Energy Fuels Timeline 2023 - Leading US Critical Mineral Supply Chain from Uranium to Rare Earths

About Energy Fuels‍

Energy Fuels is the largest uranium producer in the United States over the past five years. Headquartered in Colorado, the company operates three production facilities that have yielded over 30 million pounds of uranium since 2006. Beyond uranium, Energy Fuels also produces vanadium and is entering rare earth element (REE) production with the goal of becoming a “critical mineral hub". In 2023, the company acquired the Bahia Project in Brazil, an additional asset under its portfolio with significant titanium, zirconium, and REE resources.

Led by President & CEO Mark Chalmers, the company has existing long-term uranium delivery contracts with major US utilities through 2030. With the White Mesa Mill in Utah, Energy Fuels is the only conventional uranium mill operating in the US today and also has capabilities to produce rare earth oxides and vanadium.

What Happened in 2023?

December‍

Commencing Production on Three U.S. Uranium Mines

Restarting the production on three of its standby uranium mines (Pinyon Plain, La Sal and Pandora), Energy Fuels aims to produce 2-5 million pounds of uranium per year. Production methods include conventional mining, toll milling, and processing alternate feeds, allowing flexibility to ramp output up or down based on market conditions. 

The company has nearly one million pounds of uranium inventory ready for sale. For 2024, inventory and toll milling will make up a large portion of sales volumes while conventional mine production will also begin. Energy Fuels is also considering opening up toll milling capacity to regional miners lacking their own plants, allowing the purchase of ore to process and sell into term contracts.‍

Joint Venture for the Donald Mineral Sands

Energy Fuels entered a non-binding memorandum of understanding (MOU) with Australia's Astron Corporation to form a joint venture for the Donald Mineral Sands REE project in Australia. The deal would secure a major source of rare earth feedstock for Energy Fuels' emerging US-focused supply chain based at its White Mesa Mill.

The Donald Project could supply Energy Fuels with 7,000-14,000 tonnes per year of rare earth-bearing concentrate starting in 2026. Energy Fuels would invest $122 million for a 49% stake in the project and offtake rights over 100% of rare earth production. The Australian concentrate will feed into oxide separation equipment at White Mesa Mill, where Energy Fuels aims to produce 1,000-4,000 tonnes of rare earth oxides per year by 2027, reducing US dependence on China.‍

November‍

Ramping Up Production during Uranium Bull Run‍

As the uranium market entered a new bull run with prices needing to exceed $80-100/lb, Energy Fuels plans to ramp up existing assets including its White Mesa Mill - the only conventional uranium mill in the US - as well as several past-producing mines. The company commenced commercial REE carbonate production in 2021 at White Mesa and plans to potentially expand into REE separation. Energy Fuels aims to leverage its strong $200+ million cash position to pursue accretive acquisitions in uranium and REEs during a period of market volatility and government policies strengthening domestic critical mineral supply chains.‍

Q3 2023 Results: 180,000 Oz of Uranium Sold‍

Energy Fuels earned $10.5 million in net income in Q3 2023 driven by uranium sales and investment gains. The company sold 180,000 pounds of uranium for $10.5 million to a major U.S. nuclear utility, realizing a 50% gross profit margin. Energy Fuels holds nearly 600,000 pounds of uranium inventory available for additional sales. As an integrated U.S. critical minerals company with four conventional mines preparing for 2024 production, the company is positioned to benefit from rising global uranium prices stemming from increased demand and security concerns.‍

October‍

Phased Production Growth Plans, Leveraging Vertical Integration‍

Energy Fuels plans to restart uranium mining at two conventional assets to ramp up annual production to 1-2 million pounds by 2024. The infrastructure is in place for quick restarts and phased expansions, with potential to ultimately produce up to 5 million pounds per year. The company is also building out REE separation circuits at White Mesa in phases where phase one is underway with larger expansions planned to significantly boost rare earth processing capacity.

