DENVER, Aug. 3, 2018 /CNW/ - Energy Fuels Inc.
(NYSE American: UUUU; TSX: EFR) ("Energy Fuels" or the
"Company"), today reported its financial results for the
quarter ended June 30, 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 June 30, 2018, the Company had
$55.25 million of working capital,
including cash and cash equivalents of $43.2
million and approximately 225,000 pounds of uranium
concentrate inventory.
- $26.9 million of total revenue
was realized by the Company during the quarter, due primarily to
the advancement of future deliveries under long-term contracts into
the quarter.
- Primarily as a result of these high revenues, the Company
reported net income of $7.1 million
for the quarter.
- 500,000 pounds of U3O8 deliveries were
completed by the Company for the three months ended June 30, 2018 at an average realized price of
$53.55 per pound. On April 1, 2018, the Company delivered 400,000 lbs.
of U3O8 into long-term sales contracts at the
price of $61.30 per pound, resulting
in the receipt of over $24.5 million
on May 1, 2018. In addition, on
June 15, 2018 the Company delivered
100,000 lbs. of U3O8 into a spot contract at
$22.57 per pound.
- Uranium production for our own account totaled 128,000 pounds
of U3O8 during the quarter, plus another
91,000 pounds of U3O8 for the accounts of
others.
- 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, of which $196,000
has been earned or recovered to date.
Mark S. Chalmers, Energy
Fuels' President and CEO stated:
"The past quarter was extremely productive for Energy Fuels. We
completed a large quantity of uranium deliveries, and as a result
we are reporting a profit for the quarter. And, due to a number of
factors discussed below, we have significantly improved our working
capital position to over $55
million.
"I am particularly excited about the progress of our Section 232
application and current vanadium opportunities. On July 18, 2018, the U.S. Department of Commerce
("DOC") initiated its investigation under Section 232 of the Trade
Expansion Act of 1962 in response to the Petition we and Ur-Energy
filed in January 2018. The Petition
seeks a remedy which would 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. The remedy, if granted, would be
expected to bolster national defense, further global
non-proliferation objectives, improve supply diversification for
U.S. utilities and their customers, and strengthen the U.S. uranium
mining industry.
"As the only company currently capable of producing vanadium in
North America, we are also very
excited about our current vanadium opportunities. As previously
reported, with spot prices nearing $20 per pound of V2O5, we
have decided to resume vanadium production in 2018 by recovering
solubilized vanadium from the White Mesa Mill's tailings and
evaporation ponds. We expect to initially recover approximately
500,000 lbs. of V2O5 in late-2018 or
early-2019, and given favorable costs, recoveries, and
then-prevailing market conditions, we expect to continue vanadium
recovery in 2019, recovering up to approximately 4 million lbs. of
V2O5 over the life of the project. For longer
term alternatives, we are evaluating other vanadium production
opportunities, including the processing of previously mined
uranium/vanadium stockpiles in the vicinity of the Mill, processing
other vanadium-bearing streams, and, with improved uranium prices,
the re-initiation of conventional uranium/vanadium mine production
from certain of our mines that contain large, high-grade vanadium
resources.
"These opportunities are exciting because they provide us with
unsurpassed optionality to increase uranium production as prices
rise, as well as allow us to take advantage of the recent
significant increases in vanadium prices.
"Finally, we were able to significantly strengthen our balance
sheet by joining the broad-market Russell 3000 Index®
during the Quarter. During the Russell rebalance period, we were
able to raise significant cash, while our stock outperformed our
peers. Inclusion in the Russell is expected to increase the
Company's liquidity, visibility and exposure to key institutional
investors. In addition, Energy Fuels has been able to maintain a
very strong working capital position, and we intend to use some of
these proceeds to repay all of our existing long-term Wyoming debt the third quarter of this
year."
Key Developments:
On May 8, 2018, the Company
announced that it intends to resume vanadium recovery operations at
the Company's White Mesa Mill in 2018. The Company expects to
recover significant quantities of currently dissolved vanadium from
the tailings and evaporation ponds at the White Mesa Mill.
On June 25, 2018, the Company
announced that it had been added as a member of the broad-market
Russell 3000® Index, as part of the 2018 Russell indexes
reconstitution. Annual reconstitution of the Russell indexes
captures the 3,000 largest U.S. stocks as of May 11, ranking them by total market
capitalization. Membership in the Russell 3000® Index, which
remains in place for one year, means automatic inclusion in the
large-cap Russell 1000® Index or small-cap Russell 2000® Index, as
well as the appropriate growth and value style indexes.
On July 18, 2018, the Company
announced that the Department of Commerce ("DOC") initiated an
investigation into the effects of uranium imports on U.S. national
security. The Company and Ur-Energy requested the investigation in
their Petition for Relief under Section 232 of the Trade Expansion
Act of 1962. The Company and Ur-Energy have proposed remedies that
would reserve 25% of the U.S. nuclear market for U.S. uranium
producers.
