LAKEWOOD, CO, March 16, 2017 /PRNewswire/ -
Energy Fuels Inc. (NYSE MKT: UUUU; TSX: EFR) ("Energy Fuels" or
the "Company"), a leading producer of uranium in the United States, is pleased to present the
following Letter to Shareholders from President and CEO,
Stephen P. Antony:
Dear Fellow Shareholders:
READY TO GO FURTHER. We believe this phrase
captures Energy Fuels' positioning in the global uranium sector
today. As a shareholder, you already know that Energy Fuels
is a proven U.S. uranium producer. But, we believe we are
ready to take the next step. Our three production
facilities are ready to increase production, as uranium
markets improve. Our permitted and developed mines are
ready to resume operations. We are ready to
compete in global markets and sell more uranium at higher
prices. In short, we are ready to be the "go-to"
uranium producer in the U.S., as I believe our people, assets, and
expertise are second-to-none in the U.S. In other words, we
are READY TO GO FURTHER.
I don't have to tell you that the past several years have been
extraordinarily challenging in uranium markets. But in
December 2016, we just might have
turned the corner. 2016 was one of the most challenging years
I can remember during my nearly 40-year career, as prices fell by
almost 50% amid weak and discretionary utility demand and
persistent oversupply. But then in December, things began to
look a little different. After hitting a multi-year low of
$17.75 per pound on December 1, the spot price started showing some
signs of life. Market participants began to recognize that
current and future uranium supplies may not be as plentiful as they
thought. Demand continues to rise, especially in the
long-term where there is significant uncovered utility
demand. We are starting to see some tangible production cuts,
as weak prices persist and high-priced, long-term contracts
expire. And I believe we will see even more production cuts
while prices stay low. Indeed, Kazakhstan recently announced 10% production
cuts. This is on top of the production cuts announced by
Cameco in 2016. I would contend that when the World's largest
and lowest-cost uranium producers are feeling the pain of today's
prices, you know this current market pricing is categorically
unsustainable.
We know the World is going to need a lot of uranium in the
coming decades. We also know that the World will need more
uranium mines. But, due to very limited investment in our
industry, current levels of exploration and new project development
are simply not sufficient. Bringing a large, new uranium
project from exploration into production takes at least 10
years. In addition, history tells us that many of these new
projects will fail to meet expectations – or fail altogether.
When this pent-up demand comes to the market, I do not believe the
mining industry will be able to respond adequately. All of
these factors may finally be converging to create the foundation
for the next significant uranium price recovery.
Against this backdrop, the nuclear industry is emerging as a key
future source of clean, reliable energy because of its many
benefits, including air pollution reduction, carbon emission
reduction, sustainability, grid stability, safety and energy
resiliency. Nations, particularly in Asia, are turning to nuclear energy to provide
clean, affordable electricity to their growing populations and
modernizing economies. With citizens – particularly younger
generations – demanding cleaner energy solutions like never before,
utilizing nuclear power to lower our reliance on fossil fuels makes
a lot of sense. And thanks to advances in technology, nuclear
power is proving to be a very viable option to complement the rapid
growth in renewables such as solar and wind power – an integrated
opportunity which can stabilize the electric grid of tomorrow – a
thesis expert witnesses from the Electric Power Research Institute
recently endorsed on Capitol Hill.
If the U.S. is truly focused on energy independence, as appears
to be the case with the new Trump Administration, uranium projects
in the U.S. should be considered premium, strategic assets,
especially since the Energy Information Administration (EIA) has
reported that U.S. uranium production is near historic lows, as we
increasingly rely heavily on foreign uranium.
Amid the uranium supply risks I described above, the U.S.
remains a global leader in nuclear energy. We have the
largest nuclear fleet in the World, and our plants consume huge
quantities of uranium. In addition to the four units under
construction in Georgia and
South Carolina, lawmakers around
the country are finally beginning to take action to support our
current nuclear fleet. Consider this, the Illinois
Legislature passed the Future Energy Jobs Bill in late-2016 that
saved three nuclear reactors owned by Exelon. And, lawmakers
in Connecticut, Ohio, and Kentucky are considering legislation to
support nuclear energy. We would like to see similar action
at the federal level. In addition, I'm gratified that NuScale
Power recently submitted the very first formal small modular
reactor (SMR) design application to the U.S. Nuclear Regulatory
Commission (NRC). Finally, here at Energy Fuels, we are
looking forward to working with the new Trump Administration on a
number of other initiatives to support the domestic nuclear and
uranium sectors.
At Energy Fuels, we believe these positive catalysts could
energize the uranium market. While I can't say whether the
recent upward price move in uranium is the beginning of the "next
uranium bull market", I confidently believe there is considerable
upside for proven producers of uranium with scalability and
high-quality assets like Energy Fuels.
Though the historic drop in uranium prices in 2016 brought
challenges for Energy Fuels, we achieved several important
milestones that we believe enhance our ability to respond to rising
uranium prices:
- In June 2016, we acquired the
Alta Mesa Project located in Texas. This highly-coveted, low-cost ISR
project is fully-permitted, fully-developed, and ready to resume
production once uranium prices rise a little more. We also
published a maiden resource estimate for Alta Mesa, showing significant in-ground uranium
resources and exciting exploration potential on the nearly
200,000-acres of private land to which we now have access.