With over $200 million in working capital and no debt, Energy Fuels is funding growth from existing cash flows. The company has been profitable the past two years and Energy Fuels aims to grown into a “multi-billion dollar company” producing the critical minerals needed for the global transition to clean energy, strengthening nuclear power and electric vehicle demand.‍

Building Out Integrated Rare Earth Supply Chain‍

As the leading U.S. uranium producer, Energy Fuels aims to establish a fully integrated domestic rare earth supply chain to reduce reliance on China. The company can process rare earths from Monazite, a mildly radioactive mineral containing uranium at its White Mesa Mill. Energy Fuels has the expertise and facilities to handle the radioactivity and extract both rare earths and uranium. The company considers U.S. government collaboration to aid the scale-up of domestic rare earth and uranium capacity and leverage existing infrastructure to create integrated domestic supply chains for these strategic minerals.‍

September‍

Capitalizing Uranium & Rare Earths Markets

Though rare earth prices have fallen 50% from peaks, Energy Fuels is focused on securing feedstock supplies globally and continued to develop conventional uranium projects, securing long-term supply contracts, and maintaining skilled staff amid industry shortages.  With existing separation abilities at White Mesa Mill, the company takes advantage of a rebound in rare earth prices without new financing or construction. As the only U.S. company in both uranium and rare earth spaces, Energy Fuels provides unique exposure and upside leverage to expected price increases across multiple key minerals.‍

August

Q2 2023 Financial Results, Sale Completion of Alta Mesa ISR Uranium Project

In Q2 2023, Energy Fuels reported quarter revenue of $6.9 million, up 6% year-over-year. The company produced 355 tonnes of rare earth carbonate, selling 127 tonnes. As of June 30, 2023, the company holds cash and equivalents of $35.6 million. The company also completed the sale of its Alta Mesa ISR uranium project for $120 million, recognizing a $116.5 million gain on sale. It also sold its Prompt Fission Neutron technology used at Alta Mesa for $3.1 million and continues to enhance rare earth separation capabilities at its White Mesa Mill for commercial oxide production to start in late 2023.‍

July‍

Leveraging Existing Infrastructure

Energy Fuels, as the leading uranium producer in the US, positions itself to address critical mineral supply chain gaps. With existing infrastructure and expertise, Energy Fuels aims to scale production faster than competitors facing project delays in midst of cost inflation. In 2023, Energy Fuels invested $25 million to upgrade White Mesa for intermediate rare earth production from natural monazite sands and followed by separation of rare earth oxides. With this stepping stone approach, Energy Fuels can provide downstream processing for emerging rare earth miners lacking separation capabilities. The company continues to supply uranium under recently signed long-term agreements while also producing isotopes and vanadium.

With capabilities to produce over 10 different critical minerals, Energy Fuels offers unmatched leverage to the surging clean energy demand. The company's diverse production slate additionally provides revenue stability amid volatile markets.‍

Q1 2023 Results: Net Income of $114.26 million ‍

Energy Fuels announced its 2023 first quarter results, highlighting a net income of $114.26 million with $143.61 million in working capital. The company sold 300,000 pounds of uranium realizing $18.47 million in proceeds along with 79,344 pounds of vanadium. The company also completed the sale of its Alta Mesa property for a total gain of $116.45 million.

Additional Q1 highlights were 57% gross margins on product sales, a 10% increase in current assets, and reductions of 44% in total liabilities and 72% in current liabilities compared to year-end 2022. Inventory held at quarter-end included 847,000 pounds of finished uranium, 906,000 pounds of finished vanadium pentoxide, and 250 metric tons of rare earth carbonate. Energy Fuels continued active discussions with several additional suppliers of natural monazite around the world to significantly increase the supply of feed for the growing REE initiative.‍

April‍

US Utilities Engaging in Contract Negotiations‍

In recent years, Energy Fuels entered in supply contracts with utilities and obtain additional uranium inventory to sell with the increasing market prices. Beyond uranium, the company has entered the rare earth element market by leveraging its existing mining infrastructure and expertise. Many rare earth deposits are located alongside uranium, making expansion into this growing market logical. With rare earths crucial for electric vehicle components and wind turbines, surging demand is expected. Energy Fuels’ focus on long-term planning and investment provides a competitive advantage on their role on the critical mineral supply chain.‍

March

2022 Annual Report

Energy Fuels ended 2022 with a robust $116.97 million working capital and no debt. On the operations front, Energy Fuels proves to be the largest uranium producer in the US during 2022 at 162,000 pounds. Rare earth highlights included production of 205 metric tons of advanced rare earth carbonate and commencement of a separation circuit project expected to produce 800-1,000 tonnes per year of neodymium-praseodymium oxide by late 2023 to early 2024. 

