Southern Cross Gold Consolidated Ltd. press release
Energy Fuels Announces 2022 Results; Emerging as the Leading US Producer of Critical Minerals with Focus on Uranium and Rare Earth Elements
TSX - Toronto Stock Exchange · Australia
Canada NewsWire
Webcast on March 10, 2023
Preparing multiple uranium mines for production, completing profitable sales & developing rare earth refining capacity to power up to 1 million EVs per year by late-2023 or early-2024, while strengthening the balance sheet and avoiding debt.
LAKEWOOD, Colo. , March 8, 2023 /CNW/ - Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) ("Energy Fuels" or the "Company") today reported its financial results for the year ended December 31, 2022. 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 U.S. dollars.
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Financial Highlights:
At December 31, 2022 , the Company had a robust balance sheet with $116.97 million of working capital, including $62.80 million of cash and cash equivalents, $12.19 million of marketable securities, $38.16 million of inventory, and no debt. At current commodity prices, the Company's product inventory has a value of $62.48 million ; During the year ended December 31, 2022 , the Company incurred a net loss of $59.85 million or $0.38 per share, due in large part to: i) a non-cash mark-to-market loss on investments accounted for at fair value of $16.90 million ; ii) increased expenses associated with preparing four(4) of our uranium mines for production; iii) development expenses associated with developing commercial rare earth element (" REE ") separation capabilities in addition to our existing mixed REE carbonate (" RE Carbonate ") commercial production capabilities; (iv) expenses associated with advancing our medical isotope initiatives;(v) increased selling, general and administrative expenses arising from costs associated with acquiring the South Bahia monazite sand project in Brazil (the " Bahia Project ") and costs associated with the sale of the Company's Alta Mesa in situ recovery (" ISR ") project in Texas ; and (vi) increased other selling, general and administrative expenses associated with significant additions to personnel, enhanced business processes, and other general and administrative expenses required to support all these increased levels of activity. The Company held 1,027,000 pounds of finished uranium (" U 3 O 8 ") inventory at year end, along with approximately 985,000 pounds of finished vanadium (" V 2 O 5 ") inventory. At March 8, 2023 , following sale and purchase transactions discussed below, the Company held 847,000 pounds of U 3 O 8 and approximately 945,000 pounds of V 2 O 5 inventory.
Uranium Highlights:
During 2022, the Company produced 162,000 pounds of U 3 O 8 at its White Mesa Mill in Utah (the " Mill ") and remains the largest producer of uranium in the U.S. During 2022, the Company was awarded four (4) new uranium supply contracts, with deliveries beginning in 2023, of which three (3) are long-term contracts with U.S. nuclear utilities and one (1) is with the U.S. government to supply the newly established strategic U.S. Uranium Reserve (" U.S. Uranium Reserve "). In January 2023 , the Company completed the sale of 300,000 pounds of U.S.-origin U 3 O 8 to the U.S. Uranium Reserve realizing total gross proceeds of $18.47 million , or $61.57 per pound of U 3 O 8 , resulting in an expected margin of approximately $35.85 per pound of uranium. During Q4-2022 and Q1-2023, the Company purchased a total of 301,052 pounds. of U.S.-origin U 3 O 8 on the spot market for a weighted-average price of $50.08 per pound. During 2022, the Company made significant progress in preparing four (4) of its conventional uranium and uranium/vanadium mines to be ready to resume uranium ore production, including significant workforce expansion and performing needed rehabilitation of surface and underground infrastructure. On February 15, 2023 , the Company announced it had completed its previously announced sale of its Alta Mesa ISR Project to enCore Energy Corp. (" enCore ") for total consideration of $120 million , comprised of $60 million in cash and $60 million in a secured convertible note bearing interest at a rate of eight percent (8%) per annum, convertible into common shares of enCore at a price of $2.9103 per share. This sale of a lower priority project provides Energy Fuels with significant additional cash and working capital, enabling the Company to ramp-up its US industry-leading uranium and REE production, while avoiding dilution to shareholders.
