- $61.35 million of total
revenue, representing an increase of 33% over 2014.
- Gross Profit of $23.73 million
from uranium recovery operations, representing an increase of 45%
over 2014.
- 1,075,000 pounds of uranium sales at an average realized
price of $56.43 per pound,
representing an increase in pounds sold of 34% over 2014.
- 468,000 pounds of U3O8 recovered,
representing an increase over previously published
guidance.
- Strong balance sheet including $34.87
million of working capital at December 31, 2015.
- After year end, the Company completed an equity financing
for net proceeds of $10.88 million
after commissions and estimated expenses of the offering.
- Proposed acquisition of Mesteña Uranium, LLC expected to
expand Energy Fuels' lower-cost ISR scalability.
- Proposed acquisition of remaining 40% of Roca Honda Project
expected to significantly increase Energy Fuels' scalability and
leverage to future increases in the price of uranium.
LAKEWOOD, CO, March 15, 2016 /CNW/ - Energy Fuels Inc.
(NYSE MKT:UUUU; TSX:EFR) ("Energy Fuels" or the "Company"),
today reported its financial results for the year ended
December 31, 2015. The
Company's Annual Report on Form 10-K 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 US dollars.
Conversion from IFRS to U.S. GAAP
As a result of the Company's June
2015 acquisition of Uranerz Energy Corporation ("Uranerz"),
the Company ceased to qualify as a 'foreign private issuer' for SEC
reporting purposes as of January 1,
2016. Therefore, effective January 1,
2016, the Company became a 'U.S. domestic issuer' for SEC
reporting purposes and is therefore required to comply with SEC
reporting obligations applicable to US companies, including filing
an Annual Report on Form 10-K for Fiscal Year 2015 and preparing
its financial statements in accordance with United States Generally
Accepted Accounting Principles ("U.S. GAAP"). All prior
financial statements and selected financial data have been
converted from International Financial Reporting Standards ("IFRS")
into U.S. GAAP for all periods required to be presented in the
financial statements and selected financial data.
Stephen P. Antony, Energy
Fuels' President and CEO stated: "2015 was another
important year for Energy Fuels, as we believe we have now cemented
our position as the leading integrated uranium producer in the
U.S. In 2015, as mineral extraction was completed at our
Pinenut mine, shaft sinking activities resumed at the Canyon mine,
which, when brought into production, is expected to be one of our
lowest cost sources of production. In June 2015, we also became an ISR producer through
our acquisition of Uranerz, and the Nichols Ranch Project continues
to meet – and exceed – the high expectations we had when we first
acquired it. Now, we are in the process of acquiring Mesteña
Uranium, another ISR uranium company which owns the Alta Mesa
Project and processing facility in Texas, thereby further expanding our
lower-cost scalability. Through 2015, Energy Fuels was also
able to maintain our gross profit margins, working capital, and
strong sales to major nuclear utilities."
"While Energy Fuels' uranium production and sales operations
performed well in 2015, uranium prices were largely stagnant, and
remain weak today. The long awaited recovery in uranium
prices has yet to materialize, though we are confident it will
happen as the World continues to invest heavily in new nuclear
capacity. While we await the expected recovery, our strategy
is to utilize our lowest cost sources of uranium production and
continue to build our uranium scalability, especially at the lower
end of our cost curve. Indeed, once we complete our
acquisition of Mesteña, Energy Fuels will have over 11.5 million
pounds of annual licensed processing capacity at three
facilities. And, with the expected acquisition of the
remaining 40% interest in the Roca Honda Project, we will obtain
100% control over more than 25 million pounds of uranium resources,
which are in an advanced stage of permitting and which are capable
of being processed at our White Mesa Mill. I would argue that
no other company can provide similar optionality and leverage to
improving uranium markets."
Financial and Operational Highlights for the Year Ended
December 31, 2015:
- $61.35 million of total revenue
was realized by the Company, representing an increase of 33% over
2014 results.
- At December 31, 2015, the Company
had $34.87 million of working
capital, including cash and cash equivalents of $12.97 million and approximately 520,000 pounds
of uranium concentrate inventory.
- Gross Profit of $23.73 million
from mining and milling operations was realized by the Company,
representing an increase of 45% over 2014 results.
- Gross profit margin from uranium recovery operations of
approximately 39%, representing an increase of 4% over 2014
results.
