Energy Fuels Secures Australian Rare Earth Project to Feed Emerging US Supply Chain

• Energy Fuels entered an MOU with Astron to develop the Donald Mineral Sands Project in Australia, securing a large source of rare earth minerals.
• The project could supply Energy Fuels with 7,000-14,000 tonnes per year of rare earth-bearing concentrate starting in 2026.
• This will feed into Energy Fuels’ new US-based rare earth supply chain based at their White Mesa Mill.
• Between the Donald Project and Energy Fuels’ Bahia Project in Brazil, the company will control 10,000-24,000 tonnes per year of concentrate.
• The deal furthers Energy Fuels’ strategy of creating an integrated rare earth supply chain in the US spanning mining to oxides.

About Energy Fuels and the Donald Project Joint Venture

Energy Fuels Inc. (NYSE American: UUUU) is a leading US producer of uranium and rare earth elements. The company has entered a non-binding MOU with Astron Corporation (ASX: ATR) to form a joint venture covering the Donald Mineral Sands Project, a large heavy mineral sand deposit in Australia.

The joint venture, if finalized, would develop the project in two phases, ultimately producing 400,000-500,000 tonnes per year of heavy mineral concentrate and 13,000-14,000 tonnes per year of rare earth concentrate containing key magnet metals neodymium, praseodymium, dysprosium and terbium. Energy Fuels would invest US$122 million to earn a 49% interest in the project and offtake 100% of rare earth production.

Securing Large-Scale Rare Earth Supply

The Donald Project in Australia represents a major rare earth supply source for Energy Fuels’ emerging US-focused rare earth supply chain. Covering 309 million tonnes of reserves grading 4.4% heavy minerals, the project can produce a rich rare earth concentrate through simple physical separation.

At full production in Phase 2, the project could supply Energy Fuels with up to 14,000 tonnes per year of rare earth concentrate containing over 8,000 tonnes of total rare earth oxides. The concentrate has high ratios of key magnet rare earths like neodymium, praseodymium, dysprosium and terbium that are critical for electric vehicles and wind turbines.

This large quantity will make a major contribution to fulfilling Energy Fuels’ objective of creating an integrated mine-to-oxide rare earth supply chain in the United States that can reduce dependence on China.

Complementing Brazil Production

The Donald Project concentrate will complement supplies from Energy Fuels’ recently acquired Bahia Project in Brazil. That project, which Energy Fuels owns outright, is expected to produce around 10,000 tonnes per year of total rare earth oxides starting in 2026 through mining of mineral sands.

Between these two assets, Energy Fuels will control around 10,000 to 24,000 tonnes per year of rare earth feed over the long term. The company will continue seeking additional supply sources globally as it builds out refining capacity at its White Mesa Mill in Utah.

Key Details of the Joint Venture

Under the non-binding MOU, Energy Fuels and Astron Corporation will create an Australia-incorporated joint venture entity to develop the Donald Project. Key terms of the contemplated joint venture are:

• Energy Fuels will invest US$122 million to earn a 49% interest in the project. The investment will fund a significant portion of capital costs to develop Phase 1 production.
• Astron will be the manager and operator but major decisions will require joint approval.
• Energy Fuels will offtake 100% of rare earth concentrate production at market prices. Astron may offtake up to 100% of heavy mineral concentrate.
• Profits after expenses will be distributed pro-rata to ownership.
• Energy Fuels gets a first right of refusal over Astron’s nearby Jackson deposit that could become an additional rare earth source.

The MOU sets out an exclusivity period for Energy Fuels to complete due diligence and finalize definitive agreements by March 1, 2024. Formation of the joint venture remains subject to satisfactory due diligence, negotiation of binding agreements, and board approvals.

Feeding the Emerging US Rare Earth Supply Chain

The Australian concentrate will feed into Energy Fuels’ emerging US-based rare earth supply chain centered on the White Mesa Mill in Utah. The only operating conventional uranium mill in the US, White Mesa is an ideal location to process rare earth ores due to existing infrastructure, licenses, and expertise handling radioactive materials.

Energy Fuels is installing equipment at the mill to produce separated rare earth oxides from concentrations like those from the Donald Project. An initial phase coming online in 2024 will produce 1,000 tonnes per year of neodymium-praseodymium oxide, rising to 3,000-4,000 tonnes by 2027 once a full separation circuit is complete. Ultimately Energy Fuels plans to produce heavy rare earth oxides like dysprosium and terbium as well.

The White Mesa Mill creates a clear pathway for miners like the Donald Project to convert rare earth ores into high-purity oxides ready for us in electric vehicle motors, wind turbines, and other applications. Integration in the US mitigates reliance on China and secures domestic clean energy supply chains.

Conclusion

The Donald Project joint venture ticks many boxes that support Energy Fuels’ investment case and emerging US-focused rare earth strategy. It provides:

• Large-scale, low-cost rare earth feed to accelerate US refining growth
• Key magnet rare earths neodymium and praseodymium for electric vehicles
• Future supply of heavy rare earths dysprosium, terbium once separation circuits are installed
• Complementary production to the Bahia Project in Brazil
• Significant shareholder value potential if Energy Fuels creates integrated US supply chains

Investors wanting exposure to the booming rare earth market can position in Energy Fuels at an early stage as it builds out a new US rare earth business spanning mining to oxides based out of the White Mesa Mill. With considerable existing infrastructure plus uranium and vanadium businesses, Energy Fuels aims to become a major US supplier of minerals critical for clean energy.