Energy Fuels Expands into Medical Isotopes Market with RadTran Acquisition

• Energy Fuels acquires RadTran LLC to enhance medical isotope capabilities with the aim to address global shortage of isotopes for targeted alpha therapies.
• The acquisition targets production of Ra-226 and Ra-228 for cancer treatments which were hindered by delayed trials and commercial availability of these potentially life-saving drugs.
• Initial R&D production is expected in 2024 and commercial production planned for 2026-2028.
• This acquisition includes up to $17 million in cash and stock plus royalties opening up new revenue streams for the company and its investors.

Energy Fuels (NYSE:UUUU) is a leading U.S.-based critical minerals company and the leading producer of uranium in the United States, producing natural uranium concentrates for major nuclear utilities. The company has recently expanded into rare earth element (REE) production and is evaluating the recovery of radionuclides for cancer treatments. With its corporate offices in Lakewood, Colorado, Energy Fuels operates key uranium production centers, including the White Mesa Mill in Utah and the Nichols Ranch in-situ recovery Project in Wyoming. The company also holds a significant uranium resource portfolio in the U.S. and has recently acquired the Bahia Project in Brazil, which is rich in titanium, zirconium, and REE minerals.

Energy Fuels Inc. has taken a significant step towards diversifying its portfolio and addressing a crucial global need in the medical field. On August 2024, the company acquired RadTran LLC, a private firm specializing in the separation of critical radioisotopes. This strategic move is aimed at enhancing Energy Fuels' capabilities in the production of medical isotopes used in emerging cancer treatments, potentially opening up new revenue streams for the company and its investors.

The Strategic Significance of the RadTran Acquisition

The acquisition of RadTran LLC marks a pivotal moment for Energy Fuels as it seeks to position itself as a leader in the emerging field of medical isotope production. RadTran's expertise in separating radium-226 (Ra-226) and radium-228 (Ra-228) from uranium and thorium process streams aligns perfectly with Energy Fuels' existing capabilities and infrastructure.

Mark Chalmers, President and CEO of Energy Fuels, emphasized the strategic importance of this acquisition:

"We believe this combination of our unique processing capabilities at the White Mesa Mill with RadTran's intellectual property and medical isotope experience will position Energy Fuels to be a leader in this developing industry."

The primary focus of this acquisition is to address the global shortage of essential isotopes used in targeted alpha therapies (TAT) for cancer treatment. By leveraging RadTran's technology and Energy Fuels' existing process streams, the company aims to recycle material that would otherwise be lost to disposal, repurposing it for life-saving cancer treatments.

Addressing a Critical Market Need

The global medical community is facing a significant challenge in the form of a shortage of Ra-226 and Ra-228, which are critical components in the production of actinium-225 (Ac-225) and lead-212 (Pb-212). These isotopes are essential for the development of targeted alpha therapies, offering promising new treatments for various cancers.

Currently, more than 30 clinical trials are evaluating Ac-225, with several reaching the final pre-approval stage for treating neuroendocrine tumors and leukemia. However, the shortfall in Ac-225 production, primarily due to the limited availability of Ra-226, is delaying trials and hindering the transition to full commercial and clinical availability of these potentially life-saving drugs.

Energy Fuels' entry into this market is timely and strategically significant. By addressing this supply bottleneck, the company not only opens up a new revenue stream but also positions itself as a key player in supporting the development of cutting-edge cancer therapies.

Research & Development Plans

Energy Fuels has already made significant progress in preparing for medical isotope production. The company received regulatory approval and licensing in 2023 for the concentration of R&D quantities of Ra-226 at its White Mesa Mill. Currently, Energy Fuels is completing engineering on its research and development (R&D) pilot facility for Ra-226 production.

The company's immediate plans include:

• Setting up the first stages of the pilot facility in 2024
• Producing R&D quantities of Ra-226 for testing by end-users
• Developing capabilities for commercial-scale production of Ra-226 and potentially Ra-228 in 2026-2028

It's important to note that the transition to commercial production is conditional on several factors, including the completion of engineering design, securing sufficient offtake agreements, and obtaining all required regulatory approvals.