- A net loss attributable to the Company of $82.22 million, primarily as a result of a
$58.72 million impairment of
goodwill, property, plant and equipment (as discussed below) and
one-time costs of $6.89 million
associated with the Company's acquisition of Uranerz.
- 1,075,000 pounds of U3O8 sales were
completed by the Company at an average realized price of
$56.43 per pound. 1,025,000 pounds of
sales were pursuant to long-term contracts at an average price of
$57.39 per pound and 50,000 pounds of
sales were from a spot sale at a price of $37.35 per pound.
- 468,000 pounds of U3O8 recovered,
representing an increase over previously published guidance, due
primarily to higher than expected recoveries at the White Mesa
Mill.
- The Company resumed shaft sinking operations at its Canyon
Project in September 2015. The shaft,
which is expected to be constructed to a total depth of 1,470 feet,
is at a depth of approximately 640 feet, as of March 7, 2016. Underground drilling to further
evaluate the Canyon deposit is expected to occur in mid-2016, as
the Company reaches the mineralized zone.
- The Company completed construction and licensing of the elution
circuit at the Nichols Ranch Project in February 2016. Energy Fuels now has 100%
self-contained ISR processing capabilities, which is expected to
significantly lower the Company's future costs of production on a
per pound basis by avoiding 3rd party toll processing
fees.
- As previously reported, the Company tested its goodwill related
to the June 2015 acquisition of
Uranerz, along with its plant, property and equipment related to
the Company's conventional segment for impairment. As a result, the
Company recognized an impairment loss of $58.72 million for 2015, primarily due to
continued uranium price weakness, general uranium sector weakness,
and a decrease in the Company's market capitalization.
- On March 7, 2016, the Company
announced that it has entered into a definitive agreement ("DA") to
acquire Mesteña Uranium, LLC ("Mesteña"), a well-known,
closely-held uranium supplier that operates the Alta Mesa ISR
Project in South Texas. Under the
terms of the DA, Energy Fuels will issue 4,551,284 common shares of
the Company to the current owners of Mesteña. The closing of the
transaction is expected to occur on or before May 4, 2016, subject to the receipt of all
applicable regulatory and stock exchange approvals and the
satisfaction of certain other conditions to closing. The
acquisition of Mesteña is expected to expand Energy Fuels'
lower-cost uranium recovery operations. Mesteña is currently on
standby and will resume uranium recovery operations upon sufficient
improvement in uranium prices.
- On March 4, 2016, the Company
announced that it had entered into a non-binding letter of intent
("Letter of Intent") with Sumitomo Corporation to acquire its 40%
interest in the Roca Honda Project for: (i) $1.0 million in cash; (ii) a number of common
shares of the Company equal to $1.5
million; and; (iii) once commercial mineral extraction is
first commenced at the Roca Honda Project, an additional
$4.5 million of cash payable at that
time. Closing of the acquisition is expected to occur in
April 2016, and is conditional upon
final Sumitomo approvals, negotiation and execution of definitive
agreements and receipt of applicable regulatory and stock exchange
approvals. Upon completion of this acquisition, the Company will
own 100% of the Roca Honda Project, which is one of the largest and
highest-grade uranium projects in the U.S. and in an advanced stage
of permitting. Once constructed, the project is expected to produce
an average of 2.7 million pounds of uranium over a 9-year mine
life, all of which can be processed at the Company's 100%-owned
White Mesa Mill. Furthermore, this acquisition will significantly
increase the Company's Measured, Indicated, and Inferred Mineral
Resource totals.
- On March 14, 2016, the Company
closed an equity financing, under which it raised net proceeds of
$10.88 million, after commissions and
estimated expenses of the offering, through the issuance of
5,031,250 units (which includes 656,250 units that were issued upon
the exercise, in full, of the over-allotment option that was
granted to the underwriters), with each unit consisting of one
common share and one half of one common share purchase warrant, at
a price of $2.40 per unit. Each
warrant will be exercisable for three years following the closing
date and will entitle the holder thereof to acquire one common
share of the Company upon exercise at an exercise price of
$3.20 per share. The current
intention is to use the net proceeds from this financing to: (i)
continue to fund wellfield construction at the Company's Nichols
Ranch Project; (ii) continue to finance shaft sinking and
evaluation at the Company's high-grade Canyon Project; (iii) fund
costs associated with the proposed acquisition of Mesteña; (iv)
fund the cash portion of the proposed acquisition of the remaining
40% of the Roca Honda Project; and (v) for general corporate needs
and working capital requirements.
