Pick of The Week
 

Energy Fuels Inc.
(NYSE American: UUUU)
(TSX: EFR)

Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR), based in Lakewood, Colorado, is the country’s largest producer of uranium and the leading conventional producer of vanadium, both designated by the U.S. government as critical minerals. Energy Fuels also began production of rare earths in 2021 at a stage more advanced than any other U.S. company.

As the leading U.S. diversified uranium miner, Energy Fuels’ uranium production portfolio stands apart in the world. Energy Fuels has more uranium production facilities, more production capacity, and more in-ground resources than any other company in the United States. In fact, the company’s assets have produced over one-third of all U.S. uranium over the past 15 years and is uniquely positioned to increase production to meet new demand.

Energy Fuels utilizes both conventional and in-situ recovery (“ISR”) technology to produce uranium from three strategic facilities:

• White Mesa Mill in Utah (conventional) has a licensed capacity of over 8 million pounds of U3O8 per year. The highly strategic White Mesa Mill is the only conventional uranium mill in the country and is proximate to some of the largest and highest-grade uranium mines and projects in the U.S., including the Company’s Canyon mine, La Sal Complex, Henry Mountains Complex and Roca Honda Project. White Mesa Mill provides Energy Fuels with significant production scalability as uranium demand increases. The White Mesa Mill also has other diverse businesses, including vanadium, rare earth elements (REE’s), alternate feed materials recycling and land cleanup, all described below.
• Nichols Ranch Plant (ISR) is located in the productive Powder River Basin district of Wyoming and has a total licensed capacity of 2 million pounds of U3O8 per year. Nichols Ranch has produced 1.2 million pounds of U3O8 since commissioning in 2014, and it has significant future expansion potential from 34 fully licensed wellfields containing significant in-ground uranium resources.
• Alta Mesa Plant (ISR) is located on over 200,000 acres of private land in Texas. The fully licensed and constructed ISR project has a total operating capacity of 1.5 million pounds of uranium per year and produced nearly 5 million pounds of U3O8 between 2005 and 2013. This low-cost production facility is currently on standby, maintained in a state of readiness to respond to expected increases in demand.

In addition to being the largest uranium miner in the U.S., Energy Fuels’ overall portfolio also includes a pipeline of high-quality, large-scale exploration and development projects that are permitted or are in advanced stages of permitting, as well as an industry-leading U.S. NI 43-101 Mineral Resource portfolio.

FACTOID: Energy Fuels has led industry efforts over the past two-plus years to get the U.S. government to recognize the importance of domestically produced uranium, including the 2018 – 2019 Uranium Section 232, the ongoing Nuclear Fuel Working Group and the recently announced creation of the U.S. strategic uranium reserve. The U.S. is by far the largest consumer of uranium in the world, yet we import almost all of our requirements; Energy Fuels aims to change that.

Nuclear Market Potential

Multiple studies in top scientific journals have shown that nuclear power is cleanest and most economical way to produce reliable electricity as worldwide demand continues to soar. Nuclear power is presently the only available and affordable low-carbon power source that can meet both current and future baseload electricity demands while simultaneously reducing air pollution and mitigating climate change. U.S. nuclear power plants currently generate nearly 20% of the nation’s electricity overall and 55% of its carbon‐free electricity and even a modest increase in electricity demand would require significant new nuclear capacity by 2025. According to the World Nuclear Association (WNA), there are currently 443 operable reactors, with another 57 units under construction and 426 in various stages of planning; in addition, the WNA has identified a potentially massive supply/demand gap through 2040 of 1 billion pounds. These factors among others are expected to significantly drive increased demand for uranium.

Reasons Nuclear is Gaining Traction

• Nuclear reactors emit no greenhouse gases during operation. Over their full lifetimes, they result in comparable emissions to renewable forms of energy such as wind and solar.
• Unlike any other form of energy, the waste from nuclear energy is contained and managed securely. Used fuel is currently being safely stored for ultimate disposal or future reprocessing, and 96% of this waste can potentially be recycled.
• Greater demand for clean electricity to power everything from homes to automobiles, reducing dependence on fossil fuels.

No. 1 U.S. Producer of Vanadium in 2019

Energy Fuels also produces vanadium as a byproduct of uranium production. Vanadium is designated a critical mineral, essential to the economic and national security of the United States. Energy Fuels was the largest producer of vanadium in the U.S. in 2019, and has significant high-grade, in-ground vanadium resources, as well as a separate high-purity vanadium production circuit at their White Mesa Mill, which is also the only conventional vanadium mill in the country. Crucial for use in the steel, aerospace, and chemical industries, vanadium plays a critical role in the production of high-strength and light-weight metallic alloys and demand is expected to increase across the globe. Energy Fuels has several fully permitted and developed standby mines containing large quantities of high-grade vanadium, along with uranium, including:

• La Sal Complex (Utah)
• Whirlwind Mine (Colorado/Utah)

Vanadium has also gained increased attention as a catalyst in next-generation high-capacity, “community-scale” batteries used for energy storage generated from renewable sources. Demand is only expected to grow as this market expands. With recent upgrades in its vanadium production operations, in 2019 Energy Fuels produced 1.8 million pounds of the highest purity (99.7%) vanadium in the mill’s history and can rapidly adjust production to meet volatile market conditions. Energy Fuels is one of the very few known avenues that provides investors access the vanadium market.

