DENVER, May 3, 2018 /CNW/ - Energy Fuels Inc. (NYSE
MKT:UUUU; TSX:EFR) ("Energy Fuels" or the "Company"), today
reported its financial results for the quarter ended March 31, 2018. The Company's quarterly report on
Form 10-Q has been filed with the U.S. Securities and Exchange
Commission ("SEC"), and may be viewed on the Electronic Document
Gathering and Retrieval System ("EDGAR") at
www.sec.gov/edgar.shtml, on the System for Electronic Document
Analysis and Retrieval ("SEDAR") at www.sedar.com, and on the
Company's website at www.energyfuels.com. Unless noted otherwise,
all dollar amounts are in U.S. dollars.
Financial Highlights:
- At March 31, 2018, the Company
had $23.6 million of working capital,
including cash and cash equivalents of $6.6
million and approximately 600,000 pounds of uranium
concentrate inventory.
- 50,000 pounds of U3O8 sales were
completed by the Company at a realized price of $24.75 per pound, pursuant to a contract.
- Q1 had lower sales volume due to the timing of contract sales.
On April 1, 2018, the Company
delivered 400,000 lbs. into long-term sales contracts at the price
of $61.30 per pound, and over
$24.5 million was collected on
May 1, 2018. In addition, the Company
collected $5.39 million from the sale
of a non-core property on May 1,
2018.
- $1.2 million of total revenue was
realized by the Company during the quarter.
- Uranium production totaled 43,000 pounds of
U3O8 during the quarter.
- The Company began fulfilling toll processing alternate feed
contracts which are expected to result in approximately
$7.1 million of revenue for 2018,
including $3.8 million of cash and
$3.3 million of uranium for the
Company's account, none of which have been earned or recovered to
date.
Mark S. Chalmers, Energy
Fuels' President and CEO stated: "Energy Fuels continues to
maintain a strong working capital position and overall balance
sheet during these challenging uranium market conditions. We are
the largest uranium producer in the U.S., and we own an operating
in situ recovery ("ISR") facility in Wyoming, a second ISR facility on standby in
Texas, and the largest uranium
resource base in the U.S. among producers. Further, we own the only
operating uranium mill in the U.S. – which is also the only
operating facility in the U.S. with the near-term ability to resume
recovery of vanadium. Energy Fuels' unmatched depth of assets and
breadth of opportunities position us to maintain this strength
during these difficult times.
"We are unique among our peers in our ability to capitalize on
opportunities that are insulated from the low global uranium market
prices, including new sources of alternate feed materials and fee
processing arrangements, the potential for fee-based land cleanup
work, the potential for copper recovery from our Canyon Mine, and
vanadium recovery at our White Mesa Mill (the "Mill"). Perhaps most
importantly, we are a co-petitioner on a Section 232 Petition with
the federal government that has the potential to provide important
support for the U.S. uranium mining industry.
"All of these opportunities are exciting because they allow us
to preserve our substantial uranium production capabilities,
minimize shareholder dilution, and provide us with unsurpassed
optionality to increase uranium production as prices rise.
"I am particularly excited right now about our current vanadium
opportunities, including the short-term potential to recover
vanadium that is dissolved in pond water at the Mill, which we are
currently evaluating. Vanadium prices have risen by more than 400%
over the past 24 months to about $15
per pound V2O5. The Mill has a long history
of conventional vanadium recovery, most recently producing 1.5
million pounds of vanadium in 2013. During its 38-year operating
history, the Mill has actually produced over 45 million pounds of
vanadium – or over $500 million of
vanadium at today's prices. The Company is also reviewing the
economics of processing certain previously mined uranium/vanadium
stockpiles in the vicinity of the Mill. Finally, in light of the
potential for supportive trade remedies, we are evaluating the
re-initiation of conventional uranium/vanadium production from
certain mines. We have a number of mines in Utah and Colorado that contain large quantities of
uranium and vanadium resources, including the Whirlwind Mine and
the La Sal Complex where we recently received government approvals
for an expansion."
Key Developments:
On January 16, 2018, the Company
and Ur-Energy (the "Petitioners") announced that they had jointly
filed a Petition (the "Petition") for Relief with the U.S.
