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Energy Fuels Inc. Logo (CNW Group/Energy Fuels Inc.)

Highlights:

  • Energy Fuels reported a net income of $1.5 million for 2021.
  • At December 31, 2021 , the Company had a robust balance sheet with $143.2 million of working capital, including $113.0 million of cash and marketable securities, $30.8 million of inventory, and no short term (or long term) debt. At current commodity prices, the Company’s December 31, 2021 product inventory would have a value of approximately $60.6 million .
  • During 2021, prices for all the commodities Energy Fuels produces, or has the ability to produce, rose significantly. Uranium oxide (” U 3 O 8 “) prices increased approximately 38%, neodymium-praseodymium oxide (” NdPr “) prices increased approximately 112%, and vanadium oxide (” V 2 O 5 “) prices increased approximately 62%. Prices for each of these commodities have continued to show significant strength to date in 2022. The Company continues to closely follow developments related to Russia’s invasion of Ukraine , as Russia is a major supplier of uranium and nuclear fuel to U.S. and European customers. Prices of uranium have risen sharply in recent days.
  • While the Company chose to not sell any uranium during 2021, it is now actively engaged in pursuing selective long-term uranium sales contracts.
  • The Company produced approximately 270 metric tonnes of mixed rare earth element (” REE “) carbonate (” RE Carbonate “), containing 120 metric tonnes of total rare earth oxides (” TREO “) during 2021, as it commenced ramping up its REE recovery infrastructure. Energy Fuels‘ RE Carbonate is the most advanced REE material being produced in the U.S. today.
  • The Company is currently in active discussions with several sources of natural monazite sands around the world to significantly increase the supply of feed for its growing REE initiative.
  • During Q1-2022, the Company began commercially separating Lanthanum (La) and Cerium (Ce) on a small scale from its RE Carbonate, using an existing solvent extraction circuit at the Mill. This represents the first commercial level REE separation to occur in the U.S. in many years.
  • The Company is planning to install a full separation circuit at its White Mesa Mill (the ” Mill “) to produce both “light” and “heavy” separated REE oxides in the coming years, subject to successful licensing, financing, and commissioning, and continued strong market conditions. The Company has hired Carester SAS (” Carester “), a global leader in producing separated REE oxides, to support these REE separation initiatives.
  • On December 15, 2021 , the Company announced a strategic venture with Nanoscale Powders LLC (” NSP “) for the development of a novel technology that would potentially produce REE metals. The technology has the potential to reduce the costs of production, energy consumption, and greenhouse gas emissions versus existing technologies.
  • In 2021, the Company sold small quantities of its existing V 2 O 5 inventory to capitalize on recent market strength. The Company expects to continue to sell vanadium as prices increase and is evaluating the potential to resume vanadium recovery at the Mill, where its tailings pond solutions contain an estimated additional 1.0 to 3.0 million recoverable pounds of V 2 O 5 .
  • In July 2021 , the Company announced the execution of a Strategic Alliance Agreement with RadTran, LLC to evaluate the potential recovery of thorium and radium from the Company’s existing RE Carbonate and uranium process streams for use in the production of medical isotopes for emerging targeted alpha therapy (” TAT “) cancer therapeutics. This initiative complements the Company’s existing uranium and RE Carbonate businesses, as it investigates the potential recovery of isotopes in existing process streams at the Mill for medical purposes.
  • In September 2021 , the Company announced its establishment of the San Juan County Clean Energy Foundation (the ” Foundation “), a fund specifically designed to contribute to the communities surrounding the Mill in southeastern Utah by providing funding to support local economic development and local priorities.
  • In October 2021 , the Company completed the sale of certain, permitted non-core conventional uranium assets to Consolidated Uranium Inc. ( “CUR” ), including the Daneros mine, the Tony M mine, and the Rim mine. The Company reported a gain on the value of this transaction of $35.7 million , resulting in a significant improvement in the Company’s results of operations and net income for 2021.
  • On January 25, 2022 , the Board appointed Dr. Ivy Estabrooke as a Director of Energy Fuels, bringing to the Company experience in commercial-stage biotech, research and development program leadership, and technology solutions for national security and public health challenges.