- We are nearly finished developing our Canyon uranium mine in
Arizona, which will soon be ready
to go into production once prices rise a little more. This is truly
an exceptional high-grade, low-cost uranium deposit. We have also
discovered very high-grade copper mineralization, and if we are
able to profitably produce it, our costs will drop even
further.
- ·Through financings, extension of our convertible debentures,
cost-cutting measures, non-core asset divestitures, and
re-establishing our "at-the-market" program, we are maintaining the
strength of our balance sheet, so – again – we will be ready for
when prices support us increasing production.
When significant uranium demand returns to the market, Energy
Fuels will not be able to supply all of it, even if we were to
produce at our capacity. However, we will be happy to supply
as much as we can – and at prices that recognize the strategic
value of our commodity. Today, we are a leading U.S. uranium
producer. But, our assets, permits, and production
capabilities make us ready to take the next step toward becoming a
mid-tier global producer. In short, Energy Fuels is READY
TO GO FURTHER.
I'll close by noting that several members of Energy Fuels'
Management Team and Board of Directors – including me – have
recently purchased more shares of Energy Fuels on the open
market. We believe in this Company, we believe in a uranium
price recovery, and we thank you for your continued support and
investment interest in Energy Fuels.
Respectfully,
Stephen P. Antony
President, CEO and Shareholder in Energy Fuels
About Energy Fuels: Energy Fuels is a
leading integrated US-based uranium mining company, supplying
U3O8 to major nuclear utilities. Energy
Fuels holds three of America's key uranium production centers, the
White Mesa Mill in Utah, the
Nichols Ranch Processing Facility in Wyoming, and the Alta Mesa Project in
Texas. The White Mesa Mill is the only conventional uranium
mill operating in the U.S. today and has a licensed capacity of
over 8 million pounds of U3O8 per year.
The Nichols Ranch Processing Facility is an ISR production center
with a licensed capacity of 2 million pounds of
U3O8 per year. Alta Mesa is an ISR production center currently
on care and maintenance. Energy Fuels also has the largest NI
43-101 compliant uranium resource portfolio in the U.S. among
producers, and uranium mining projects located in a number of
Western U.S. states, including one producing ISR project, mines on
standby, and mineral properties in various stages of permitting and
development. The Company also produces vanadium as a
co-product of its uranium production from certain of its mines on
the Colorado Plateau, as market conditions warrant. The
Company's common shares are listed on the NYSE MKT under the
trading symbol "UUUU", and on the Toronto Stock Exchange under the
trading symbol "EFR".
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 in the U.S.; the
Company's expectations with regard to global uranium markets,
including the statement that markets may have turned a corner;
production cuts, global uranium supplies, and the effects of
expiring contracts; the unsustainability of today's uranium
markets; the Company's expectations on the sufficiency of
exploration and new project development and the inability of the
uranium mining industry to adequately respond to higher prices and
market demand; the benefits of nuclear energy and technology
development in the nuclear sector; the Company's opinions on the
readiness of its assets and production, and the ability to commence
or increase production with improved uranium prices; energy
independence and the impacts of the Trump Administration on uranium
markets; the Company's opinion that its assets and production
capabilities present upside; the effects of the Company achieving
several important milestones; recent insider buying of the
Company's common shares; 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 in the U.S.; the
Company's expectations with regard to global uranium markets,
including the statement that markets may have turned a corner;
production cuts, global uranium supplies, and the effects of
expiring contracts; the unsustainability of today's uranium
markets; the Company's expectations on the sufficiency of
exploration and new project development and the inability of the
uranium mining industry to adequately respond to higher prices and
market demand; the benefits of nuclear energy and technology
development in the nuclear sector; the Company's opinions on the
readiness of its assets and production, and the ability to commence
or increase production with improved uranium prices; energy
independence and the impacts of the Trump Administration on uranium
markets; the Company's opinion that its assets and production
capabilities present upside; the effects of the Company achieving
several important milestones; recent insider buying of the
Company's common shares; 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.
Cautionary Note to United States Investors Concerning
Estimates of Measured, Indicated and Inferred
Resources: This news release contains
certain disclosure that has been prepared in accordance with the
requirements of Canadian securities laws, which differ from the
requirements of U.S. securities laws. Unless otherwise
indicated, all reserve and resource estimates included in this news
release have been prepared in accordance with Canadian National
Instrument 43-101 – Standards of Disclosure for Mineral Projects
("NI 43-101") and the Canadian Institute of Mining, Metallurgy and
Petroleum ("CIM") classification system. Canadian standards,
including NI 43-101, differ significantly from the requirements of
U.S. securities laws, and reserve and resource information
contained in this news release may not be comparable to similar
information disclosed by companies reporting only under U.S.
standards. In particular, the term "resource" does not equate
to the term "reserve" under SEC Industry Guide 7.
United States investors are
cautioned not to assume that all or any of Measured or Indicated
Mineral Resources will ever be converted into mineral
reserves. Investors are cautioned not to assume that all or
any part of an "Inferred Mineral Resource" exists or is
economically or legally minable. Energy Fuels does not hold
any Reserves as that term is defined by SEC Industry Guide 7.
Please refer to the section entitled "Cautionary Note to United
States Investors Concerning Disclosure of Mineral Resources" in the
Company's Annual Report on Form 10-K dated March 9, 2017 for further details.
SOURCE Energy Fuels Inc.