Termination of At-the-Market Facility
Upon the filing of the Form 10-K for 2015 with the SEC, the
Company's "at-the-market" ("ATM") facility, which was filed under a
prospectus supplement to the Company's existing Canadian base shelf
prospectus and registration statement on Form F-10, terminated and
is no longer effective. Under the ATM, the Company was
authorized to sell up to $15.64
million worth of common shares by means of ordinary brokers'
transactions or block trades. The Company sold $3.39 million of common shares through the ATM,
of which $2.87 million was sold in
2015.
Selected Summary Financial Information:
|
|
|
|
$000, except per
share data
|
Year ended
December 31,
2015
|
Year ended
December 31,
2014
|
Year ended
December 31,
2013
|
Results of
Operations:
|
|
|
|
|
|
|
|
Total
revenues
|
$
|
61,351
|
$
|
46,253
|
$
|
64,321
|
|
Gross
profit
|
|
23,734
|
|
16,346
|
|
5,527
|
|
Net loss attributable
to the company
|
|
(82,217)
|
|
(86,635)
|
|
(36,590)
|
|
Basic and diluted
earnings (loss) per share
|
|
(2.46)
|
|
(4.41)
|
|
(2.27)
|
|
|
|
|
|
|
|
$000's
|
As at December
31,
2015
|
As at December
31,
2014
|
As at December
31,
2013
|
Financial
Position:
|
|
|
|
|
|
|
|
Working
capital
|
$
|
34,869
|
$
|
37,835
|
$
|
35,200
|
|
Property, plant and
equipment
|
|
29,069
|
|
735
|
|
61,747
|
|
Mineral
properties
|
|
91,031
|
|
60,512
|
|
79,954
|
|
Total
assets
|
|
192,280
|
|
128,589
|
|
216,780
|
|
Total long-term
liabilities
|
|
38,675
|
|
21,348
|
|
26,372
|
Overview
With the June 2015 acquisition of
Uranerz, which includes the Nichols Ranch Project, Energy Fuels has
increased its flexibility to adjust its recovery of uranium to
respond to market conditions and to meet the requirements of its
sales contracts. As a result, the Company has expanded its
ability to bring additional uranium extraction and recovery on line
within months after a decision is made. This allows the
Company to efficiently fulfill its existing commitments and commit
to new spot and term sales that will be sourced from uranium
recovered from the Company's facilities.
Extraction and Recovery Activities – Overview
The Company expects to recover approximately 950,000 pounds of
finished U3O8 for the year ending
December 31, 2016, as further
described below.
The Company currently has finished goods inventory and uranium
extraction and recovery capabilities that exceed the commitments
contained in its existing sales contracts. As a result, both
ISR and conventional uranium extraction and/or recovery have been,
and are expected to continue to be, maintained at conservative
levels 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 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.
Extraction and Recovery – ISR Uranium Segment
The Company expects the Nichols Ranch Project to extract and
recover approximately 350,000 pounds of finished
U3O8 for the year ending December 31, 2016.
At December 31, 2015, the Nichols
Ranch Wellfields had six header houses extracting uranium.
The Company plans to complete three additional header houses by the
end of 2016. The Company has completed all monitor wells in
Production Area #2.
Permitting of the adjacent Jane Dough Property is continuing and
is expected to be completed well in advance of our need to begin
wellfield construction. Also, the Hank Project is fully
permitted to be constructed as a satellite facility to the Nichols
Ranch Plant.
Extraction and Recovery – Conventional Uranium
Segment
The Company expects the White Mesa Mill to recover approximately
600,000 pounds of finished U3O8 for the year
ending December 31, 2016.
The Company is planning to recover approximately 350,000 pounds
of U3O8 which was extracted from its Pinenut
Project. Shipment of this material to the Mill was completed
in March 2016. The Pinenut
Project is now fully depleted, and the Company has commenced
reclamation activities.
During 2016, the Company also expects to recover approximately
250,000 pounds of U3O8 from alternate feed
materials.
The White Mesa Mill has historically operated on a campaign
basis, whereby uranium recovery is scheduled as mill feed, cash
needs, contract requirements, and/or market conditions may
warrant. Once the processing for 2016 concludes (expected to
be in late 2016), the Company expects to place uranium recovery
activities at the Mill on standby until additional mill feed
becomes available. The Mill will dry and package material
from the Nichols Ranch Plant and continue to receive and stockpile
alternate feed materials for future milling campaigns.
