LAKEWOOD, CO, May 5, 2017 /CNW/ - Energy Fuels Inc. (NYSE
MKT:UUUU; TSX:EFR) ("Energy Fuels" or the "Company"), today
reported its financial results for the quarter ended March 31, 2017. The Company's quarterly report on
Form 10-Q 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 US dollars.
Financial Highlights:
- At March 31, 2017, the Company
had $23.8 million of working capital,
including cash and cash equivalents of $12.2
million and approximately 550,000 pounds of uranium
concentrate inventory.
- 60,000 pounds of U3O8 sales were
completed by the Company at an average realized price of
$58.28 per pound, pursuant to a
long-term contract.
- Uranium production totaled 92,000 pounds of
U3O8 during the quarter.
- Q1 had lower sales volume due to the timing of contract sales.
On April 1, 2017, the Company
delivered 200,000 lbs. into long-term sales contracts and over
$13 million was collected.
- $3.8 million of total revenue was
realized by the Company. The Company began fulfilling a toll
processing contract which is expected to result in $6.50 million of revenue for 2017, of which
$0.26 million was realized by the
Company during Q1-2017.
Stephen P. Antony, Energy
Fuels' President and CEO stated: "Energy Fuels continues to
enjoy meaningful insulation from price weakness in the uranium spot
market. Our contract sales and other sources of revenue enable the
Company to maintain a strong working capital position and overall
balance sheet. In addition, Energy Fuels is likely to become the
largest uranium producer in the U.S. in 2017, based on published
company guidance. We are proud to take the position as the largest
uranium producer in the U.S., especially during a time when our
industry demands high degrees of efficiency."
Key Developments:
On March 22, 2017, the Company
completed all licensing and permitting for the Jane Dough property,
which is a part of the Nichols Ranch ISR Project. The Company now
has all licenses and permits required to commence production at the
Jane Dough property, including approvals from the U.S.
Environmental Protection Agency ("EPA"), the U.S. Nuclear
Regulatory Commission ("NRC"), and the State of Wyoming. The Company is currently
producing uranium from Nichols Ranch, which contains 13 wellfields,
of which nine are currently in production and four are expected to
be developed in the future based on market conditions. The Jane
Dough property is expected to accommodate 22 wellfields, which are
expected to be developed after all 13 wellfields at the Nichols
Ranch property are in production.
The Company substantially completed shaft-sinking and
underground drilling operations at its Canyon Mine in March 2017. We continue to receive the results
from the underground drilling campaign, and samples assayed to date
indicate the presence of high-grade uranium and copper
mineralization. The Company expects to release an updated resource
estimate for the Canyon Project later in 2017.
On March 31, 2017, the Company
announced that Mark Chalmers had
been appointed as the Company's President and Chief Operating
Officer effective July 1, 2017, with
Stephen Antony continuing as Chief
Executive Officer. In addition, two members of the Company's Board
of Directors, Mr. Glenn Catchpole
and Mr. Ron Hochstein, will not
stand for re-election.
Mr. Antony continued: "Our operations continued to perform
to high standards. We brought a new cost-efficient, in-situ
recovery (ISR) wellfield online at Nichols Ranch in March, and
head-grade and production volumes are rising. We also prudently
finished other key permitting and development activities during
Q1-2017. We completed permitting for the Jane Dough wellfields at
the Nichols Ranch Project. As a result, we now have 26 permitted
wellfields and significant ISR resources in front of us at Nichols
Ranch that we can place into production in the future. We now have
a valuable permitted asset in hand, and that cash requirement has
stopped. We also now have substantially finished the production
shaft and underground drilling at the Canyon Mine during Q1-2017,
where we have encountered large areas of high-grade uranium and
copper mineralization. We believe we have significantly increased
the size of the uranium resource at the Canyon Mine. This should
translate into low overall costs per pound, in-line with the lowest
cost conventional uranium mines operating in the world today.
Monetizing the copper will further reduce our uranium
cost-per-pound. Completion of these milestones has resulted in a
reduction in the workforce and a significant reduction in cash
outlays at the Canyon Mine during the evaluation time period.
Nichols Ranch and the Canyon Mine, along with the fully-permitted
Alta Mesa Project now on standby, are ideally positioned to quickly
increase the Company's low-cost uranium production in improving
markets."
