LAKEWOOD, CO, Nov. 5, 2015 /CNW/ - Energy Fuels Inc.
(NYSE MKT:UUUU; TSX:EFR) ("Energy Fuels" or the "Company"),
today reported its financial results for the three months ended
September 30, 2015. The
Company's Quarterly Consolidated Financial Statements, along with
Management's Discussion and Analysis are available through its
filings with the securities regulatory authorities in Canada on the System for Electronic Document
Analysis and Retrieval ("SEDAR") and may be viewed at
www.sedar.com, and in the United
States on the Electronic Document Gathering and Retrieval
System ("EDGAR") which, along with the Company's quarterly report
on Form 6-K, may be viewed at www.sec.gov/edgar.shtml, and on the
Company's website at www.energyfuels.com. Unless noted
otherwise, all dollar amounts are in US dollars.
Stephen P. Antony, the Company's
President and CEO stated: "Energy Fuels achieved a number of
important milestones this past quarter as we continue to execute
our disciplined and flexible business plan. As we
successfully integrate Uranerz into our operations, we are
expanding uranium production at the Nichols Ranch in situ recovery
("ISR") Project. We made an important property acquisition
which significantly enhanced our Roca Honda Project in New
Mexico. We achieved key permitting milestones at our Sheep
Mountain and Hank projects. We are proactively managing our
balance sheet and expanding our corporate financing options.
And, we continue to differentiate ourselves from our peers in terms
of current uranium production, cash position, balance sheet, sales
contract portfolio, and growing production scalability. I
believe that Energy Fuels continues to emerge as a dominant uranium
producer in the United
States."
"Finally, we are seeing encouraging signs in uranium markets,
including the restart of two nuclear reactors in Japan, continued aggressive expansion of the
Chinese nuclear program, and the commencement of operations for the
first new nuclear reactor in the United
States in nearly 20 years. Current uranium markets
remain uncertain, but I believe we are observing some of the early
catalysts that will sustain an expected recovery in uranium
prices. And as prices rise, Energy Fuels has considerable
organic scalability, including our U.S. production platform and
uranium resource portfolio, to significantly increase production
and capture the expected benefits of higher prices."
Financial and Operational Highlights for the Three Months
Ended September 30, 2015:
- $19.16 million of total revenue
was realized by the Company.
- Gross Profit of $7.23 million
from mining and milling operations was realized by the Company,
representing a gross profit margin of approximately 38%.
- A net loss of $2.39 million was
realized by the Company.
- 314,667 pounds of U3O8 sales were
completed by the Company at an average realized price of
$56.16 per pound, pursuant to
existing long-term contracts.
- At September 30, 2015, the
Company had $43.08 million of working
capital, including cash and cash equivalents of $17.74 million and approximately 650,000 pounds
of uranium concentrate inventory. The Company's contractual
deliveries and related sales are based on delivery schedules which
can vary from quarter to quarter. As discussed below, the
Company expects to sell an additional 200,000 pounds of
U3O8 during the remainder of the year under
existing contracts and expected spot sales, which will generate
significant cash for the Company's operational needs.
- On July 13, 2015, the Company
provided a production and development update on its newly acquired
Nichols Ranch ISR Uranium Project, including the commencement of
production at a fifth header house and associated increases in
production flow rates and total uranium production. The
Company expects to complete construction on a sixth header house at
Nichols Ranch in November 2015, along
with approximately 60 associated production and injection
wells. The Company acquired Nichols Ranch through its
June 18, 2015 acquisition of Uranerz
Energy Corporation.
- On July 16, 2015, the Company
announced that it had received a mine permit from the State of Wyoming for its Sheep Mountain
Project, including expansion of the surface and underground
mine.
- On July 21, 2015, the Company
announced that the U.S. Bureau of Land Management ("BLM") had
issued a Final Environmental Assessment ("EA") and granted its
final approval for the Plan of Operations for the Company's Hank
ISR Uranium Project. The issuance of the EA and the approval
of the Plan of Operations were the final major regulatory approvals
required for the Hank project.