Selected Summary Financial Information:
|
|
|
|
|
|
$000, except per
share data
|
Three months
ended
June 30, 2018
|
Three months
ended
June 30, 2017
|
Results of
Operations:
|
|
|
|
Total
revenues
|
$
|
26,973
|
$
|
17,883
|
|
Net income (loss)
attributable to the company
|
7,149
|
(4,470)
|
|
Basic earnings (loss)
per share
|
0.09
|
(0.06)
|
|
Diluted earnings
(loss) per share
|
0.08
|
(0.06)
|
|
|
|
|
|
|
$000's
|
As at
June 30, 2018
|
As at
December 31, 2017
|
Financial
Position:
|
|
|
|
Working
capital
|
$
|
55,249
|
$
|
33,296
|
|
Property, plant and
equipment
|
31,416
|
33,076
|
|
Mineral
properties
|
83,539
|
83,539
|
|
Total
assets
|
202,776
|
185,338
|
|
Total long-term
liabilities
|
44,477
|
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 (uranium-bearing materials other than
conventional ores); 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 final remaining
sales contract.
In addition, the Company has a long history of conventional
vanadium recovery at the Mill when vanadium prices support those
activities. The Company is currently expecting to resume vanadium
recovery from pond solutions at the Mill later in 2018. The Company
is also evaluating opportunities for copper recovery from our
Canyon Project.
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 171,000
pounds of U3O8 were produced in the first six
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 82,000 pounds during the
first six months of 2018.
At June 30, 2018, the Nichols
Ranch wellfields had nine header houses extracting uranium. Until
such time as 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, of which we have recovered 89,000
lbs. 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, of which $196,000 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. The Company also plans to
recover vanadium from existing pond solutions in a manner similar
to the way the Company has recovered uranium from those same
solutions, and perhaps recover vanadium from other sources.
Vanadium Recovery
Vanadium is a metallic element that is used primarily as an
additive to strengthen and harden steel and other high-strength
alloys. In addition, the commercialization of grid energy storage
systems, including vanadium redox flow batteries, is catalyzing
growth in vanadium markets.
In addition to its planned vanadium recovery from pond solutions
at the Mill later in 2018 and in 2019, 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
At the Canyon Project, 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 quarter 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 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, reductions in corporate overheads, the
potential sale or abandonment of certain non-core properties and
the sale of excess mining equipment and other assets.
Trade Petition
In January 2018, the Company
participated in the filing of a Petition for Relief with the U.S.
Department of Commerce under Section 232 of the Trade Expansion Act
of 1962 (as amended) From Imports of Uranium Products that Threaten
U.S. National Security (the "Petition"). 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 a remedy 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.
On July 18, 2018, the U.S.
Department of Commerce ("DOC") initiated its investigation.
Pursuant to Section 232 of the Trade Expansion Act of 1962 (as
amended), starting on July 18, 2018,
the Secretary of the DOC has 270 days to prepare a report to the
President of the United States.
Following receipt of the Secretary's report, the President then has
90 days to act on the Secretary's recommendations, and if necessary
take action to "adjust the imports of an article and its
derivatives" and/or pursue other lawful non-trade related actions
to address the threat.
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 June 30,
2018, the Company completed deliveries of 500,000 pounds of
U3O8 at a weighted average price of
$53.55 per pound. 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, and on June 15, 2018, the Company completed the delivery
of 100,000 pounds of U3O8 under a spot
contract at $22.57 per pound, where
the price is based on the average spot price per pound of uranium
for the five weeks prior to the date of delivery. In the final six
months of the year, the Company expects to complete one delivery of
100,000 pounds of U3O8 in Q4 under a
contract, where the price is based on the average spot price per
pound of uranium for the five weeks prior to the date of delivery.
All of the deliveries completed were Company-produced pounds.
In Memoriam: Stephen P. Antony
(1950 – 2018)
It is with deep sadness that the Company announces the passing
of our former President and Chief Executive Officer, Stephen P. Antony. Mr. Antony was a key driving
force behind the growth of Energy Fuels and was instrumental in
creating what is today the largest uranium and vanadium producer in
the United States. His vision was
to consolidate the best uranium mines and production facilities in
the United States. Under Mr.
Antony's leadership, Energy Fuels acquired Magnum Uranium (2009),
Titan Uranium (2012), Denison Mines'
US Mining Division (2012), Strathmore Resources (2013), Uranerz
Energy (2015), and Mesteña Uranium (2016). Due in large part to Mr.
Antony's foresight and passion, Energy Fuels now holds three
uranium production facilities with over 12 million pounds of
licensed capacity, the only near-term vanadium production facility
in the United States, and a
portfolio of producing and near-producing mines and mineral
properties. The Company's Board, Management, and the entire Energy
Fuels team will greatly miss Steve's intelligence, energy,
integrity, and kindness.
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 standby. 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 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; optionality, 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; any expectations regarding vanadium production at the
Mill and other 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;
any expectations as to expenditures and cost reductions; any
expectations with respect to the repayment of outstanding
indebtedness; expectations of the Company to become or maintain its
position as a leading uranium company in the United States; any expected benefits from
inclusion in the Russell indexes; and any expectations with regard
to the outcome of the 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 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; optionality, 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; any expectations regarding vanadium production
at the Mill and other 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; any expectations as to expenditures and cost
reductions; any expectations with respect to the repayment of
outstanding indebtedness; expectations of the Company to become or
maintain its position as a leading uranium company in the United States; any expected benefits from
inclusion in the Russell indexes; any expectations with respect
to the outcome of the 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.