Mark S. Chalmers , Energy Fuels‘ President and CEO, stated:

“In 2021, we believe Energy Fuels further strengthened its position as America’s leading multi-commodity, critical mineral company, as we made excellent progress on our uranium, REEs, vanadium and medical isotope initiatives. We are deploying our ‘one-of-a-kind’ licenses, facilities, and expertise to responsibly recover the critical elements needed for carbon-free nuclear energy, electric vehicle powertrains, wind generation, advanced electronics, grid-scale batteries, other clean energy and advanced technologies, and potentially cancer therapeutics.

“We are particularly proud of our accomplishments in REEs. We announced our entry into the REE business less than two years ago, and today we are ramping up our production of commercial quantities of RE Carbonate, which is a more advanced REE material than any other U.S. company is producing, as we are chemically recovering the REEs in a high-purity material that is ready for REE separation. We are also moving toward licensing and installing the infrastructure needed to produce separated REE oxides on a full commercial scale in the coming years. The proven processing technology for producing separated REE oxides is solvent extraction, or ‘SX,’ and our White Mesa Mill has over 40 years of experience producing uranium and vanadium using SX. With the support of Carester, a leading global consultant in the production of separated REE products, we believe it is a logical ‘next step’ for Energy Fuels to produce separated REE oxides on a full commercial scale at the Mill. We have already successfully performed La, Ce, and NdPr separations at pilot scale in the Mill’s lab over the past several months, and we recently began ramping up our commercial separation of La and Ce from our RE Carbonate on a small scale using an existing SX circuit at the Mill. Our primary REE focuses in 2022 will be building our supply of monazite ore, designing and licensing a new full commercial scale REE separation circuit at the Mill, and advancing our innovative REE metal initiative with NSP.

“With the recent events in Ukraine , security of supply in the U.S. for uranium is crucial. Energy Fuels continues to be the leading low-cost U.S. uranium producer with more production facilities and capacity than any other U.S. company, and we stand ready to be a reliable, large-scale supplier to U.S. nuclear utilities. We are seeing an increase in utility interest for long-term contracts. We are pursuing uranium sales contracts with pricing and terms that return acceptable project margins and maintain exposure to further uranium market upside.

“Vanadium prices are rising, as well. In 2019, we built a significant inventory of vanadium to sell into the abrupt upside price volatility that vanadium markets often experience, most recently in late 2018. The next upward cycle may have begun, as prices have risen sharply in the first months of 2022, and we are selling some of our inventory. As we sell, we will evaluate the potential to resume production from the Mill’s pond solutions or our conventional deposits to replace our sold inventory. We estimate our pond solutions alone contain another 1.0 to 3.0 million pounds of recoverable V 2 O 5 and would be first and lowest cost to market.

“A few words on our medical isotope initiative. This is another area where we are able to deploy our unique facilities, licenses, and expertise to potentially help create a domestic supply chain for emerging cancer therapies. Recovering radioisotopes for use in cancer treatments from our existing process streams, thereby recycling valuable material that would otherwise be lost to direct disposal, would, if successful, be a great way to maximally use all of our feeds. And we would be accomplishing this in a way that is environmentally beneficial and highly congruent with Energy Fuels‘ recycling and sustainability goals.

“We are also very pleased to announce that, on January 25, 2022 Dr. Ivy Estabrooke was appointed to the Board of Energy Fuels. Dr. Estabrooke brings to the Company an impressive background that is highly pertinent, not only to our new REE and TAT cancer therapeutics initiatives, but also to our core uranium business, which is of the utmost importance to national security at this time.”

Webcast at 1:00 pm EDT on March 17, 2022 :

Energy Fuels will be hosting a video webcast on March 17, 2022 at 1:00 pm EDT ( 11:00 am MDT ) to discuss its FY-2021 financial results, the outlook for 2022, uranium, rare earths, vanadium, and medical isotopes. To join the webcast and access the presentation and viewer-controlled webcast slides, please click on the link below:

Webcast Link

If you would like to participate in the webcast and ask questions, please dial in to 1-888-664-6392 (toll free in the U.S. and Canada ).

A link to a recorded version of the proceedings will be available on the Company’s website shortly after the webcast by calling 1-888-390-0541 (toll free in the U.S. and Canada ) and by entering the code 179864#. The recording will be available until March 31, 2022 .