Rare Earth Element Highlights:
During 2022, the Company produced approximately 205 metric tons (" MT ") of high-purity, partially separated RE Carbonate from monazite, containing approximately 95 MT of total rare earth oxides (" TREO "), which is the most advanced REE material being produced commercially in the U.S. today. In Q4-2022, the Company received approximately 600 MT of monazite, which is expected to be processed into 375 to 485 MT of RE Carbonate, containing 175 to 225 MT or TREO, during 2023. In early 2023, the Company began modifying and enhancing its existing solvent extraction (" SX ") circuits at the Mill to be able to produce separated REE oxides (" Phase 1 "). "Phase 1" is expected to be completed and fully commissioned by late 2023 or early 2024 and have the capacity to produce roughly 800 to 1, 000 MT of recoverable separated neodymium-praseodymium (" NdPr ") oxide per year, subject to securing sufficient monazite feed, or enough to provide the permanent magnets to power up to 1 million electric vehicles (" EVs ") per year, which is expected to position the Company as one of the world's leading producers of NdPr outside of China . "Phase 1" capital costs are expected to total approximately $25 million . The Company is also proceeding with engineering on further enhancements to expand NdPr production capability (" Phase 2 ") by 2026 and to produce separated dysprosium (" Dy "), terbium (" Tb ") and potentially other REE materials in the future (" Phase 3 ") from monazite and potentially other REE process streams by 2027. On February 13, 2023 , the Company announced it had completed its previously announced acquisition of a large heavy mineral project in Brazil (the " Bahia Project "), which has the potential to supply the Company's growing REE business with significant quantities of REE-bearing natural monazite sand for decades. The Bahia Project also contains significant quantities of high-value titanium (ilmenite and rutile) and zirconium (zircon) minerals. The Company is currently in active discussions with several additional suppliers of natural monazite around the world to significantly increase the supply of feed for our growing REE initiative.
Vanadium Highlights:
During 2022, the Company sold approximately 642,000 pounds of existing V 2 O 5 inventory (as ferrovanadium, " FeV "), for an average weighted net price of $13.67 per pound of V 2 O 5 .
Medical Isotope Highlights:
The Company continued advancing its program to evaluate the potential to recover radioisotopes from its process streams for use in emerging targeted alpha therapy (" TAT ") cancer therapeutics.
Mark S. Chalmers , Energy Fuels' President and CEO, stated:
"2022 was an extraordinary year for Energy Fuels as we expanded our US industry-leading uranium business and established a new, sustainable US rare earth supply chain that is already commercially producing the most advanced rare earth material in the US today. We believe we have clearly emerged as one of the leading U.S. critical mineral companies, producing many of the raw materials needed for the clean energy transition.
"In 2022, positive uranium market fundamentals were magnified by concerns over security of supply, potentially creating new market dynamics for nuclear fuel. Nations around the world are embracing nuclear, as it provides clean, carbon-free electricity on a 24/7 basis, making it indispensable in the fight against climate change. Existing uranium mines globally are depleting, and underinvestment in new mines globally over the past several years could cause supply shortfalls in the coming years. These market fundamentals alone are the best I've seen in decades. Then, just over a year ago, Russia invaded Ukraine . Regrettably, the world has allowed Russian state-owned entities to exert disproportionate influence over global uranium and nuclear fuel supply chains over the past several years. Our company has been a leader warning about the inherent risks of such dependence since at least 2017. Most governments and utilities are taking concrete action to stop funding Russia's war effort in Ukraine through uranium and nuclear fuel purchases. Energy Fuels continues to stand ready to supply and increase the availability of secure, US-produced uranium.
"We have been very active in the uranium space over the past year. In 2022, we began readying several of our conventional uranium and uranium/vanadium mines for production. We have hired about 30 people, and we are making the investments required to put one or more of these facilities into production as soon as later this year. We were also the only U.S. company to produce material quantities of uranium in 2022, having produced 162,000 pounds during Q4-2022, far more than any other company in the U.S. We are proud to have had the opportunity to sell 300,000 pounds of U.S.-produced uranium to the newly established strategic U.S. Uranium Reserve, which is a small but important step in re-establishing the U.S. nuclear fuel capabilities that will allow us to reduce our reliance on Russian uranium imports. We also have another 260,000 pounds of uranium deliveries to a U.S. utility later this year. Our strong uranium inventory position, which currently sits at 847,000 pounds along with another approximately 351,000 pounds contained in ore on the pad at the Mill, together with planned production, will allow us to meet contract deliveries over the life of those contracts, while also providing the flexibility to sell into the spot market and sign new long-term contracts under favorable market conditions.
