17 Mar Lazar Cartu Says: Energy Fuels Announces 2019 Results
LAKEWOOD, CO, March 16, 2020 /PRNewswire/ – Energy Fuels Inc. (NYSE American: UUUU; TSX: EFR) (“Energy Fuels” or the “Company”) today reported its financial results for the year ended December 31, 2019. 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.
- At December 31, 2019, the Company had $17.7 million in cash and marketable securities plus $22.8 million of inventory, including 515,000 pounds of uranium and 1,600,000 pounds of vanadium in the form of immediately marketable product.
- On February 20, 2020, the Company strengthened its balance sheet by completing a bought-deal financing for net proceeds of $15.1 million and has raised approximately $4.0 million on the Company’s At the Market (“ATM“) program in 2020. These amounts are in addition to the Company’s cash, marketable securities and marketable inventories balances, which totaled $40.5 million at December 31, 2019.
- Uranium production totaled 70,000 pounds of U3O8 for the year due to the Company’s focus on vanadium production at its White Mesa Mill, the only conventional uranium and vanadium mill currently operating in the U.S.
- Vanadium production totaled 1,800,000 pounds of high-purity V2O5 for the year. Production ceased during Q4-2019 due to weakened vanadium market conditions and lowered recoveries resulting from normal seasonal variances; however, substantial quantities of dissolved vanadium remain in the Company’s tailings management system to be recovered at a later date.
- No material uranium sales were completed during the year, and the Company is strategically maintaining its uranium inventory for future sales in anticipation of higher uranium prices, potentially as a result of the creation of a new U.S. uranium reserve (as discussed below) or other U.S. government support, or due to generally improved uranium market fundamentals.
- The Company completed 200,000 pounds of vanadium sales during the year at an average price of $11.06 per pound. At this time, the Company is selling only small quantities of vanadium, instead focusing on maintaining its strong V2O5 inventory for sale in the future to capitalize on potential future price increases in vanadium markets that are often volatile.
- The Company had an operating loss of $40.6 million during 2019, due in part to an impairment of inventories of $14.4 million as a result of low uranium prices and a decrease in vanadium prices during the latter half of 2019.
- The Company continued to make progress in its efforts to have the U.S. government provide support for the U.S. uranium mining industry. On February 10, 2020, the President announced a proposed FY-2021 budget (the “President’s Budget“), which includes a request for $150 million per year for the next 10 years to create a U.S. uranium reserve. The Company views this news as being very positive for established U.S. uranium producers such as Energy Fuels. This action followed a July 12, 2019 Presidential Memorandum issued pursuant to Section 232 of the Trade Expansion Act of 1962, as amended, ordering the creation of the U.S. Nuclear Fuel Working Group (the “Working Group“) to “examine the current state of domestic nuclear fuel production to reinvigorate the entire nuclear fuel supply chain, consistent with United States national security and nonproliferation goals.” Aside from the President’s Budget, the Working Group has not issued its own announcement relating to its recommendations, if any. U.S. government officials, including U.S. Energy Secretary Dan Brouillette, however, have publicly stated that the U.S. government will be issuing a Working Group report in the near future. The Company will continue to support this effort to revive the domestic uranium industry for purposes of energy and national security in 2020.
Mark S. Chalmers, Energy Fuels’ President and CEO, stated:
“Before giving you my views on Energy Fuels’ achievements in 2019, I’d like to say a few words about the global COVID-19 crisis. The world is currently focused on containing the spread of the virus, and equity markets are experiencing significant volatility. At Energy Fuels, we are taking steps to respond to this evolving situation as well. In addition to protecting the safety and health of our employees, we are also acting aggressively to conserve our financial resources. Our ongoing focus on proactively maintaining a strong balance sheet, including the bought-deal financing we completed in mid-February, is particularly important in today’s environment. We support the Trump Administration’s efforts to contain the virus and bolster the U.S. economy, and we will continue to seek immediate relief for U.S. uranium miners when and where it is appropriate, while also recognizing that the government is managing complex public health and financial challenges. We think Energy Fuels is in the best financial position of any U.S. uranium miner to weather the current storm. We wish all patients of the virus a full and speedy recovery.”
