Energy Fuels has achieved a very important milestone at its 100%-owned White Mesa mill in Utah, as it has made three separate commercial shipments last week including: 1) uranium concentrates, 2) vanadium pentoxide and 3) high-purity mixed rare earth element (REE) carbonate. We view the uranium and vanadium sales from its inventory as both opportunistic and unexpected; with V2O5 sales representing new revenue that wasn’t included in current guidance. The REE carbonate production seems to be going well with partial separation now underway. As prices have accelerated in each of the three segments, we believe Energy Fuels is setting the stage to become the largest producer of uranium, vanadium and REEs in the United States.
Tag: Energy Fuels Inc.
Energy Fuels reported FY’21 financial and operating results, highlighting earnings of $1.5M after a gain on disposal of its non-core assets to Consolidated Uranium Inc. (TSXV:CUR, BUY, C$4.15 target, David A. Talbot). In our view, investors are not buying EFR for its current financial results, but for its growth prospects, given that it has the only conventional uranium mill, modified to handle REE production, a couple of ISR plants and several uranium mines already permitted and on standby. We believe EFR is setting the stage to become the largest producer of uranium, vanadium, and rare earths, just as price seems to be accelerating in each segment.
This price increase is following a news article from Bloomberg yesterday speculating that the US might sanction Russian uranium supplier, which had previously been excluded from the Russian oil and gas import ban. UxC suggests that the article triggered a huge jump on Wednesday afternoon following its daily 2:30pm price cut-off. It appears that the response is mainly from traders bidding up the price.
Yesterday, Red Cloud hosted the first day of its three-day 2022 Very Pre-PDAC Mining Showcase, which featured 36 presenting uranium and battery metal companies including our keynote speakers Andrew Leyland, Head of Strategic Advisory at Benchmark Mineral Intelligence and Anna Bryndza, Executive Vice President at UxC, LLC and had over 1,000 participants registered in advance of the event. With this note, we want to provide a quick recap of the highlights from the conference for those who were unable to attend the live event. If you would like to attend Day Two and Three of Red Cloud’s 2022 Very Pre-PDAC Mining Showcase, register here. Replays are available on the Red Cloud website.
Uranium prices are up sharply on apparent Sprott Physical Uranium Trust (SPUT) buying as security of supply concerns emerge in light of economic sanctions levied against Russia in response to the Ukraine invasion. Funding of additional physical U3O8 purchases by SPUT may help propel prices above US$50/lb and perhaps close to incentive prices needed by project developers. We anticipate uranium equities to react very positively.
Energy Fuels has executed a Memorandum of Understanding (MOU) with Nanoscale Powders LLC for the development of what it calls an innovative rare earth element (REE) metal making technology. EFR believes that this technology has potential to revolutionize REE production by reducing costs, energy consumption and greenhouse gas emissions. Although there are likely to be hiccups along the way, we view this announcement positively as this patented technology can potentially provide Energy Fuels with a competitive advantage down the line once it starts producing REE metals and alloys, once it has perfected REE carbonate and then REE oxide production. With the recent pivot to REEs and with U3O8 prices rising to support uranium production from monazite and its pipeline of conventional and ISR uranium assets awaiting restart,we believe investors should keep a close eye on this multi-faceted company as it looks to establish the first, US based, fully integrated REE supply chain.
UT announced the filing of a Restated Base Shelf Prospectus. SPUT may now issue up to US$3.5B of units in Canada during a 25-month period starting 10-Aug-21. It had already approached its previous ceiling of US$1.3B. The At-The-Market program has also been updated. We view the potential for SPUT to raise further funds as very good news for the entire uranium sector.
Energy Fuels (EFR) Q3/21 financial results reported a net loss of $8.0M due to increased development expenditures and underutilized capacity production incurred in ramping up mixed REE carbonate production. Earnings are not as important during this period of transition for Energy Fuels as it awaits higher uranium prices and attempts to ramp up rare earth carbonate production. Uranium production remains largely on standby as prices recently rose >42% due to physical uranium buying in the spot market (read more). Meanwhile, attempts to ramp up RE carbonate production has been slower than expected due to delayed deliveries of monazite to site, but additional sources are being sought. We believe investors should keep a close eye on this multi-faceted company as it prepares to take advantage of rising U3O8 prices and looks to establish the first, US based, fully integrated REE supply chain.
Yesterday, Red Cloud hosted the third and final day of its three-day 2021 Oktoberfest Fall Mining Showcase, which featured 28 presenting companies including our keynote speaker John Ciampaglia, CEO of Sprott Asset Management, and had over 1,000 participants registered in advance of the event. With this note, we want to provide a quick recap of the highlights from the conference for those who were unable to attend the live event. A recap of our Day One and Day Two highlights can be found on our research portal page. Replays are also available on the Red Cloud website.