Energy Fuels casts its eyes on uranium and vanadium as it continues to bolster its projects

• Energy Fuels is the only conventional uranium producer in the US
• Also only primary vanadium producer in the US
• In light of higher spot prices, has ability to easily adjust vanadium production in response to changing market conditions

What the company does:

Headquartered in Colorado, Energy Fuels (TSE:EFR) (NYSEMKT:UUUU) is a fully-integrated producer of both uranium and vanadium, and owner of the only operational conventional uranium mine in the US.

The firm owns and operates a mill and conventional mines that can produce up to 8 million pounds of uranium per year. The company utilizes both conventional and in-situ recovery technology and produce uranium from a number of strategic facilities – the White Mesa Mill in Utah and the Nichols Ranch Plant in Wyoming. The firm also has a licensed, permitted, and constructed ISR uranium facility on standby at its Alta Mesa facility in Texas.

The company is also looking beyond uranium as a potential producer of vanadium, a co-product along with uranium at some of its mines. The firm has high-grade vanadium resources, along with a separate, high-purity vanadium production circuit at the White Mesa Mill.

It has a strong cash and working capital position of around US$47 million and limited debt, at US$16 million. 

How is it doing:

Energy Fuels has had a very active year, as it moved forward a host of projects. While it continues to build its uranium position in the US, it is also focusing on its vanadium initiatives, in the light of higher spot prices. 

At its White Mesa mill in Utah, the company has been producing its highest-purity V2O5 (vanadium pentoxide) to date, averaging around 99.6% due to updates at the facility last year. Energy Fuels is currently selling this vanadium (as ferrovanadium) into the steel industry, and it continues to pursue opportunities to sell portions into speciality chemical and aerospace markets, potentially at a premium.

“Our campaign to recover vanadium from pond solutions at the White Mesa Mill is going very well,” said Mark S. Chalmers, president and CEO of Energy Fuels.

“Product purities are higher than expected, production costs are lower than expected, and vanadium prices remain at high levels. We also have the ability to adjust our vanadium production very easily in response to changing market conditions. This production readiness and flexibility is a key attribute when dealing with minor metals like vanadium. It allows us to be able to produce or conserve our vanadium, as we see fit, in response to market volatility.”

READ: Energy Fuels shares advance as it lauds vanadium production from Utah mill

The firm also recently released an update on a new land cleanup contract at a formerly operating uranium mine in New Mexico.

In June, Energy Fuels signed an agreement with the owner of the former mine, who is currently completing reclamation activities onsite. As part of the agreement, the owner will deliver material to Energy Fuels’ White Mesa Mill to process and recover uranium and dispose of the remaining tailings.

The contract comes with anticipated revenue of between US$700,000 and $3.5 million. Energy Fuels also retains the title to recovered uranium or other minerals, which is currently estimated to be around 10,000 to 70,000 pounds of uranium valued at between US$250,000 to $1.75 million at current prices. The firm noted delivery of the material began in late June.

WATCH: Energy Fuels commends President Trump’s decision to review domestic uranium-supply solution

One of the most notable moves by the company in the last year was its petition to the US government to initiate a Section 232 investigation into the effects of uranium imports on US national security. The Section 232 probe was prompted by a petition filed by Energy Fuels and Ur-Energy Inc (TSE:URE) (NYSEAMERICAN:URG).

President Donald Trump said in a written memo that he agreed with a US Department of Commerce investigation that found uranium imports could hurt US national security. However, although he declined to impose tariffs on the radioactive metal, the President did say the findings “raise significant concerns,” and in light of this, was ordering a deeper review.

Energy Fuels said it commended President Donald Trump’s decision to commence a new review of the domestic nuclear fuel supply chain and looked forward to participating in finding a solution.

What the boss says:

“We believe we are perfectly placed as a company, having the only conventional uranium mill that also processes vanadium, does recycling and potential clean-up work,” said Energy Fuels CEO Mark Chalmers.

“We think that it is a national security piece of infrastructure and that doesn’t exclude the fact that we have other projects that are fully permitted and either currently producing or on standby.” 

Contact Katie Lewis at [email protected]

Story by ProactiveInvestors