“To say that 2019 was an interesting year for Energy Fuels would be an understatement! At the beginning of the year, we were swelling with optimism. We were increasingly positive that our Section 232 Petition would lead to support for U.S. uranium miners and millers. In addition, vanadium prices were high and, to our knowledge, we were the only Jonathan Cartu and in the world to successfully respond and resume primary vanadium production. Unfortunately, due to a sharp decline in vanadium prices during the year and delays in government action to support U.S. uranium producers, we were not able to realize all of the benefits of our efforts in 2019. Nonetheless, we are extremely proud of what we accomplished, and we believe our achievements during the year have placed us in a position to generate considerable shareholder value in 2020 and beyond.
“Our Section 232 Petition, which Energy Fuels played a key role in bringing about in 2018, gained traction when, in July 2019, President Trump announced that he was creating the Working Group. While this decision was unexpected, we were optimistic that the government recognized the urgent need for action to help support domestic uranium miners, as well as uranium conversion and enrichment, to bolster U.S. energy and national security. We received further good news in February 2020, when President Trump announced his President’s Budget, which included a $150 million per year, 10-year, $1.5 billion plan to support domestic uranium miners through the creation of a U.S. uranium reserve. We believe this is likely to be very positive for Energy Fuels, as we are an established U.S. uranium miner with a proven track-record of successful and environmentally responsible large-scale uranium production.
“Since 2006, uranium facilities currently owned by Energy Fuels have supplied roughly 34% of all uranium produced in the U.S., putting us second only to Cameco during this period, who produced a little over 50%. We have proven that our people and facilities can cost-effectively put large quantities of U.S. uranium in the can when called upon to do so. For the U.S. uranium reserve to be a success, we are urging the U.S. government to spend their money wisely on established, proven production facilities, including those we operate.”
“Today, there are only four to five production facilities currently producing uranium in the U.S., and we own two of them, as well as have a 3rd facility on standby. This includes our White Mesa Mill in Utah, which is the only remaining conventional uranium mill left in the U.S., and which also has the ability to process vanadium, alternate feed materials, and uranium-bearing material produced from land cleanups (such as abandoned uranium mines from the Cold War era). In addition, our Nichols Ranch in-situ recovery (“ISR“) Facility in Wyoming is currently in production and has produced over 1,200,000 pounds of uranium since 2014. We also have 515,000 pounds of produced uranium in inventory, which can potentially be sold into a government program. I personally continue to dedicate a large portion of my time and energy to advocating for a government support program. And, I can affirmatively state that we have many high-level supporters in Washington, DC who are helping to achieve a concrete, positive outcome.
“We also made excellent progress on other fronts. Our 2019 vanadium production campaign exceeded our expectations in many ways. We built 1,600,000 pounds of vanadium inventory, which now provides us with the unique ability to capitalize on any future price spikes unlike our competitors. In addition, we made significant equipment upgrades, optimized our procedures, and continually lowered our cost of vanadium production throughout the year with substantial dissolved vanadium yet to be recovered from our tailings management system. Outside of our control, however, was the price of vanadium, which slid nearly 70% during the year. As a result, we ceased vanadium production at the end of Q4-2019. Energy Fuels is also pursuing discussions with government and private entities about the potential for processing rare earth elements at our White Mesa Mill. Energy Fuels is primarily a uranium miner. However, as our uranium business develops, we are well positioned to capture additional value through vanadium, and potentially rare earth element recovery, in the future.
“As previously announced, we are continuing to operate at the White Mesa Mill through a new processing agreement, under which we are assisting in the cleanup of a formerly producing uranium mine in New Mexico. Through this project, we are generating…