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Energy Fuels ends 1Q with US$60M of working capital as it gears up for big rare earths element commercial push

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Energy Fuels Inc (NYSEAMERICAN:UUUU) (TSE:EFR) has revealed that ended its first quarter with US$60.4 million of working capital as it gears up to expand its rare earths capabilities this year.

The integrated resource company is making strides toward building a critical US rare earth supply chain with the development of a rare earth element (REE) carbonate production program at its White Mesa Mill, which was ramped up during the first quarter of 2021.

Outside of its rare earths initiatives, Energy Fuels reported that it holds around $28 million worth of inventory, including 690,800 pound of uranium and 1,672,000 pounds of vanadium – both “immediately marketable,” according to a statement.

READ: Energy Fuels engages top consultant to support development of rare earth separation at White Mesa Mill in Utah

During the quarter ended March 31, 2021, the company reported revenue of $353,000 and a net loss of $10.91 million, compared to a net loss of $5.66 million for the first quarter of 2020, which Energy Fuels attributed primarily to an increase in its share price that resulted in a non-cash mark-to-market increase in warrant liabilities of $3.50 million. Development expenditures also rose by $2.69 million compared to 1Q 2020 due to its rare earths program ramp up.

Highlights from the quarter included the launch of a US-European REE production initiative with Neo Performance Materials that sees the parties planning to produce value-added REE products from natural monazite sands, a byproduct of heavy mineral sands mined in the southeastern United States. Energy Fuels will ship a portion of its REE Carbonate production to Neo’s REE separations facility in Estonia. Neo will then process the REE Carbonate into separated REE materials for use in REE permanent magnets and other REE-based advanced materials.

‘Exciting times’

Energy Fuels CEO Mark Chalmers told investors that no other US company is producing a product “this far down the rare earth value chain.”

“(We) are transforming our company into ‘America’s Critical Mineral Hub’, with the main focus being on the White Mesa Mill in Utah,” Chalmers said in the results statement.

“While nearly all current and future nuclear reactors are fueled by uranium, other clean energy and advanced technologies, including electric vehicles renewable energy and batteries, require other critical minerals that Energy Fuels produces. A robust market for responsibly produced, American clean energy products and technologies, made by American workers, is possible in the US … Energy Fuels’ White Mesa Mill in Utah can help this vision become a reality. To say these are exciting times for our company would be the understatement of my lifetime.”

Noble rates Market Perform

In a note following the 1Q results, analysts at Noble Capital said that while processing REE carbonate could generate “tens of millions” in cash flow, separating REE elements could be even more profitable.

“We estimate that REE carbonate might sell for $50,000 per tonne with cost of goods representing 75% of revenues depending on the quality of the Monazite. Such an estimate would imply $30 million generated by Energy Fuels for producing 2,000-3,000 tonnes of REE carbonate as per guidance. That number would grow to $75 million if the company meets targets to eventually process 15,000 tonnes of Monazite (6,000 tonnes of REE carbonate).”

Noble has a ‘Market Perform’ rating on the stock, which is currently trading 5% higher at US$5.51 in New York and up 3.9% at C$6.66 in Toronto as of Friday morning.

Contact Angela at [email protected]

Follow her on Twitter @AHarmantas

Story by ProactiveInvestors


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