Department of Commerce ("DOC") under Section 232 of the Trade
Expansion Act of 1962 (as amended) from Imports of Uranium Products
that Threaten National Security. The petition describes how uranium
and nuclear fuel from state-owned and state-subsidized enterprises
in Russia, Kazakhstan, Uzbekistan, and China potentially represent a threat to U.S.
national security. The Petition seeks remedies which will set a
quota to limit imports of uranium into the U.S., effectively
reserving 25% of the U.S. nuclear market for U.S. uranium
production. Additionally, the Petition suggests implementation of a
requirement for U.S. federal utilities and agencies to buy U.S.
uranium in accordance with the President's Buy American Policy. The
remedies proposed by the Petitioners are expected to strengthen the
U.S. uranium mining industry, bolster national defense, and improve
supply diversification for U.S. utilities and their customers.
During the first three months of 2018, the Utah Department of
Environmental Quality renewed the Company's White Mesa Mill license
for another ten years, and the Company received amendments from the
U.S. Bureau of Land Management and U.S. Forest Service to its Plans of Operations to
expand operations at its La Sal Uranium/Vanadium Project and
Daneros Uranium Project, both of which are currently on
standby.
The Company completed the shaft at its Canyon Project to a depth
of 1,470 ft. during the first three months of 2018, and also
completed the construction of a sump at the bottom of the shaft, as
well as miscellaneous other development activities at the mine.
Currently planned field activities at the mine are now
complete.
Recent studies of the Company's vanadium capabilities have
resulted in the identification of substantial quantities of
potentially recoverable, solubilized vanadium in the Mill's
tailings and evaporation ponds, and consequently the Company is
considering initiating a "pilot" project in 2018 to determine the
scope, cost and economics to recover this dissolved vanadium, along
with additional quantities of uranium, from those solutions.
In March 2018, the Company
received a notice from the Texas
Commission on Environmental Quality confirming that the Company
completed final groundwater restoration at Production Area 1 at the
Company's Alta Mesa Uranium Project ("Alta Mesa") in Texas. Groundwater restoration following
uranium recovery is one of the most important environmental
compliance milestones that every U.S. ISR facility must complete
following production. Alta Mesa is a
fully permitted and constructed ISR uranium project located in
South Texas that is currently on
standby status.
Effective March 12, 2018,
Barbara A. Filas was appointed to
serve as a Director of Energy Fuels, to fill a vacancy on the
Board. Ms. Filas brings an impressive array of executive and
technical experience to Energy Fuels in both the public and private
mining sectors, having served as the President and Chief Executive
of Knight Piésold and Co., a leading global mining and
environmental consulting firm, the President of Geovic Mining
Corp., a publicly-traded mining company with an advanced cobalt,
nickel and manganese exploration project in Cameroon, and a Director of Moroccan Minerals
Ltd., a private company that explored for copper, gold, and silver
prospects in Morocco and Serbia.
In addition, Ms. Filas was the first female President of the
Society for Mining, Metallurgy and Exploration ("SME"), the world's
largest technical mining organization, and is currently a part-time
Professor of Practice at the Colorado School
of Mines in Golden,
Colorado. She is internationally recognized as a
thought-leader on a variety of topics including mining, waste
management, environmental and social responsibility, leadership,
and sustainability, and has experience in both developed and
developing countries on six continents.
On May 1, 2018, the Company closed
the sale of its non-core Reno Creek property in Wyoming for $5.39
million, including $2.94
million in cash and $2.45
million in common shares of Uranium Energy Corp.
Selected Summary Financial Information:
|
|
|
$000, except per
share data
|
Three months
ended
March 31, 2018
|
Three months
ended
March 31, 2017
|
Results of
Operations:
|
|
|
|
Total
revenues
|
$
|
1,254
|
$
|
3,756
|
|
Net loss attributable
to the company
|
(10,822)
|
(10,508)
|
|
Basic and diluted
earnings (loss) per share
|
(0.14)
|
(0.15)
|
|
|
|
$000's
|
As at March 31,
2018
|
As at December 31,
2017
|
Financial
Position:
|
|
|
|
Working
capital
|
$
|
23,635
|
$
|
33,296
|
|
Property, plant and
equipment
|
32,251
|
33,076
|
|
Mineral
properties
|
83,539
|
83,539
|
|
Total
assets
|
172,797
|
185,338
|
|
Total long-term
liabilities
|
44,497
|
45,701
|
Operations and Sales Outlook:
The Company plans to extract and/or recover uranium from the
following sources in 2018 (each of which is more fully described
below):
- Nichols Ranch Project;
- Alternate Feed Materials; and
- The recovery of dissolved uranium from the Mill's tailings
management system that was not fully recovered during the Mill's
prior thirty-plus years of operations ("Pond Return").