"2022 was also an incredible year for our rare earth business. No other company is making progress like Energy Fuels in the rare earth space. We continued to produce and optimize our production of partially separated mixed RE Carbonate, though we produced less than expected due to a delay in deliveries that pushed late-2022 production into early-2023. We announced that we are beginning development of a rare earth separation circuit at the Mill that is expected to be commissioned in late-2023 or early-2024. Once operational, this circuit will have the capacity to produce up to 1, 000 MT of refined NdPr oxide per year, or enough for up to one million EVs per year. We are also securing the monazite required to feed our rare earth infrastructure, including our recent acquisition of the Bahia Project -- a large rare earth, titanium and zirconium project in Brazil -- with additional third-party purchases of monazite from Chemours and others expected to be in the pipeline. Today, Energy Fuels' mixed RE Carbonate is already the most advanced rare earth material commercially produced in the U.S. If we continue to be successful, no other U.S. company will be producing commercial quantities of refined NdPr products ready for offtake as quickly as Energy Fuels.
"We opportunistically sold some of our vanadium inventory in 2022, and we are looking to potentially sell more with V 2 O 5 prices gaining strength recently. Further, our medical isotope initiative is continuing to progress well, and we hope to have more announcements on this very soon.
"Finally, we continue to manage our cash, assets, and working capital to achieve all these heightened initiatives. We take pride in maintaining a strong balance sheet and maintaining the flexibility to do big things. At the end of 2022, we had about $117 million of working capital, with inventories considerably worth more if you apply today's market prices for uranium and vanadium. In January 2023 , we completed the sale of 300,000 pounds of U 3 O 8 to the U.S. Department of Energy for $18.5M . In February 2023 , we closed on the sale of our Alta Mesa property in Texas , adding another $120 million to our treasury. Of this, $60 million is in cash and $60 million is in a convertible note bearing interest at eight percent per annum, or about $4.8 million per year.
"We accomplished a great deal over the past year, but this is just the beginning. We have market, geopolitical, and societal tailwinds behind all the commodities we produce, and we fully intend to continue building our critical mineral processes and capabilities. We look forward to providing more updates on future milestones as we achieve them in the weeks and months to come."
Webcast at 11:00 am ET on March 10, 2023 :
Energy Fuels will be hosting a video webcast on March 10, 2023 at 11:00 1m ET ( 9:00 am MT ) to discuss its FY-2022 financial results, the outlook for 2023, and its uranium, rare earths, vanadium, and medical isotopes initiatives. To join the webcast and access the presentation and viewer-controlled webcast slides, please click on the link below:
Webcast Link
By clicking this link and registering your name and phone number, the system will call you and place you directly into the call without talking to an operator. If you wish to call in on your own, 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 145847#. The recording will be available until March 24, 2023 .
Selected Summary Financial Information:
| | Year ended December 31, | | | | | | $000's, except per share data | 2022 | | 2021 | | 2020 | | Results of Operations: | | | | | | | Total revenues | $ 12,515 | | $ 3,184 | | $ 1,658 | | Operating loss | (44,939) | | (35,425) | | (24,627) | | Net income (loss) attributable to the company | (59,849) | | 1,541 | | (27,776) | | Basic and diluted net income (loss) per common share | (0.38) | | 0.01 | | (0.23) |
| $000's | As at December 31, 2022 | | As at December 31, 2021 | | | Financial Position: | | | | | | | Working capital | $ 116,966 | | $ 143,190 | | | Property, plant and equipment, net | 12,662 | | 21,983 | | | Mineral properties | 83,539 | | 83,539 | | | Total assets | 273,947 | | 315,446 | | | Total long-term liabilities | 10,914 | | 13,805 |
Financial Discussion:
At December 31, 2022, the Company had $116.97 million of working capital, including $74.27 million of cash and cash equivalents and marketable securities and $38.16 million of inventory, including approximately 1,027,000 pounds of uranium and 985,000 pounds of high-purity vanadium, both in the form of finished, immediately marketable product. The current spot price of U 3 O 8 , according to TradeTech, is $50.50 per pound, and the current mid-point spot price of V 2 O 5 , according to Fastmarkets, is $10.78 per pound. Based on those spot prices, the Company's uranium and vanadium inventories have a current market value of $51.86 million and $10.62 million , respectively, totaling $62.48 million