Selected Summary Financial Information:

$000’s, except per share data

Year ended
December 31, 2021

Year ended
December 31, 2020

Year ended
December 31, 2019

Total revenues

$

3,184

$

1,658

$

5,865

Gross profit (loss)

1,370

14

(12,433)

Operating profit (loss)

(35,425)

(24,627)

(40,581)

Net income (loss) attributable to the company

1,541

(27,776)

(37,978)

Basic and diluted net income (loss) per common share

0.01

(0.23)

(0.40)

$000’s

As at December 31,
2021

As at December 31,
2020

Financial Position:

Working capital

$

143,190

$

40,158

Property, plant and equipment, net

21,983

23,621

Mineral properties, net

83,539

83,539

Total assets

315,446

183,236

Total long-term liabilities

13,805

13,376

Financial Discussion:

At December 31, 2021, the Company had $143.2 million of working capital, including $113.0 million of cash and marketable securities and $30.8 million of inventory, including approximately 691,000 pounds of uranium and 1,650,000 pounds of vanadium, both in the form of immediately marketable product. The spot price of U 3 O 8 at March 11, 2022 was $58.50 per pound, according to TradeTech (up from $42.00 per pound at December 31, 2021 . The current mid-point spot price of V 2 O 5 at March 11, 2022 was $12.25 per pound after remaining relatively flat near the 2021 year-end, according to FastMarkets. Based on today’s spot prices, the Company’s December 31, 2021 uranium and vanadium inventories would have a current market value of $40.4 million and $20.2 million , respectively, totaling approximately $60.6 million . On October 27, 2021 , the Company completed the sale of certain non-core conventional assets to CUR. In addition to receiving $2 million cash at closing, the Company now holds 19.1% of the outstanding shares of CUR as of December 31, 2021 , for a total value to the Company of $32.2 million as at December 31, 2021 .

During the year ended December 31, 2021 , the Company realized net income of $1.5 million , compared to a net loss of $27.9 for the year ended December 31, 2020 . The net income in 2021 was primarily due to the sale of non-core conventional uranium assets to CUR. The Company spent $10.75 million for development of the Company’s properties, primarily due to the development and ramping up of the RE Carbonate production program at the Mill. The Company also incurred underutilized capacity production costs applicable to rare earth concentrates during the year of $0.53 million . The underutilized capacity production costs are due to low throughput rates as the Mill ramps-up to commercial-scale production at full capacity. To date, the Mill has focused on producing commercially salable RE Carbonate at low throughput rates and has been very pleased with the resulting product it is shipping for separation. The Mill expects to increase its throughput rates as its supplies of monazite sands increase. The Company is in advanced discussions with several additional sources of monazite sands that, if successfully secured, we expect to result in sufficient throughput to reduce underutilized capacity production costs and allow the Company to realize its expected margins on a continuous basis.

Rare Earth Achievements in 2021 and To Date in 2022:

On March 1, 2021 , the Company and Neo Performance Materials Limited (” Neo “) announced a new rare earth production initiative spanning European and North American critical material supply chains. Under an agreement in principle signed on March 1, 2021 and finalized into a definitive agreement in July 2022 , Energy Fuels will process natural monazite sands, currently being mined in the state of Georgia by The Chemours Company, into an RE Carbonate at the Mill and ship a portion of the produced RE Carbonate to Neo’s rare earth separations facility in Sillamäe, Estonia (” Silmet “). Silmet will then process the RE Carbonate into separated rare earth materials for use in rare earth permanent magnets and other rare earth-based advanced materials.

On July 7, 2021 , the Company announced that the first container (approximately 20 tonnes of product) of an expected 15 containers of mixed RE Carbonate had been successfully produced by Energy Fuels at the Mill and was en route to Silmet. This commercial-scale production of RE Carbonate by Energy Fuels from a U.S. mined rare earth resource positions Energy Fuels as the only company in North America that currently produces a monazite-derived, enhanced rare earth material. The physical delivery of this product also represents the launch of a new, environmentally responsible rare earth supply chain that allows for source validation and tracking from mining through to final end-use applications for manufacturers in North America , Europe , Japan , and other nations.