Rare Earth Element (REE) Production, Alternate Feed Material Recycling, and Land Cleanup

The White Mesa Mill also provides the company with diverse cashflow generating opportunities. Security of supply for Rare Earth Elements (REEs) supporting U.S. military and defense requirements is a major issue today. In 2021, the White Mesa Mill began processing a mineral called monazite, which is widely recognized as one of the most valuable REE-bearing minerals in the world due to excellent distributions of the magnetic REEs needed for electric vehicles (EVs), wind generation and a host of other clean energy and advanced technologies. Monazite also contains uranium and thorium, which processors need special licenses and capabilities to recover and manage.

Monazite is produced as a byproduct of titanium and zircon mines in the U.S. and around the world. Energy Fuels’ White Mesa Mill is recovering the uranium from monazite and selling it for the production of clean, carbon-free nuclear energy. The mill is evaluating recovering the contained thorium for emerging ‘targeted alpha therapy’ cancer treatments, as well as producing a REE product called mixed rare earth carbonate which is ready for the next step in rare earth refining: separation. At the current time, no other U.S. company is producing a rare earth product ready for separation. Energy Fuels is also in the early stages of installing rare earth separation capabilities at the White Mesa Mill, with the potential to unlock significant revenue generating opportunities.

The White Mesa Mill is also the only facility in North America licensed and capable of recycling alternate feed materials (AFMs). AFMs are essentially low-level waste materials that contain recoverable quantities of natural (or unenriched) uranium. The Company typically generates between $5 and $15 million per year from AFM recycling. Finally, Energy Fuels is seeking to become involved in the cleanup of legacy Cold War era uranium mines in the Four Corners region of the U.S., including on the Navajo Nation. The U.S. Environmental Protection Agency (EPA) has access to over $1.5 billion for the cleanup of just a fraction of the sites on the Navajo Nation. The White Mesa Mill is fully licensed to receive much of this material, we are one of the government’s lowest cost options, and we have the ability to recycle the material and produce usable uranium from it.

San Juan County Clean Energy Foundation

On September 16, 2021, Energy Fuels announced the establishment of the San Juan County Clean Energy Foundation, a fund specifically designed to contribute to the communities surrounding Energy Fuels’ White Mesa Mill in Southeastern, Utah. In tandem with the announcement, Energy Fuels deposited $1 million into the foundation and detailed plans to provide ongoing annual funding equal to 1% of White Mesa Mill’s future revenues, providing funding to support the local economy and local priorities. The foundation will focus on supporting education, the environment, health/wellness, Tribal initiatives and economic advancement in the City of Blanding, San Juan County, the White Mesa Ute Community, the Navajo Nation and other area communities.

“The communities that surround our facility deserve to share in the benefits of the Mill’s clean energy future,” Mark Chalmers, CEO of Energy Fuels, stated in the news release. “The very heart of our business – uranium and rare-earth production and recycling – helps us play a big part in addressing global climate change, reducing air pollution, and making the world a cleaner and healthier place. We see San Juan County as becoming a critical minerals hub for the U.S., and we believe the Foundation is truly the best way to make an impact and difference in the lives of those who work alongside us as we pursue these goals.”

RECENT COVERAGE
 

Washington Will Struggle to Fully Wean the US Off Russian Nuclear Fuel

October 10, 2022 12:45 PM

Several developed nations have passed a host of sanctions against Russia in a global bid to stop its misguided war in Ukraine. Months after Russia declared war on Ukraine and breached its borders, dozens of countries placed sanctions on Russian exports, limited the movement of Russian money and cut the country off from critical exports.

However, despite efforts by the United States to distance itself from Russian exports, it seems Washington will have a hard time weaning itself off of Russian nuclear fuel. Since Russia is one of the top energy producers in the world, several countries rely on it as a source of energy. Europe, for instance, has been gripped by a historic energy crunch for the past few months after Russia cut natural gas exports to the rest of the EU.

Despite efforts by the U.S. government, Russia’s top position in global energy will make it hard for the nation to completely cut itself from the federation. Russia controls around two-fifths of enrichment services worldwide and supplies nearly 25% of the fuel used in 93 operational American nuclear reactors. Weaning itself off energy supplies from Russia will be a challenge as the country is deeply ensconced in the supply chain.