LAKEWOOD, CO, April 1, 2019 /CNW/ - Energy Fuels Inc.
(NYSE American: UUUU; TSX: EFR) ("Energy Fuels" or the
"Company"), a leading producer of uranium and vanadium in
the United States, is pleased to
provide the following update on the Company's ongoing vanadium
production programs.
The Highest Quality Vanadium Production in the History of the
White Mesa Mill:
Energy Fuels is currently producing a high-purity vanadium
product at commercial rates from the pond solutions at its
100%-owned White Mesa Mill (the "Mill"), the only conventional
vanadium processing facility located in the United States. The Mill has produced about
45 million pounds of vanadium pentoxide
("V2O5") during its nearly 40-year operating
history. As a result of facility upgrades and improved procedures
put in place in 2018, the Mill is currently producing the
highest-purity V2O5 in its history, averaging
approximately 99.6% V2O5, using innovative
approaches never utilized in the past to recover vanadium from its
existing pond solutions. The Company is currently selling this
vanadium (as ferrovanadium) into the steel industry, and it
continues to pursue opportunities to sell portions of this
high-purity material into specialty chemical and aerospace markets,
potentially at a premium to reported spot prices. The Company has
successfully implemented this efficient, low-cost method of
producing vanadium at the Mill with little capital exposure.
As previously reported, the Company estimates that a total of up
to four million pounds of recoverable V2O5
could reside in the Mill's pond solutions. This vanadium is
currently being recovered at commercial rates of approximately
150,000-160,000 pounds of V2O5 per month, and
as a result of expected seasonal influences, could increase to
approximately 200,000-225,000 pounds per month in the warmer, dryer
months of the year, settling back to current production rates in
the winter months. Average production rates, taking into account
these expected seasonal influences, are expected to be
approximately 160,000-200,000 pounds per month on an annualized
basis, which would exceed the average annualized production rates
during the last five full conventional vanadium ore runs at the
Mill since 2008, without having to mine a single ton of ore.
Conservatively allowing for the uncertainties associated with a new
project of this nature and the impacts of seasonal influences as
they unfold over the first full year of production, this is
expected to result in a total recovery over the life of the project
of approximately 2.5 million – 4.0 million pounds of
V2O5, subject to continued successful
recovery and supportive market conditions.
The Company is also pleased that it is able to achieve these
results at a production cost per pound of recovered
V2O5 at current production rates that is less
than originally budgeted, which is resulting in margins that exceed
original expectations, even at today's V2O5
prices of approximately $13.88 per
pound. If production rates increase as expected, the production
costs per pound would be expected to decrease, resulting in even
more attractive margins. In addition, of course, if vanadium prices
increase to recent levels, the margins would also improve.
This new source of vanadium recovery is also extremely flexible.
The Company is able to turn production on and off within a matter
of days, at little to no cost, in response to any changes in
vanadium market conditions. If the Company decides to defer or slow
down production, either due to a significant decline in the price
of V2O5, or if it decides to retain its
vanadium pond inventory for recovery and sale in potentially
improved market conditions, it has the flexibility to make those
decisions. If vanadium prices increase, production can then be
resumed very quickly in response. The Company considers this type
of production readiness/flexibility to be a great attribute of this
program, and to be very attractive in the typically volatile
vanadium market, with limited capital exposure.
Further Impressive Results from Test Mining Campaign at the La
Sal Complex:
Energy Fuels is also pleased to provide the following update on
activities at the Company's 100%-owned La Sal Complex of
uranium/vanadium mines (the "La Sal Complex"). Over the past
several months, the Company has been engaged in a limited
conventional vanadium test-mining program at the La Sal and Pandora mines, two connected mines
within the La Sal Complex, located in southeast Utah. In October
2018, the Company announced the initial results of the
test-mining program, including vanadium grades averaging 1.67%
V2O5 and uranium grades averaging 0.10%
U3O8 over about 420 tons of mineralized
material.
The Company is pleased to announce that, to date, it has mined
approximately 5,200 tons of mineralized material under this
test-mining program, and the grades observed early in the campaign
have held since that time, averaging approximately 1.60%
V2O5 and 0.19% U3O8.
While these numbers are not intended to represent the basis of a
new resource or reserve estimate of any kind, the Company believes
that the new mining methods being tested are likely to result in
reduced costs, higher grades, and higher value for mined material
due to significantly improved grade control at the mine site.
Furthermore, vanadium recoveries at the Mill increase as feed grade
increases. Therefore, the Company believes there is a good chance
that the Mill can increase average vanadium recoveries from mined
ores as compared to historic performance, as a result of this
improved grade control. The Company expects to deploy these new
mining techniques at full production rates once the Company makes
the decision to go back into full production at the La Sal Complex,
and other Company-owned, fully permitted and developed
uranium/vanadium mines on the Colorado Plateau, as market
conditions warrant.