Selected Summary Financial Information:
|
|
|
$000, except per
share data
|
Three months
ended
March 31, 2017
|
Three months
ended
March 31, 2016
|
Results of
Operations:
|
|
|
|
Total
revenues
|
$
3,756
|
$
17,996
|
|
Gross
profit
|
1,685
|
5,853
|
|
Net loss attributable
to the company
|
(10,508)
|
(8,808)
|
|
Basic and diluted
loss per share
|
(0.15)
|
(0.19)
|
|
|
|
$000's
|
As at March 31,
2017
|
As at December
31,
2016
|
Financial
Position:
|
|
|
|
Working
capital
|
$
23,821
|
$
24,023
|
|
Property, plant and
equipment
|
36,126
|
37,582
|
|
Mineral
properties
|
92,380
|
92,625
|
|
Total
assets
|
196,455
|
196,457
|
|
Total long-term
liabilities
|
48,940
|
46,487
|
Operations and Sales Outlook:
The Company plans to extract and/or recover uranium from the
following sources in 2017 (each of which is more fully described
below):
|
1)
|
Nichols Ranch ISR
Project; and
|
|
2)
|
Alternate feed
materials and pond returns at the Mill
|
Our planned operations are expected to produce finished uranium
in excess of our existing requirements under our sales
contracts.
Extraction and Recovery Activities - Overview
The Company expects to produce 675,000 pounds in the year ending
December 31, 2017 of which 92,000
pounds U3O8 were produced in the first three
months of the year. We had previously forecasted total production
for the year ending December 31, 2017
of 800,000 pounds of U3O8. The lower
production amount is due to expected lower initial recoveries of
pond returns of 25,000 pounds of U3O8, a
delay in receipt of certain alternate feed materials of 50,000
pounds of U3O8, which are now expected to be
received in 2018, and lower than expected recoveries at our Nichols
Ranch Project.
Extraction and Recovery - ISR Uranium Segment
We expect to extract and recover approximately 300,000 pounds of
U3O8 from our Nichols Ranch Project for the
year ending December 31, 2017, of
which 58,000 pounds were recovered in the first three months of the
year.
At March 31, 2017, the Nichols
Ranch wellfields had nine header houses extracting uranium. The
ninth header house began extracting uranium in March 2017. Until such time that improvement in
uranium market conditions is observed or suitable sales contracts
can be entered into, the Company intends to defer development of
further header houses at its Nichols Ranch project.
Extraction and Recovery – Milling Operations
The Company expects to recover approximately 375,000 pounds of
U3O8 during the year ending December 31, 2017 at the Mill, including
approximately 275,000 pounds of U3O8 from
dissolved uranium not recovered from previous processing in the
mill tailings management system ("Pond Return") and approximately
100,000 pounds of U3O8 from alternate feed
sources. In the first three months of the year the White Mesa Mill
recovered 34,000 pounds of these amounts.
In addition, during 2017, the Company expects to earn a fee for
processing approximately 1.0 million pounds of
U3O8 contained in alternate feed materials at
the Mill, returning all finished uranium product to the generator
of the feed material. During the three months ended March 31, 2017, the Company began the recovery
process and completed processing of 39,000 pounds of this
material.
Shaft sinking and evaluation of the Canyon Project
The Company completed shaft sinking and underground evaluation
drilling activities in March 2017 at
the Canyon Project.
The Company is actively processing and reviewing the drilling
results in order to define the mineralization, develop mine plans
and evaluate the Mill's ability to recover a salable copper product
from the significant copper mineralization the Company has
identified. Through evaluation activities completed to date, the
Company has identified zones of high-grade uranium and copper
mineralization within the deposit. The Company is evaluating the
potential for recovering copper at its White Mesa Mill as a
value-added byproduct along with the recovery of uranium. The
Company plans to issue an updated NI 43-101 compliant resource
estimate in the second half of 2017.
The timing of the Company's plans to mine and process
mineralized materials from the Canyon Project will be based on the
results of this additional evaluation work, along with market
conditions and available financing.
Other operational activities
Permitting of the Jane Dough Property, which is adjacent to
Nichols Ranch, was completed in March
2017.
In January 2017, the Company
obtained the necessary permits to mine the open pit and underground
resources of its Sheep Mountain Project in Wyoming.
The Company is continuing to pursue cost cutting initiatives,
including the potential sale or abandonment of certain non-core
properties and the sale of excess mining equipment and other
assets.
Sales of U3O8 and other revenue update and
outlook
In 2017, the Company expects to complete deliveries of 520,000
pounds of U3O8 under four contracts,
including 320,000 pounds under three long-term contracts and
200,000 pounds under a contract where the price is based on the
average spot price per pound of uranium for the five weeks prior to
the dates of delivery. Of these deliveries, 120,000 pounds
represent the final deliveries under one of these contracts. The
Company is currently monitoring market conditions for additional
sales opportunities. Selective additional spot sales may be made as
necessary to generate cash for operations and development
activities.
During the three months ended March 31,
2017, 60,000 pounds of the above amounts were delivered to a
customer under one of the long-term contracts.
During the year ending December 31,
2017, the Company expects to earn approximately $6.50 million in toll revenue for processing
certain alternate feed materials for a third party of which
$0.26 million was earned in the first
three months of 2017. The Company also continues to pursue new
sources of revenue, including additional alternate feed materials,
toll processing of alternate feed materials and other sources of
feed for the Mill. A significant focus will be placed on
participating in the clean-up of abandoned uranium mines, either on
the Navajo Nation or in the Four
Corners region.