The Company has re-started shaft sinking activities at its
Canyon Project. Once the shaft depth approaches the
mineralized zone, we plan to complete additional exploration
drilling to further evaluate the deposit. 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.
The Company expects to continue to pursue permitting activities
at certain of its conventional projects, including the Roca Honda
Project in New Mexico and the
Sheep Mountain Project in Wyoming. 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.
Finally, the Company plans to continue to maintain, and update
as necessary, all permits on its standby properties. These
properties will remain on standby until market conditions improve
such that the material can be sold at prices that support
extraction.
Sales
For 2016, the Company forecasts sales under its existing
long-term contracts to total approximately 550,000 pounds of
U3O8. The prices for material sold
under the existing long-term contracts is either fixed or at
floors. The average sales price under the Company's long-term
contracts is expected to be higher in 2016 than 2015 levels.
The Company expects to complete these sales from both
U3O8 already in inventory or to be recovered
from its planned activities discussed above. The Company is
currently monitoring market conditions for additional sales
opportunities. Selective spot sales are expected to be made
as necessary to generate cash for operations and development
activities discussed above.
In 2017, the Company expects to have existing inventory or
expected production to meet all of its commitments to sell 620,000
pounds of uranium under its existing long-term contacts at average
sales prices higher than 2015 levels.
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 Plant 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 Plant
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 one producing ISR project, 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 NON-US GAAP FINANCIAL PERFORMANCE MEASURES
The Company has included the additional non-US GAAP 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 ; the expected completion
and expected benefits from the planned Mesteña and Roca Honda acquisitions; the expected
development and evaluations at the Canyon Project; the expected
costs at the Company's Nichols Ranch Project, Canyon Project, and
other projects and facilities; expectations that sufficient mill
feed will be available to sustain future campaigns at the White
Mesa Mill; expectations relating to the possible expansion of the
Company's alternate feed business; and expectations 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; the risk of failure to complete or realize
the expected benefits from the planned Mesteña and Roca Honda acquisitions; risks associated with
the expected development and evaluations at the Canyon Project;
risks associated with estimated expected costs at the Company's
Nichols Ranch Project, Canyon Project, and other projects and
facilities; the risk that sufficient mill feed will not be
available to sustain future campaigns at the White Mesa Mill; the
risk that uranium prices will not reach the levels required to
justify further development or production at the Company's
projects, including the White Mesa Mill, the Nichols Ranch Project,
and the Roca Honda Project; the risk that the Company will not be
able to enter into suitable term uranium sales contracts in the
future to support future development and production decisions; and
the other factors described under the caption "Risk Factors" in the
Company's Annual Report on Form 10-K dated March 15, 2016, 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.
CAUTIONARY NOTE TO UNITED
STATES INVESTORS CONCERNING ESTIMATES OF MEASURED, INDICATED
AND INFERRED RESOURCES
This news release contains certain disclosure that has been
prepared in accordance with the requirements of Canadian securities
laws, which differ from the requirements of U.S. securities
laws. Unless otherwise indicated, all reserve and resource
estimates included in this news release have been prepared in
accordance with Canadian National Instrument 43-101 – Standards of
Disclosure for Mineral Projects ("NI 43-101") and the Canadian
Institute of Mining, Metallurgy and Petroleum ("CIM")
classification system. Canadian standards, including NI
43-101, differ significantly from the requirements of U.S.
securities laws, and reserve and resource information contained in
this news release may not be comparable to similar information
disclosed by companies reporting only under U.S. standards.
In particular, the term "resource" does not equate to the term
"reserve" under SEC Industry Guide 7. United States investors are cautioned not to
assume that all or any of Measured or Indicated Mineral Resources
will ever be converted into mineral reserves. Investors are
cautioned not to assume that all or any part of an "Inferred
Mineral Resource" exists or is economically or legally
minable. Energy Fuels does not hold any Reserves as that term
is defined by SEC Industry Guide 7. Please refer to the
section entitled "Cautionary Note to United States Investors
Concerning Disclosure of Mineral Resources" in the Company's Annual
Report on Form 10-K dated March 15,
2016 for further details.
SOURCE Energy Fuels Inc.