Energy Fuels moves to resume vanadium production
Positive results from Q2, the decision to pay off debt, and to resume vanadium production at their White Mesa Mill will see Energy Fuels revenues continue to grow.
Uranium is a heavy metal that has been used as an abundant source of concentrated energy for over 60 years. Nuclear power stations and fossil-fueled power stations have many features in common. Both require heat to produce steam to drive turbines and generators. Discovered in 1789 by a German chemist, uranium is named after the planet Uranus.
Energy Fuels Inc. (NYSE American: UUUU | TSX: EFR) is a leading integrated US based uranium mining company. Their 100% owned White Mesa Mill in Utah is the only fully-licensed and operating conventional uranium mill in the United States, having a 21% share of all US produced uranium (2011-2015). The mill has an annual capacity of 8 million lbs of uranium, and in 2017 produced 366,000 lbs of uranium concentrate, and re-processed a further 946,000 lbs.
Q2, 2018 results – boosted by long term uranium contracts
On 3 August, Energy Fuels announced their Q2 2018 results. Total revenue was $26.9 million, primarily due to the advancement of future deliveries under long-term uranium contracts. From these revenue results the Company reported a net income of $7.1 million for the quarter. These results include 500,000 pounds of U3O8 deliveries completed for the three months ended June 30, at an average price of $53.55 per pound. On April 1, 2018, the Company also 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. In addition, on June 15 2018, the Company delivered 100,000 lbs of U3O8 into a spot priced contract at $22.57 per pound. The Company has also been 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, we have significantly improved our working capital position to over $55 million.”
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Energy Fuels intend to use a portion of its working capital to repay debt, including the entire outstanding principal balance of its Wyoming Industrial Development Revenue Bond, which is secured by the Company’s Nichols Ranch Project. Repayment of this loan will reduce the Company’s short and long term debt and avoid significant future interest. Added to this Energy Fuels has been acquiring several royalties, including the recently announced acquisition of royalties in Wyoming.
Energy Fuels to resume vanadium production in Q4, 2018
Energy Fuels had previously announced (May 8, 2018), that the Company also plans to resume vanadium production in Q4 2018, and expects to recover up to four million pounds of currently dissolved vanadium from pond solutions at White Mesa Mill. The Mill has a long history of conventional vanadium recovery, most recently producing 1.5 million pounds of vanadium in 2013. During its operating history, the mill has produced over 45 million pounds of vanadium.
Mark S. Chalmers also stated: “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 $20 per pound, we have decided to resume vanadium production in 2018 by recovering solubilised vanadium from the White Mesa Mill’s tailings and evaporation ponds.”
Positive results from Q2, the decision to pay off debt, and to resume vanadium production at their White Mesa Mill will see Energy Fuels revenues continue to grow. Energy Fuels is in a unique position by having the only fully-licensed and operational conventional uranium mill in the United States, and also soon becoming the only company producing vanadium in the US. A very good stock for those that are positive on the outlook for uranium and vanadium.
Energy Fuels Inc. is a mining development and production company; which engages in the exploration, evaluation, and permitting of uranium and vanadium properties. Its projects include Nichols Ranch, Alta Mesa, and the very strategic White Mesa Mill. Energy Fuels Inc. has a market cap of C$ 347 m.
Matthew Bohlsen is a Senior Editor for InvestorIntel.com. With a Graduate Diploma in Applied Finance and Investment (similar to CFA), and a Graduate Diploma in ... <Read more about Matthew Bohlsen>