The company also completed the profitable sale of 300,000 pounds of uranium to the US Uranium Reserve and announced the sale of its non-core Alta Mesa project for $120 million to fund growth. With significant achievements across its integrated critical minerals production, Energy Fuels enters 2023 well-positioned for continued cash flow and growth.‍

First-mover Advantage with Commercial-Scale Rare Earth Separation Capabilities‍

Following the annual Prospectors and Developers Association of Canada (PDAC) conference, Energy Fuels expressed confidence about ramping up uranium production in 2023 to fulfill several long-term supply contracts secured in 2022. Construction continued on its rare earth separation facility at White Mesa Mill with operations expected to begin in early 2023. This makes Energy Fuels the first U.S. company in years with commercial-scale separation capabilities.

Energy Fuels touted its first-mover advantage on the current supply chain vulnerability and domination by China. As the company ended 2022 as an exceptional year for permitting, the company eyes to achieve several key milestones over the next 12-18 months that will further enhance its position as a leading U.S. critical mineral producer. ‍

Controlling the Only Uranium Mill in the District‍

Energy Fuels maintains a strategic competitive advantage not easily replicated. Though some aspiring miners have attempted building new regional mills over the years, high capital requirements and lengthy permitting processes prove challenging. Having weathered the downturn by retaining skilled staff, Energy Fuels swiftly mobilizes already permitted and past-producing mines. The company continues targeting commercial rare earth production in 2023 through its mill, developing assets, and acquiring new projects.‍

February‍

Acquisition of Rare Earth and Heavy Mineral Project in Brazil‍

Energy Fuels announced the completion of its acquisition of the Bahia Project, a heavy mineral sand deposit in Brazil. The $21.9 million cash deal is expected to supply Energy Fuels with 3,000-10,000 metric tons per year of natural monazite concentrate for decades. Energy Fuels plans to process the concentrate which contains rare earth elements, uranium, titanium and zirconium at its White Mesa Mill in Utah. Combined with an existing supply deal with Chemours, the Bahia Project will significantly boost Energy Fuels’ access to low cost rare earth feedstock as it establishes an integrated U.S. supply chain.‍

Sales Completion of Alta Mesa Property to enCore Energy ‍

Energy Fuels completed the sale of its Alta Mesa ISR uranium project to enCore Energy for total gross proceeds of $120 million. The consideration consisted of $60 million in cash at closing and a $60 million secured convertible note payable in two years with an 8% annual interest rate. The note will be convertible into enCore common shares at a 20% premium the day before closing. The sale provided Energy Fuels with significant non-dilutive funding to expand its industry-leading US uranium production and complete the 'Phase 1' rare earth separation circuit at its White Mesa Milll to enable commercial-scale production of advanced rare earth materials for electric vehicles and renewable energy. ‍

January‍

Unique Uranium and Rare Earth Exposure: Overview

Supplying one-third of all domestic uranium over the past 15 years across key mining states, Energy Fuels aims to leverage its existing infrastructure to further establish itself as an integrated, low-cost U.S. rare earth producer. In two years at a capital cost under $20 million, the company plans to build separation facilities and produce rare earth oxides at commercial scale. Energy Fuels sold its Roca Honda uranium project to generate cash for its rare earth growth plans while minimizing dilution. Energy Fuels remain on track to start fulfilling major uranium contracts in 2023, and transform itself from being a pure-play uranium miner into a uniquely diversified U.S. critical minerals supplier with upside to both strengthening uranium and growing rare earth markets.‍

Delivering First Long-term Contract in 2023‍

Energy Fuels was awarded a contract to sell $18.5M of natural uranium concentrates (U₃O₈) to the U.S. government for the establishment of a strategic uranium reserve. The company is now rapidly expanding into the rare earth sector, leveraging its existing infrastructure to become an integrated, low-cost US rare earths producer. The company expects to start fulfilling major long-term uranium delivery contracts in 2023. 

Key milestones for investors to monitor are ramping up rare earth production on schedule and on budget in 2023-2024, advancing the Bahia rare earth project in Brazil, and expanding uranium output. Successful execution of these strategies transforms Energy Fuels into a uniquely diversified US critical minerals supplier and reduce shareholder dilution going forward.