For the year ended December 31, 2022, we recognized a net loss of $59.85 million or $0.38 per share compared to net income of $1.54 million or $0.01 per share for the year ended December 31, 2021. The change between periods was primarily due to (i) a gain of $35.73 million recognized on the sale of a portfolio of the Company's non-core conventional uranium projects to Consolidated Uranium Inc. (" CUR ") in 2021 primarily in exchange for shares in CUR; (ii) a non-cash mark-to-market loss on investments accounted for at fair value of $16.90 million in 2022 due primarily to a decrease in the market price of our CUR shares over 2022 (iii) increased expenses in 2022 associated with preparing four (4) of our uranium mines for production or operational readiness amounting to $2.4 million ; (iv) development expenses in 2022 associated with developing commercial REE separation capabilities in addition to our existing mixed RE Carbonate commercial production capabilities; (v) expenses in 2022 associated with advancing our medical isotope initiatives; (vi) increased transaction expenses in 2022 arising from costs associated with acquiring the Bahia Project and costs associated with the sale of the Company's Alta Mesa project in Texas ; and (vii) increased other selling, general and administrative expenses in 2022 of $10.2 million associated with significant additions to executive and management/supervisory personnel (including non-cash share-based compensation of $2.5 million ), enhanced business processes, and other general and administrative expenses required to support all these increased levels of activity, partially offset by increased revenues in 2022.
Sale to the U.S. Uranium Reserve:
On December 16, 2022 , the Company announced it had been awarded a contract to sell 300,000 pounds of U 3 O 8 for $18.5 million ( $61.57 per pound of U 3 O 8 ) to the U.S. government for the establishment of the U.S. Uranium Reserve, resulting in an expected margin of approximately $35.85 per pound of uranium. The Uranium Reserve is intended to be a backup source of supply for domestic nuclear power plants in the event of a significant market disruption. The Company completed the transfer and received the proceeds in January 2023 .
Update on Rare Earth Initiatives and the Bahia Project:
Earlier this year, the Company began "Phase 1" REE separation, which includes modifications and enhancements to the existing SX circuits at the Mill. "Phase 1" is expected to have the capacity to process approximately 8,000 to 10,000 MT of monazite per year, producing roughly 4,000 to 5,000 MT TREO, containing roughly 800 to 1,000 MT of recoverable separated NdPr oxide per year. Because Energy Fuels is utilizing existing infrastructure at the Mill, "Phase 1" capital is expected to total only about $25 million. "Phase 1" is expected to be operational later this year or early 2024, subject to receipt of sufficient monazite supply and successful development and commissioning. If these milestones are achieved, Energy Fuels believes it will be the 'first to market' among U.S. companies with commercial quantities of separated NdPr available to EV, renewable energy, and other companies for offtake. Later, the Company expects to complete further enhancements to the Mill to expand NdPr production capability (" Phase 2 ") by 2026 and to produce separated Dy, Tb and potentially other REE materials in the future (" Phase 3 ") from monazite and potentially other REE-bearing process streams by 2027.
On February 13, 2023 , the Company announced it had completed the previously announced acquisition of the Bahia Project located between the towns of Prado and Caravelas in the State of Bahia, Brazil totaling 15,089.71 hectares (approximately 37,300 acres or 58.3 square miles). The Bahia Project is a well-known heavy mineral sand (" HMS ") deposit that has the potential to supply 3,000 – 10, 000 MT of natural monazite per year for decades to the Mill for processing into high-purity RE Carbonate, separated REE oxides and other REE products and materials. The Bahia Project is also expected to produce large quantities of high-quality titanium (ilmenite and rutile) and zirconium (zircon) minerals that are also in high demand. REE production is highly complementary to Energy Fuels' existing US-leading uranium business, as monazite and other major REE-bearing minerals naturally contain uranium that will be recovered and other impurities that will be removed at the Mill before further processing into advanced high-purity REE materials. 3,000 – 10,000 MT of monazite contains roughly 1,500 – 5, 000 MT of TREO, including 300 – 1,000 MT of NdPr and significant commercial quantities of Dy and Tb.