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Energy Fuels Inc: THE INVESTMENT CASE

Energy Fuels nudges higher as it outlines opportunities to lift uranium output

The group is always hunting new sources of alternate feed materials and fee processing arrangements, it said
Energy Fuels nudges higher as it outlines opportunities to lift uranium output
INVESTMENT OVERVIEW: EFR The Big Picture
The firm is always on the lookout for ways to increase output

Energy Fuels Inc (TSE:EFR, NYSE:UUUU) shares nudged higher as it today outlined "bridges" of opportunity to increase primary production from its US uranium mines as market conditions improve.

In a letter to shareholders, new president and chief Mark S. Chalmers, pointed out that the group has a portfolio that is unmatched in the US uranium industry in terms of production scalability, licensed and permitted facilities, and in-ground resources.

It has around 11.5mln pounds of licensed capacity at its three production facilities, he said.

For its White Mesa Mill in Utah, the group is always hunting new sources of alternate feed materials and fee processing arrangements.

 

In 2017, we re-processed about 950,000 pounds of off-spec uranium concentrate for a third party, earning fees of about $6 million. Today, we are talking to several additional parties about new business for 2018 and beyond.

"In fact, we currently project that the White Mesa Mill will be cash-flow positive for 2018, as it was in 2017 when it was the single largest producer of uranium in the entire U.S," said Chalmers.

Long term opportunity..

Also, land cleanup work also presents an excellent long-term opportunity as during the early years of the Cold War, hundreds of small, government-sponsored uranium mines operated in the US, many  of which were never properly remediated.

Today, the U.S. Environmental Protection Agency (EPA) is spearheading the effort to clean-up these sites, many of which are on Navajo Nation land - near White Mesa.

"Then, there's vanadium," Chalmers told shareholders.

"Vanadium is a mineral used in high-strength steel, titanium and other alloys and in batteries used in renewable energy systems. Vanadium prices have risen by more than 400% over the past 24 months. And, the White Mesa Mill - in addition to being the only conventional uranium mill operating in the U.S. - is also the last operating facility left in the U.S. with the near-term ability to resume recovery of vanadium."

A number of mines..

Chalmers noted that Energy had a number of mines in Utah and Colorado that contain large quantities of high-grade vanadium resources, including the Whirlwind Mine and the La Sal Complex where the company recently received government approvals for expansion.

"These are all exciting opportunities. However, we are not building our core business around them, said the company boss.

"We view them as "bridges" to increased primary production from our uranium mines as market conditions improve.

"We can respond immediately to positive market signals from a number of different mines, including our Canyon Mine, Nichols Ranch ISR Project, and Alta Mesa ISR Project located in Arizona, Wyoming and Texas, respectively."

Energy Fuels shares in Toronto added 1.51% to C$2.02 each.

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