Financial Implications of the Acquisition

The acquisition of RadTran involves a structured payment plan that aligns the purchase price with key performance milestones. The initial payment includes $1.5 million in cash, $1.5 million in Energy Fuels common shares and a 2% royalty on future revenues from the sale of produced radium.

Additionally, the agreement includes up to $14 million in cash and common shares based on achieving specific performance-based milestones, such as initial production, securing suitable offtake agreements, and reaching commercial production.

This structure demonstrates Energy Fuels' commitment to the project while also protecting shareholder interests by tying significant portions of the payment to successful outcomes.

Enhancing Human Capital

As part of the acquisition, Saleem Drera PhD, President and CEO of RadTran, will join Energy Fuels as Vice President of Radioisotopes, Radiological Systems, and Intellectual Property. This addition to the leadership team brings valuable expertise and will drive the integration of RadTran's proprietary technology into Energy Fuels' operations.

Dr. Drera's role will be crucial in leveraging RadTran's patents, pending patents, trade secrets, and know-how related to the efficient separation of Ra-226 and Ra-228 from process streams. His leadership is expected to accelerate innovation in the production of medical radioisotopes within Energy Fuels.

Market Potential & Future Outlook

The market for medical isotopes, particularly those used in targeted alpha therapies, is poised for significant growth. With numerous clinical trials underway and the potential for breakthrough cancer treatments, the demand for isotopes like Ra-226 and Ra-228 is expected to increase substantially in the coming years.

Energy Fuels is positioning itself to be a key supplier in this growing market. By leveraging its existing infrastructure at the White Mesa Mill and combining it with RadTran's expertise, the company aims to create a new revenue stream that complements its core uranium and rare earth element businesses.

The potential for this new venture is substantial, considering the current global shortage of these critical isotopes and the life-saving nature of their applications. Success in this field could not only diversify Energy Fuels' revenue sources but also enhance its profile as a socially responsible company contributing to advancements in cancer treatment.

Risks and Considerations

While the acquisition of RadTran and the entry into the medical isotope market present significant opportunities, investors should be aware of potential risks:

• Regulatory hurdles: The production of medical isotopes is highly regulated, and any delays in obtaining necessary approvals could impact the timeline for commercial production.
• Technical challenges: Scaling up from R&D to commercial production may present unforeseen technical difficulties.
• Market competition: As the potential of targeted alpha therapies becomes more widely recognized, other companies may enter the market, potentially affecting pricing and market share.
• Capital requirements: The development of commercial-scale production facilities may require significant capital investment.
• Offtake agreements: The success of the venture will depend on securing long-term offtake agreements with pharmaceutical companies and medical institutions.

Conclusion for Investors

Energy Fuels' acquisition of RadTran LLC represents a strategic move into a high-potential market that aligns well with the company's existing capabilities and infrastructure. For investors, this venture offers several key considerations:

• Diversification: The entry into medical isotope production provides a new potential revenue stream, diversifying the company's portfolio beyond uranium and rare earth elements.
• Market growth potential: The increasing demand for targeted alpha therapies in cancer treatment suggests a growing market for medical isotopes.
• Synergy with existing operations: The ability to recover valuable isotopes from existing process streams at the White Mesa Mill could lead to improved operational efficiency and resource utilization.
• Social impact: Involvement in the production of materials for cancer treatments enhances the company's profile as a contributor to critical medical advancements.
• Long-term value creation: Success in this venture could position Energy Fuels as a key player in a niche but crucial market, potentially leading to long-term value appreciation for shareholders.

While the full financial impact of this acquisition may not be immediately reflected in the company's bottom line, it represents a forward-thinking strategy that could yield significant returns in the medium to long term. Investors should monitor the progress of the R&D phase and subsequent moves towards commercial production as indicators of the venture's success.

As with any new business venture, particularly in a highly specialized field like medical isotopes, investors should carefully consider the risks alongside the potential rewards. Energy Fuels' established position in the uranium industry provides a stable foundation as it ventures into this new and promising market.