Our planned operations are expected to produce finished uranium
in excess of our existing requirements under our sales
contracts.
Extraction and Recovery Activities - Overview
The Company expects to produce a total of 460,000 to 520,000
pounds of U3O8 in the year ending
December 31, 2018, of which 43,000
pounds of U3O8 were produced in the first
three months of 2018.
Extraction and Recovery - ISR Uranium Segment
We expect production at Nichols Ranch to total 140,000 to
160,000 pounds in the year ending December
31, 2018, of which we recovered 43,000 pounds during the
first three months of 2018.
At March 31, 2018, the Nichols
Ranch wellfields had nine header houses extracting uranium. Until
such time when improvement in uranium market conditions is observed
or suitable sales contracts can be entered into, the Company
intends to defer further development of wellfields at its Nichols
Ranch Project and to keep Alta Mesa
on standby.
Extraction and Recovery – Milling Operations
We expect to recover 320,000 to 360,000 pounds of uranium at the
Mill during the year ending December 31,
2018 for our own account, none of which have been recovered
to date in 2018. Of this material, approximately 145,000 pounds are
expected to be from alternate feed materials and the remainder from
Pond Return. In addition to the 145,000 pounds expected to be
recovered from alternate feed materials, valued at $3.3 million, the Company expects to receive an
additional $3.8 million in cash from
processing fees, for a total expected value from alternate feed
materials of $7.1 million during
2018, none of which has been earned or recovered to date in 2018.
The Company is continuing to pursue other alternate feed material
opportunities, some of which may result in additional value to the
Company in 2018.
The Company currently expects that planned processing activities
will keep the Mill in operation through the end of 2018, and will
generate positive cash flow as a result. The Company is also
actively pursuing opportunities to process new and additional
alternate feed sources, low-grade ore from third parties in
connection with various uranium clean-up requirements, and further
recovery of uranium from Pond Return.
Vanadium Recovery
Vanadium is a metallic element that, when converted into
ferrovanadium (an alloy of vanadium and iron), is used primarily as
an additive to strengthen and harden steel. In addition, vanadium
continues to see interest in energy storage technologies, including
vanadium redox flow batteries, which are used commercially for grid
energy storage.
In addition to evaluating the potential to recover solubilized
vanadium from the Mill's tailings and evaporation ponds, the
Company is also reviewing the economics of processing certain
previously mined uranium/vanadium ore stockpiles in the vicinity of
the Mill and re-initiation of conventional mining at certain of its
uranium/vanadium mines, as well as the recovery of vanadium alone,
or in combination with uranium, from other potential
vanadium-bearing streams, as market conditions may warrant.
The goal of the Company's vanadium review is to better quantify
near- and mid-term vanadium revenue streams, in light of recent
increases in vanadium prices, while minimizing the risks of market
fluctuations.
Canyon Project
With the completion of the shaft to a depth of 1,470 ft., all
currently planned field activities have been completed at the
Company's Canyon Mine. The Company plans to continue to carry out
engineering, procurement and construction management activities in
2018, including additional bench and pilot plant scale
metallurgical test work of the uranium/copper mineralization, as
well as to pursue any additional permitting actions that may be
required to recover copper at the Mill. The timing of our plans to
extract and process mineralized materials from this project will be
based on the results of this additional evaluation work, along with
market conditions, available financing, and sales requirements.
Other Operational Activities
During the first three months of 2018, the Company received
amendments to its Plans of Operations to expand operations at its
La Sal Uranium/Vanadium Project and its Daneros Uranium Project,
both of which are currently on standby. The Company continues to
selectively advance certain permits at its other major conventional
uranium projects.
The Company plans to continue the licensing and permitting of
the Roca Honda Project, a large, high-grade conventional project in
New Mexico, with the Record of
Decision currently now expected to be completed in 2019. The
Company will also continue to evaluate the Bullfrog Property at its
Henry Mountains Project. Expenditures for certain of these projects
have been adjusted to coincide with expected dates of price
recoveries based on our forecasts. All of these projects serve as
important pipeline assets for the Company's future conventional
production capabilities, as market conditions warrant.