Through the test-mining campaign, the Company refurbished the
Pandora and La Sal mines, so they
are now ready to enter full production shortly following a positive
commercial production decision. Due to the inherent volatility of
vanadium prices, the economics of these mines are expected to be
supported primarily by uranium sales contracts at prices higher
than today's spot price, which may result from generally improved
global uranium market conditions, or the ongoing government
investigation into uranium imports into the U.S. Once uranium
prices improve sufficiently, the Company expects to be able to
produce significant quantities of vanadium from these mines at
costs competitive to some of the lowest-cost primary vanadium mines
in the World, and in a more sustainable way than has been
achievable for our mines in the past, due to the new grade control
techniques developed during this campaign.
Vanadium Market Update:
Historically, over many decades, prices for vanadium have been
highly volatile, and they continue to be so today. The mid-point
spot price of V2O5 in Europe began 2018 at $9.75 per pound, reached a high of $28.83 per pound in November 2018, and ended 2018 at $15.50 per pound. In 2019, spot prices rose
through January, reaching a high of $17.38 per pound in February and early-March. At
the current time, the spot price of V2O5 in
Europe has dropped to $13.88 per pound. The global market for vanadium
is currently primarily guided by market fundamentals and government
policies in China. China is continuing to enforce strict new
environmental standards, which are having the effect of restricting
supply of vanadium. In addition, China is continuing to enforce new rebar
standards, which require the use of more vanadium and have the
effect of increasing demand. There is also a chance that
China will pursue new
infrastructure spending to spur economic growth, which would likely
have the effect of increasing demand for steel and rebar containing
vanadium. For these reasons, the Company believes there is a good
chance vanadium prices will strengthen in the coming months,
reaching or surpassing the higher levels seen earlier this
year.
The Company intends to continue to produce
V2O5 from its Mill pond solutions at today's
prices, which support attractive margins for the Company. We will
also closely monitor vanadium market conditions and sales
opportunities, including sales opportunities at a premium, and
adjust the Company's production and sales if necessary.
Mark S. Chalmers, President and
CEO of Energy Fuels stated: "We are extremely pleased with the
excellent results obtained thus far on our significant vanadium
assets, creating substantial value for the Company. Our campaign to
recover vanadium from pond solutions at the White Mesa Mill is
going very well. Product purities are higher than expected,
production costs are lower than expected, and vanadium prices
remain at high levels. We also have the ability to adjust our
vanadium production very easily in response to changing market
conditions. This production readiness and flexibility is a key
attribute when dealing with minor metals like vanadium. It allows
us to be able to produce or conserve our vanadium, as we see fit,
in response to market volatility.
"We also believe we have shifted the paradigm for both mining
and processing of uranium/vanadium deposits on the Colorado
Plateau, including our fully permitted and developed mines at the
La Sal Complex as well as two of our other fully permitted mines
nearby. This will become even more important to Energy Fuels if the
Trump Administration decides to help support domestic uranium
mining through the ongoing Section 232 investigation into uranium
imports. This could result in uranium sales contracts at prices
that would support commencing full-scale production from these
mines at current or lower vanadium prices. And, if vanadium prices
rise further – which they could at any time – we will be in the
enviable position of being able to fully capitalize on those higher
prices almost immediately.
"We are first and foremost a uranium producer. But in addition,
our successful re-establishing of the Company as the only primary
producer of vanadium in North
America through our innovative Mill pond-return program, and
our ability to capitalize on high vanadium prices through our
uranium/vanadium mines when producing, highlights the unique
optionality of Energy Fuels, in addition to our unsurpassed uranium
mining readiness and capacity and our uranium recycling and
clean-up businesses. These key attributes significantly
differentiate our Company from a typical 100% uranium-only play. We
are extremely proud of these other aspects of our business model,
which provide value to our shareholders in unique and creative ways
during periods of low uranium prices and which also complement our
uranium production activities during periods of higher uranium
prices."
