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Energy Fuels, a Leading Force in the Critical Minerals Market, Announces Q3-2023 Financial Results

Energy Fuels Inc. (NYSE American: UUUU | TSX: EFR), a prominent player in the uranium and rare earth industries, unveiled its financial results for the quarter ending September 30, 2023. With exponential growth and remarkable achievements, join me on their webcast at 4PM EST (today, 11-06-2023) to secure the full update.

Q3-2023 Financial Highlights

  • The quarter boasted a stellar balance sheet with $162.50 million in working capital, a marked improvement from the $116.97 million as of December 31, 2022. The company’s position is reinforced with zero debt and significant assets in cash, marketable securities, and inventory.
  • The net income for the quarter stood at $10.47 million or $0.07 per share. This includes the impressive sale of 180,000 pounds of uranium (U3O8) to a leading U.S. nuclear utility, garnering a gross profit margin of 50%.
  • While uranium remains a significant part of their portfolio, Energy Fuels is also actively diversifying. Efforts towards developing commercial rare earth separation capabilities are ongoing, and results thus far are promising.

Uranium: The Backbone of Energy Fuels

Uranium sales have seen a consistent upswing in 2023. Notably, the company sold 180,000 pounds of U3O8 at a commendable gross margin of 50% this quarter.

Furthermore, the proactive approach towards preparing four of their conventional uranium mines for production signifies Energy Fuels’ commitment to bolstering their uranium segment. The company aims to commence production in these mines by early 2024.

Rare Earths: The Road Ahead

Energy Fuels is making strides in the rare earth sector. Their ambitious “Phase 1” is set to be completed by early 2024, positioning them as a dominant producer of neodymium-praseodymium (NdPr) oxide outside China. This venture alone could cater to up to 1 million electric vehicles annually.

With “Phase 2” and “Phase 3” on the horizon, Energy Fuels is strategically positioning itself to meet the growing demand for rare earth elements, essential for various industries.

A Glance at Vanadium

Though the company did not sell any vanadium this quarter, their strategy seems to be geared towards leveraging market strength, as evident from their Q1-2023 sales.

CEO’s Perspective

Mark S. Chalmers, President and CEO of Energy Fuels, lauds the company’s progress. In his statement, he emphasized the company’s vision to establish a U.S. critical mineral hub. He highlighted the successful uranium sales and their vision for the rare earths supply chain.

Chalmers aptly said, “Energy Fuels’ business strategy and execution sits at an intersection of rapidly growing commodity markets, critical to the clean energy transition.”

Closing Thoughts and What’s Next

Today, we will be on the conference call scheduled for 4PM EST, eager to understand more about Energy Fuels’ future plans and the way forward.

With its strategic focus on both uranium and rare earths, Energy Fuels is well down the path to becoming the American Critical Mineral Powerhouse.

Author’s Note: To access the detailed Q3-2023 report, please visit the official SEC or SEDAR websites, or [Energy Fuels’ website].




GM bets big on MP Materials being the Holy Grail for an American rare earth magnet supply chain

What a difference a year makes as we review the reincarnation of the rare earths mining project in California, just across the Nevada border at the Mountain Pass mine – MP Materials Corp. (NYSE: MP), which began trading on the NYSE on November 18, 2020…announces a new rare earths magnet facility and binding long-term agreement with General Motors (GM).

Looking in the rear-view mirror for a moment, “Best Quarter Ever” would be their headline for their Q3-2021 just announced last month. By the numbers from Q3 alone, they should be proud – 98% uptime, steady and sustainable processing cost improvements, 46% margin – all things that point to a great quarter, especially with the increases in rare earths prices in the past 12 months. MP Materials saw a 127% increase in their realized rare earths oxide price compared to Q3-2020.

My phones are ringing, the experts are whispering a wide range of feedback to me as the ‘new and improved’ MP Materials still has many bridges to cross before the trust of those that rode the dusty trails on Mountain Pass previously will be rebuilt. Surely this is a good sign?

The GM deal with MP Materials is to “supply U.S.-sourced and manufactured rare earth materials, alloy and finished magnets for the electric motors in more than a dozen models using GM’s Ultium Platform, with a gradual production ramp that begins in 2023.”

The selection of Fort Worth, Texas as the location for the MP facility will be worthy of many debates but stands a distant second to the issues around securing the talent that can make this dream come true. These obvious challenges aside for a moment, management has delivered in clearly articulating where they are taking this REE program next. They told the market that the announcement of a Stage III facility would be made before the end of 2022 and here it is.

Kudos.

Mountain Pass is the only rare earths mining and processing site of commercial scale in the Western Hemisphere and currently produces approximately 15% of global rare earth content, according to them. The mine has been in production off and on since 1952 but was restarted in 2017. On going public, the MP Materials team highlighted their plan for Stage I (restore production and get the bugs out), Stage II (facilities to produce separated rare earths oxides) and Stage III (rare earths-based magnet production 2025-ish).

Sometimes you have to have a little luck to be good, toss in some deep pockets and MP Materials are reaching for quite a star, but I must confess their timeline is virtually inconceivable to everyone I know. Their original target for magnet production was 2025-ish and zealous. Now management is now saying 2023. In less than 24 months, MP Materials expects to permit and build a 200,000 square foot greenfield facility and commence commercial production of sintered permanent magnets. They also need equipment to do this – hopefully, it has already been ordered, because this is not a run-of-the-mill facility. Creating a sintered Neodymium-Iron-Boron (NdFeB) permanent magnet is not like building a washing machine, which GM must certainly be aware of. The development of permanent magnets originated in the US, but other than the equipment formerly-owned by Hitachi Metals now acquired by another nascent US rare earth producer, the US has virtually no capacity to produce sintered NdFeB permanent magnets today.

Again, on paper, this looks like an absolutely incredible strategy to re-establish a domestic source of rare earths permanent magnets in NA. Music to many our ears, if they prove they can make this happen. Having been in these trenches for too long, my experience is that the few that have the experience may be counted on one hand, and while MP Materials pockets are deep — it’s going take every bit of their cash to build the magnet facility and get it operational, especially with the Stage II plans for Mountain Pass still to be executed.

With the valuation on this stock being priced as if Stage III has been accomplished and at full production, MP Materials needs this to work, as does General Motors. It’s a big bet.