single critical mineral. Its diversified production helps mitigate risk, while uranium cash flows support rare earths growth opportunities.

Chalmers emphasized the advantages of this strategy: “We are looking at a company that is diversified, that has sustained power and profitability, earnings per share over the long haul.”

With permitted infrastructure, technical expertise, and financial strength, Energy Fuels can be selective in which assets it chooses to acquire, focusing only on the highest quality uranium and rare earths projects globally.

The Investment Thesis for Energy Fuels

• Energy Fuels offers diversified exposure to two critical minerals - uranium and rare earths - primed for growth amid decarbonization and electrification trends.
• With an existing profitable uranium business, Energy Fuels has the financial flexibility to invest in strategic rare earths acquisitions at an opportune time when valuations are depressed.
• The company's integrated business model mitigates risk and enables greater capture of value across the supply chain.
• Energy Fuels production can ramp up quickly with minimal capital expenditure using existing White Mesa mill capacity and permitted mines.
• Management has proven experience executing long-term strategies in uranium and rare earths markets.

Energy Fuels is an attractively positioned mining company with diversified critical minerals production, financial strength, and significant growth potential. With uranium powering its bottom line and rare earths offering undervalued opportunities, Energy Fuels can capitalize on market dynamics in both sectors. For investors seeking leverage to decarbonization and electrification megatrends, Energy Fuels provides unique exposure supported by real assets and cash flows.