About Energy Fuels: Energy Fuels is a leading
US-based uranium mining company, supplying
U3O8 to major nuclear utilities. The Company
also produces vanadium from certain of its projects, as market
conditions warrant. Its corporate offices are in Denver, Colorado, and all of its assets and
employees are in the United
States. Energy Fuels holds three of America's key uranium
production centers, the White Mesa Mill in Utah, the Nichols Ranch in-situ recovery
("ISR") Project in Wyoming, and
the Alta Mesa ISR Project in Texas. The White Mesa Mill is the only
conventional uranium mill operating in the U.S. today, has a
licensed capacity of over 8 million pounds of
U3O8 per year, and has the ability to produce
vanadium when market conditions warrant. The Nichols Ranch ISR
Project is in operation and has a licensed capacity of 2 million
pounds of U3O8 per year. The Alta Mesa ISR
Project is currently on standby. In addition to the above
production facilities, Energy Fuels also has one of the largest NI
43-101 compliant uranium resource portfolios in the U.S., and
several uranium and uranium/vanadium mining projects on standby and
in various stages of permitting and development. 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 Note Regarding Forward-Looking
Statements: Certain information contained in this news
release, including any information relating to: the Company being a
leading producer of uranium and vanadium in the U.S.; any
expectations about pounds of vanadium that may be recovered at the
White Mesa Mill, including current and expected rates of production
and the total amount of vanadium expected to be recovered from the
Mill's pond solutions; any expectations relating to the product
quality or purity of the recovered vanadium; any
expectations regarding the Company's expected costs of production,
margins, sales strategy, and/or ability to maximize profits on
vanadium, including conversion to ferrovanadium for sale into the
metallurgical market and/or sales into the aerospace, chemical or
energy storage industries, at a premium to spot prices or
otherwise; the Company's ability to turn production on and off
within a matter of days, at little to not cost, in response to any
changes in vanadium market conditions; any expectation that the new
mining methods being tested are likely to result in reduced costs,
higher grades, and higher value for mined material due to
significantly improved grade control at the mine site; any
expectation that the Mill may be able to increase average vanadium
recoveries from mined ores as compared to historic performance, as
a result of improved grade control resulting from the test-mining
program; any expectation that the Company may be able to deploy
these new mining techniques at full production rates; any
expectation that the Company may be able to produce significant
quantities of vanadium from any of its mines at costs competitive
to some of the lowest cost primary vanadium mines in the World; any
expectations regarding current and/or future vanadium markets,
including whether current vanadium prices may continue to support
production and increase in the future; any expectations about the
ongoing Section 232 Investigation, including any remedies that may
be granted thereunder, and any expectation that any such remedies
may result in uranium sales contracts at sufficient prices to
justify production at any of the Company's mines; and any
other statements regarding Energy Fuels' future expectations,
beliefs, goals or prospects; constitute forward-looking information
within the meaning of applicable securities legislation
(collectively, "forward-looking statements"). All statements in
this news release that are not statements of historical fact
(including statements containing the words "expects", "does not
expect", "plans", "anticipates", "does not anticipate", "believes",
"intends", "estimates", "projects", "potential", "scheduled",
"forecast", "budget" and similar expressions) should be considered
forward-looking statements. All such forward-looking statements are
subject to important risk factors and uncertainties, many of which
are beyond Energy Fuels' ability to control or predict. A number of
important factors could cause actual results or events to differ
materially from those indicated or implied by such forward-looking
statements, including without limitation factors relating to: the
Company being a leading producer of uranium and vanadium in the
U.S.; any expectations about pounds of vanadium that may be
recovered at the White Mesa Mill, including current and expected
rates of production and the total amount of vanadium expected to be
recovered from the Mill's pond solutions; any expectations relating
to the product quality or purity of the recovered vanadium;
any expectations regarding the Company's expected costs of
production, margins, sales strategy, and/or ability to maximize
profits on vanadium, including conversion to ferrovanadium for sale
into the metallurgical market and/or sales into the aerospace,
chemical or energy storage industries, at a premium to spot prices
or otherwise; the Company's ability to turn production on and off
within a matter of days, at little to not cost, in response to any
changes in vanadium market conditions; any expectation that the new
mining methods being tested are likely to result in reduced costs,
higher grades, and higher value for mined material due to
significantly improved grade control at the mine site; any
expectation that the Mill may be able to increase average vanadium
recoveries from mined ores as compared to historic performance, as
a result of improved grade control resulting from the test-mining
program; any expectation that the Company may be able to deploy
these new mining techniques at full production rates; any
expectation that the Company may be able to produce significant
quantities of vanadium from any of its mines at costs competitive
to some of the lowest cost primary vanadium mines in the World; any
expectations regarding current and/or future vanadium markets,
including whether current vanadium prices may continue to support
production and increase in the future; any expectations about the
ongoing Section 232 Investigation, including any remedies that may
be granted thereunder, and any expectation that any such remedies
may result in uranium sales contracts at sufficient prices to
justify production at any of the Company's mines; and other
risk factors as described in Energy Fuels' most recent annual
report on Form 10-K and quarterly financial reports. Energy
Fuels assumes no obligation to update the information in this
communication, except as otherwise required by law. Additional
information identifying risks and uncertainties is contained in
Energy Fuels' filings with the various securities commissions which
are available online at www.sec.gov and www.sedar.com.
Forward-looking statements are provided for the purpose of
providing information about the current expectations, beliefs and
plans of the management of Energy Fuels relating to the future.
Readers are cautioned that such statements may not be appropriate
for other purposes. Readers are also cautioned not to place undue
reliance on these forward-looking statements, that speak only as of
the date hereof.
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SOURCE Energy Fuels Inc.