Stephen P. Antony, P.E., President & CEO of Energy
Fuels, is a Qualified Person as defined by Canadian
National Instrument 43-101 and has reviewed and approved the
technical disclosure contained in this news release.
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".
ADDITIONAL NON-US GAAP FINANCIAL PERFORMANCE MEASURES
The Company has included the additional non-US GAAP measure
"Gross Profit" in the financial statements and in this news
release. Management notes that "Gross Profit" provides useful
information to investors as an indication of the Company's
principal business activities before consideration of how those
activities are financed, sustaining capital expenditures, corporate
and exploration and evaluation expenses, finance income and costs,
and taxation.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
This news release contains certain "Forward Looking
Information" and "Forward Looking Statements" within the meaning of
applicable Canadian and United
States securities legislation, which may include, but is not
limited to, statements with respect to: production, revenue and
sales forecasts; the Company's expectations as to the evaluation
and preparation of a revised NI 43-101 Report for the Canyon
Project; expectations that drill results at the Canyon Project
could result in an expansion of the previously estimated mineral
resource and/or identification of a significant copper resource;
whether all or a portion of any copper resource at the Canyon
Project can be recovered at the White Mesa Mill or elsewhere;
expectations relating to mining costs at the Canyon Project and the
performance of wellfields at the Nichols Ranch Project;
scalability, and the Company's ability and readiness to re-start or
expand any of its existing projects to respond to any improvements
in uranium market conditions; the expectation that the Company will
earn a reasonable margin on any of its alternate feed material or
other processing activities; the ability of the Company to secure
any new sources of alternate feed materials or other processing
opportunities at the White Mesa Mill; the ability of the Company to
manage its activities and assets conservatively under current
market conditions while maintaining its uranium resource base and
recovery capabilities; the ability of the Company to enjoy some
insulation from spot market weakness; the ability of the Company to
enter into suitable sales contracts in the future; expected
timelines for the permitting and development of projects; mineral
resource estimates; the Company's expectations as to longer term
fundamentals in the market and price projections; the Company's
expectations as to expenditures and cost reductions; and
expectations to become or maintain its position as a leading
uranium company in the United
States. Generally, these forward-looking statements can be
identified by the use of forward-looking terminology such as
"plans", "expects" "does not expect", "is expected", "is likely",
"budget" "scheduled", "estimates", "forecasts", "intends",
"anticipates", "does not anticipate", or "believes", or variations
of such words and phrases, or state that certain actions, events or
results "may", "could", "would", "might" or "will be taken",
"occur", "be achieved" or "have the potential to". All statements,
other than statements of historical fact, herein are considered to
be forward-looking statements. Forward-looking statements involve
known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the
Company to be materially different from any future results,
performance or achievements express or implied by the
forward-looking statements. Factors that could cause actual results
to differ materially from those anticipated in these
forward-looking statements include risks associated with:
production, revenue and sales forecasts; the Company's expectations
as to the evaluation and preparation of a revised NI 43-101 Report
for the Canyon Project; expectations that drill results at the
Canyon Project could result in an expansion of the previously
estimated mineral resource and/or identification of a significant
copper resource; whether all or a portion of any copper resource at
the Canyon Project can be recovered at the White Mesa Mill or
elsewhere; expectations relating to mining costs at the Canyon
Project and the performance of wellfields at the Nichols Ranch
Project; scalability, and the Company's ability and readiness to
re-start or expand any of its existing projects to respond to any
improvements in uranium market conditions; the expectation that the
Company will earn a reasonable margin on any of its alternate feed
material or other processing activities; the ability of the Company
to secure any new sources of alternate feed materials or other
processing opportunities at the White Mesa Mill; the ability of the
Company to manage its activities and assets conservatively under
current market conditions while maintaining its uranium resource
base and recovery capabilities; the ability of the Company to enjoy
some insulation from spot market weakness; the ability of the
Company to enter into suitable sales contracts in the future;
expected timelines for the permitting and development of projects;
mineral resource estimates; the Company's expectations as to longer
term fundamentals in the market and price projections; the
Company's expectations as to expenditures and cost reductions; and
expectations to become or maintain its position as a leading
uranium company in the United
States; and the other factors described under the caption
"Risk Factors" in the Company's Annual Report on Form 10-K dated
March 9, 2017, which is available for
review on EDGAR at www.sec.gov/edgar.shtml, on SEDAR at
www.sedar.com, and on the Company's website at
www.energyfuels.com. Forward-looking statements contained herein
are made as of the date of this news release, and the Company
disclaims, other than as required by law, any obligation to update
any forward-looking statements whether as a result of new
information, results, future events, circumstances, or if
management's estimates or opinions should change, or otherwise.
There can be no assurance that forward-looking statements will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements.
Accordingly, the reader is cautioned not to place undue reliance on
forward-looking statements. The Company assumes no obligation to
update the information in this communication, except as otherwise
required by law.
SOURCE Energy Fuels Inc.