- On August 3, 2015, the Company
announced that it had completed the acquisition of key mineral
properties adjacent to its Roca Honda Uranium Project in New
Mexico. The acquired properties contain significant
historical uranium resources, additional exploration potential, and
the availability of existing historic mine infrastructure.
The acquisition substantially increased the size of the Roca Honda
Project and created the potential to significantly enhance its
project economics.
- On September 29, 2015, the
Company announced that it was augmenting its uranium production
capabilities at Nichols Ranch through the construction of an
elution circuit. Upon completion of the elution circuit, the
Company will have entirely self-contained yellowcake processing
capabilities for its ISR production. The Company expects to
spend approximately $3.90 million to
complete these plant upgrades.
- On September 29, 2015, the
Company announced that it intended to conduct a normal course
issuer bid (the "NCIB") for the Company's outstanding floating-rate
convertible unsecured subordinated debentures (the "Debentures"),
which mature on June 30, 2017.
Under the NCIB the Company may repurchase up to Cdn$2.20 million of the Debentures, representing
10% of the public float of the Debentures, over the next 12
months. There are currently an aggregate of Cdn$22.00 million principal amount of Debentures
issued and outstanding.
- On September 30, 2015, the
Company announced that Ames Brown
had joined Energy Fuels' Board of Directors.
- On November 4, 2015, the Company
announced the acquisition from Anfield Resources Holding Corp. of
the remaining 50% joint venture interest in the Wate breccia pipe
project located in Arizona,
bringing the Company's interest in the project to 100%. For
this interest, the Company paid cash in the amount of $0.28 million and 92,906 common shares, which
were paid on closing, and a commitment to pay a further
$0.28 million cash and $0.28 million in common shares upon the
satisfaction of certain future conditions. The Wate breccia
pipe project is currently at an advanced stage of permitting, and
is estimated to contain approximately 1.12 million pounds of
U3O8 contained in approximately 71,000 tons
of inferred mineral resources with an average grade of 0.79%
eU3O8.
Selected Summary
Financial Information:
|
|
|
|
|
|
|
Three months
ended
|
Nine months
ended
|
$000, except per
share data
|
September 30,
2015
|
September 30,
2015
|
Results of
Operations:
|
|
|
|
Total
revenues
|
$
|
19,159
|
$
|
50,464
|
|
Gross
profit
|
7,226
|
20,894
|
|
Net income
(loss)
|
(2,393)
|
(7,067)
|
|
Basic and diluted
earnings (loss) per share
|
(0.05)
|
(0.24)
|
|
|
|
|
As at September
30,
|
As at December
31,
|
$000's
|
2015
|
2014
|
Financial
Position
|
|
|
|
Working
capital
|
$
|
43,083
|
$
|
38,604
|
|
Property, plant and
equipment
|
132,693
|
65,873
|
|
Total
assets
|
267,980
|
134,241
|
|
Total long-term
liabilities
|
48,309
|
30,956
|
Overview
With the June 2015 acquisition of
the ISR operation at Nichols Ranch, Energy Fuels has significantly
increased its flexibility to regulate uranium production in
response to market conditions and to meet the needs of its sales
contracts. At the same time, significant additional
production can be brought on line within months after a production
decision is made. This allows the Company to efficiently
fulfill its existing sales commitments and commit to new spot and
term sales commitments that are backed by available
production. The Company has the following short-term
production capabilities which can be brought on line and/or
production levels increased through December
31, 2016 (each of which is more fully described below):
1) Nichols Ranch ISR Project
2) Alternate feed materials
3) Pinenut Mine ore that has been
mined and is available for milling
4) Canyon Mine
In response to continued market uncertainty, the Company expects
to continue cash conservation efforts until additional sustained
improvement in uranium market conditions is observed. In
addition, the Company is continuing to manage its operations and
assets conservatively, maintaining its substantial uranium resource
base, and scheduling uranium production at the White Mesa Mill and
Nichols Ranch as market conditions, cash needs and/or contract
delivery requirements may warrant.
Production and Operations – Overview
The Company currently has finished goods inventory and
production capability that exceed the sales commitments contained
in its existing sales contracts. As a result, both ISR and
conventional production has been, and is expected to continue to
be, regulated until such time as market conditions improve
sufficiently and/or the Company requires cash to meet its business
needs. This allows the Company to maintain its readily
available mineral resources for future sales at price levels that
we expect to be higher than current levels and, accordingly, to be
able to achieve the benefit of expected future uranium price
increases.