The Company also announced on March 1, 2021 that, in addition to supplying RE Carbonate to Neo, Energy Fuels is evaluating the potential to develop U.S. separation capabilities at the Mill, or nearby, as it works to increase its monazite sand supplies, thereby fully integrating a U.S. rare earth supply chain in the coming years, in addition to supplying RE Carbonate to European markets. On April 27, 2021 , the Company announced it had engaged Carester to prepare a scoping study for the development of a solvent extraction REE separation circuit at the Mill utilizing the Mill’s existing equipment and infrastructure to the extent applicable, to create a continuous, integrated and optimized rare earth production sequence. Based in Lyon, France , Carester is one of the world’s leading global consultants on rare earth supply chains, with expertise in designing, constructing, operating and optimizing REE production facilities globally. Carester’s scoping work included an evaluation of the Mill’s current monazite leaching process, preparation of an REE separation flow sheet, capital and operating expense estimates, incorporation of new technologies where applicable, and recommendations on equipment vendors. The Company is planning to install a full separation circuit at its White Mesa Mill to produce both “light” and “heavy” separated REE oxides in the coming years, subject to successful licensing, financing, and commissioning, and continued strong market conditions. The Company has hired Carester to perform a second scoping study to support these REE separation initiatives.

During Q1-2022, the Company began commercially separating La and Ce from its RE Carbonate on a small scale using an existing solvent extraction circuit at the Mill. This represents the first commercial level REE separation to occur in the U.S. in many years. The Company has been performing laboratory-scale REE separations for the last several months on a 24/7 basis, successfully executing the La, Ce, and NdPr separations at high-purities and with excellent recoveries.

On December 15, 2021 , the Company announced the execution of an MOU with NSP for the development of a novel technology for the potential production of REE metals, subject to the finalization of definitive agreements. We believe this technology, which was initially developed by NSP, and will be advanced by the Company and NSP working together, has the potential to revolutionize the rare earth metal making industry by reducing costs of production, reducing energy consumption, and significantly reducing greenhouse gas emissions. Producing REE metals and alloys is a key step in a fully integrated REE supply chain, after production of separated REE oxides and before the manufacture of neodymium iron boron (” NdFeB “) magnets used in electric vehicles, wind generation and other clean energy and advanced technologies.

In addition, during 2022, the Company announced the execution of a non-binding memorandum of understanding (” MOU “) for the supply of natural monazite sands from IperionX Limited’s (” IperionX’s “, formerly known as Hyperion Metals Limited) Titan Project in Tennessee , if and when the project is developed and mined. IperionX’s Titan Project covers a large area of heavy mineral sands properties in Tennessee prospective for titanium, zircon, monazite and other valuable minerals such as high-grade silica sand and other refractory minerals.

In 2021, the Company also announced that the U.S. Department of Energy (” DOE “) Office of Fossil Energy and National Energy Technology Laboratory had exercised its option to award Energy Fuels, working with a team from Penn State University , an additional $1.75 million to complete a feasibility study on the production of REE products from natural coal-based resources, as well as from other materials such as REE-containing ores like the natural monazite sands the Company is currently processing at the Mill. This award follows the DOE providing Energy Fuels a $150,000 contract in 2020 for the successful completion of a conceptual design for the same initiative, resulting in a total award to Energy Fuels of $1.9 million .

Update on Medical Isotope Initiative:

On July 28, 2021 , the Company announced the execution of a Strategic Alliance Agreement with RadTran, LLC, a technology development company focused on closing critical gaps in the procurement of medical isotopes for emerging TAT cancer therapeutics and other applications. Under this strategic alliance, the Company is evaluating the feasibility of recovering Th-232, and Ra-226 from its existing RE Carbonate and uranium process streams at the Mill and, together with RadTran, is evaluating the feasibility of recovering Ra-228 from the Th-232, Th-228 from the Ra-228 and concentrating Ra-226 at the Mill using RadTran technologies. Recovered Ra-228, Th-228 and Ra-226 would then be sold to pharmaceutical companies and others to produce Pb-212, Ac-225, Bi-213, Ra-224 and Ra-223, which are the leading medically attractive TAT isotopes for the treatment of cancer. Existing supplies of these isotopes…



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