The Company will also continue to pursue additional cost cutting
initiatives, including further reductions in the scope of certain
development initiatives, the potential sale or abandonment of
certain non-core properties and the sale of excess mining equipment
and other assets.
Trade Petition
The Company intends to continue its support of the Section 232
Petition during 2018. It should be noted, however, that there can
be no certainty of the outcome of the petition, and therefore the
outcome of this process is uncertain.
Sales of U3O8 and other revenue update and
outlook
In the three months ended March 31,
2018, the Company completed deliveries of 50,000 pounds of
U3O8 on a spot sale at a price of
$24.75 per pound. In addition, on
April 1, 2018, the Company completed
the delivery of 400,000 pounds of U3O8 under
two long-term contracts with a fixed price of $61.30 per pound. In the final nine months of the
year, the Company expects to complete two deliveries totaling
200,000 pounds of U3O8 each under a contract,
where the price is based on the average spot price per pound of
uranium for the five weeks prior to the dates of delivery.
About Energy Fuels: Energy Fuels is a leading
integrated US-based uranium mining company, supplying
U3O8 to major nuclear utilities. Its
corporate offices are in Denver,
Colorado, and all of its assets and employees are in the
western United States. Energy
Fuels holds three of America's key uranium production centers, the
White Mesa Mill in Utah, the
Nichols Ranch Processing Facility in Wyoming, and the Alta Mesa Project in
Texas. 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 is an ISR production center with a licensed capacity of 2
million pounds of U3O8 per year. Alta Mesa is an ISR production center currently
on care and maintenance. Energy Fuels also has the largest National
Instrument 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 one producing ISR project, mines on
standby, and mineral properties in various stages of permitting and
development. The Company also produces vanadium as a by-product of
its uranium production from certain of its mines on the Colorado
Plateau, as market conditions warrant. The primary trading market
for Energy Fuels' common shares is the NYSE American under the
trading symbol "UUUU", and the Company's common shares are also
listed on the Toronto Stock Exchange under the trading symbol
"EFR". Energy Fuels' website is
www.energyfuels.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
This news release contains certain "Forward Looking
Information" and "Forward Looking Statements" within the meaning of
applicable securities legislation, which may include, but is not
limited to, statements with respect to: production, revenue and
sales forecasts; the ability of the Company to enjoy some
insulation from spot market weakness and to maintain its strength
during these difficult times; the ability of the Company to
secure any new sources of alternate feed materials, land clean-up
materials, or other processing opportunities at the Mill;
whether all or a portion of any copper resource at the Canyon
project can be recovered at the Mill or elsewhere; scalability, and
the Company's ability and readiness to re-start or expand any of
its existing projects to respond to any improvements in uranium
market conditions; the ability of the Company to preserve
its substantial uranium production capabilities, while minimizing
shareholder dilution; any expectations regarding vanadium
opportunities; any expectations regarding keeping the Mill in
operation through 2018 and the generation of positive cash flow
from the Mill as a result; 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;
expectations of the Company to become or maintain its position as a
leading uranium company in the United
States; and the outcome of the Petition to the
Department of Commerce to commence a Section 232 investigation.
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:
production, revenue and sales forecasts; the ability of the Company
to enjoy some insulation from spot market weakness and to maintain
its strength during these difficult times; the ability of
the Company to secure any new sources of alternate feed materials,
land clean-up materials, or other processing opportunities at the
Mill; whether all or a portion of any copper resource at the
Canyon project can be recovered at the Mill or elsewhere;
scalability, and the Company's ability and readiness to re-start or
expand any of its existing projects to respond to any improvements
in uranium market conditions; the ability of the Company to
preserve its substantial uranium production capabilities, while
minimizing shareholder dilution; any expectations regarding
vanadium opportunities; any expectations regarding keeping the Mill
in operation through 2018 and the generation of positive cash flow
from the Mill as a result; 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;
expectations of the Company to become or maintain its position as a
leading uranium company in the United
States; the outcome of the Petition to the Department
of Commerce to commence a Section 232 investigation; and the
other factors described under the caption "Risk Factors" in the
Company's Annual Report on Form 10-K dated March 9, 2018, which is available for review on
EDGAR at www.sec.gov/edgar.shtml, on SEDAR at
www.sedar.com, and on the Company's website at
www.energyfuels.com. 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.
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SOURCE Energy Fuels Inc.