Production and Operations – ISR Uranium Assets
At September 30, 2015, five header
houses were in production at the Nichols Ranch facility. The
Company plans to complete three additional header houses during the
next 12 months, which will complete the development of production
area #1. We expect the Nichols Ranch facility to produce
approximately 400,000 pounds of finished goods from October 1, 2015 through the end of FY-2016.
On September 29, 2015, Energy
Fuels announced that it has commenced construction of the elution
circuit at Nichols Ranch. Upon completion of construction of
the elution circuit at Nichols Ranch, Energy Fuels will have
brought all of these functions in-house, and will have entirely
self-contained yellowcake processing capabilities for its ISR
production.
Permitting at our adjacent Jane Dough Unit, which is expected to
feed the Nichols Ranch plant, is continuing and is expected to be
completed well in advance of our need to begin wellfield
development on this property. Also, our Hank Unit is now
fully permitted as a satellite facility to the Nichols Ranch
plant. We are reviewing the economic viability of utilizing a
pipeline from the Hank Unit to the Nichols Ranch plant, instead of
building a satellite facility.
Production and Operations – Conventional Uranium
Assets
The Company ceased mining at the Pinenut mine in August 2015, as the ore body was fully
depleted. The ore mined from the Pinenut mine that has not
yet been milled contains approximately 350,000 lbs. of
U3O8, and is continuing to be shipped to the
White Mesa Mill for processing in FY-2016 as discussed
below.
The White Mesa Mill has historically operated on a campaign
basis, whereby mineral processing occurs as mill feed, cash needs,
contract requirements, and/or market conditions may warrant.
The Company expects to continue the current mineral processing
campaign at the White Mesa Mill into the second half of FY-2016 to
process available alternate feed materials and Pinenut ore,
resulting in the production of approximately 600,000 pounds of
finished goods from October 1, 2015
through the end of FY-2016.
The Company has re-started development of the Canyon mine,
including the completion of necessary upgrades to the
infrastructure and installation of new mine equipment to optimize
shaft sinking rates and realize construction cost savings.
The timing of the completion of development and mining of the
Canyon mine and subsequent processing of the ore will be based on
market conditions and customer requirements for this
material.
Sales
The Company forecasts sales in the fourth quarter of FY-2015 of
200,000 pounds of U3O8 at an average price of
$54.59 per pound, of which 100,000
pounds was a result of moving deliveries from FY-2016 to
Q4-2015.
For FY-2016 and FY-2017, the Company forecasts sales under
existing long-term contracts to total approximately 550,000 pounds
and 620,000 pounds of U3O8, respectively.
The Company is currently monitoring market conditions for
additional sales opportunities and will pursue economically
justified uranium sales contract leads. Additional selective
spot sales will be made as necessary to generate cash for
operations and development.
Stephen P. Antony, P.E., President & CEO of Energy
Fuels, is a Qualified Person as defined by Canadian
National Instrument 43-101 and has reviewed and approved the
technical disclosure contained in this news release.
About Energy Fuels: Energy Fuels
is a leading integrated US-based uranium mining company, supplying
U3O8 to major nuclear utilities. Energy
Fuels operates two of America's key uranium production centers, the
White Mesa Mill in Utah and the
Nichols Ranch Processing Facility in Wyoming. The White Mesa
Mill is the only conventional uranium mill operating in the U.S.
today and has a licensed capacity of over 8 million pounds of
U3O8 per year. The Nichols Ranch
Processing Facility, acquired in the Company's acquisition of
Uranerz Energy Corporation, is an in situ recovery ("ISR")
production center with a licensed capacity of 2 million pounds of
U3O8 per year. Energy Fuels also has
the largest NI 43-101 compliant uranium resource portfolio in the
U.S. among producers, and uranium mining projects located in a
number of Western U.S. states, including two producing mines, mines
on standby, and mineral properties in various stages of permitting
and development. The Company's common shares are listed on
the NYSE MKT under the trading symbol "UUUU", and on the Toronto
Stock Exchange under the trading symbol "EFR".
ADDITIONAL IFRS FINANCIAL PERFORMANCE MEASURES
The Company has included the additional IFRS measure "Gross
Profit" in the financial statements and in this news release.
Management noted that "Gross Profit" provides useful information to
investors as an indication of the Company's principal business
activities before consideration of how those activities are
financed, sustaining capital expenditures, corporate and
exploration and evaluation expenses, finance income and costs, and
taxation.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
This news release contains certain "Forward Looking
Information" and "Forward Looking Statements" within the meaning of
applicable Canadian and United
States securities legislation, which may include, but is not
limited to, statements with respect to the future financial or
operating performance of the Company and its projects, including:
production and sales forecasts; expected timelines for the
permitting and development of projects; the Company's expectations
as to longer term fundamentals in the market and price projections;
the Company's expectations as to expenditures and cost reductions;
the Company's ability to preserve its cash resources and maintain
its resource base; scalability, and the Company's ability to be
able to restart or increase production as market conditions
warrant; the ability of the Company to realize the expected
benefits of the acquisition of Uranerz Energy Corporation and to
become or maintain its position as a leading uranium company in the
United States. Generally, these forward-looking statements
can be identified by the use of forward-looking terminology such as
"plans", "expects" "does not expect", "is expected", "is likely",
"budget" "scheduled", "estimates", "forecasts", "intends",
"anticipates", "does not anticipate", or "believes", or variations
of such words and phrases, or state that certain actions, events or
results "may", "could", "would", "might" or "will be taken",
"occur", "be achieved" or "have the potential to". All
statements, other than statements of historical fact, herein are
considered to be forward-looking statements. Forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or
achievements of the Company to be materially different from any
future results, performance or achievements express or implied by
the forward-looking statements. Factors that could cause
actual results to differ materially from those anticipated in these
forward-looking statements include: risks associated with
estimating production, forecasting future price levels necessary to
support production, scalability, and the Company's ability to
restart or increase production in response to any increase in
commodity prices; risks inherent in the Company's and the
industry's forecasts or predictions of future uranium prices; risks
of delays in obtaining permits and licenses that could impact
expected production levels or increases in expected production
levels; risks in meeting expected timelines for the development of
projects; government and third party actions with respect to
supplies of secondary sources of uranium; fluctuations or changes
in the market prices of uranium; risks associated with the
integration of Uranerz Energy Corporation; and the other factors
described under the caption "Risk Factors" in the Company's Annual
Information Form dated March 18,
2015, which is available for review on SEDAR at
www.sedar.com, in its Form 40-F, which is available for review
on EDGAR at www.sec.gov/edgar.shtml and in its
prospectus supplement dated September 29,
2015 which is available for review on SEDAR and EDGAR.
Forward-looking statements contained herein are made as of the date
of this news release, and the Company disclaims, other than as
required by law, any obligation to update any forward-looking
statements whether as a result of new information, results, future
events, circumstances, or if management's estimates or opinions
should change, or otherwise. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, the reader is
cautioned not to place undue reliance on forward-looking
statements.
The Company assumes no obligation to update the information
in this communication, except as otherwise required by law.
Cautionary Note to United States Investors Concerning
Estimates of Measured, Indicated and Inferred Resources:
This new release may use the terms "Measured", "Indicated" and
"Inferred" Resources. United
States investors are advised that, while such terms are
recognized and required by Canadian regulations, the United States
Securities and Exchange Commission does not recognize them.
"Inferred Mineral Resources" have a great amount of uncertainty as
to their existence, and as to their economic and legal
feasibility. It cannot be assumed that all or any part of an
Inferred Mineral Resource will ever be upgraded to a higher
category. Under Canadian rules, estimates of Inferred Mineral
Resources may not form the basis of feasibility or other economic
studies. United States
investors are cautioned not to assume that all or any part of
Measured or Indicated Mineral Resources will ever be converted into
Mineral Reserves. United
States investors are also cautioned not to assume that all
or any part of an Inferred Mineral Resource exists, or is
economically or legally mineable.
SOURCE Energy Fuels Inc.