Energy Fuels (UUUU) - USA's No1 Uranium Producer Chasing REE Crown

April 23 2021, 06:35 GMT+01:00

Energy Fuels

  • Shares Outstanding: 141.9M
  • Share price USD$5.02 (20.04.2021)
  • Market Cap: USD$793M

Energy Fuels is the leading US producer of Uranium, the fuel for carbon and emission free nuclear energy. Nuclear energy is expected to see strong growth in the coming years, as nations around the world work to provide plentiful and affordable energy, while combating climate change and air pollution. Energy Fuels is also a major US producer of vanadium and an emerging player in the commercial rare earth business where its work is helping to establish a fully integrated US supply chain.

We caught up with Mark Chalmers, President & CEO of Energy Fuels for an update on the business and the Uranium and Rare Earths market.

Milestone Reached: $1B Mkt Cap

Energy Fuels has recently reached a milestone market cap of CAD$1Bn which doesn’t come as a surprise. This increase in market valuation tracks valuations of Uranium peers in the space so there is potential for additional increase once the rare earths business has increased recognition in the marketplace and creates other growth opportunities for investors.

Company Overview 

With a unique portfolio, Energy Fuels has more production capacity, licensed mines and processing facilities, and in-ground Uranium resources than any other US producer. Energy Fuels has diverse cash flow generating opportunities, including Vanadium production, Uranium recycling and rare earth processing. The addition of the rare earths business is really exciting for the company as they become a diversified, green energy company that can reduce carbon emissions and increase electrification of the world.Energy Fuels (UUUU) - USA's No1 Uranium Producer Chasing REE Crown

Raising Money to Buy U308 at Spot Price: Opinions & Impact

Energy Fuels already has Uranium & Vanadium and has produced it at their facility so they’re not planning to buy any additional Uranium product. Buying Uranium is a lot easier than producing Uranium which you can’t mine for such low prices so it makes sense for some companies to have some trading stock and some upside to the market. Uranium has intrinsic value so it makes sense to buy stock from an investment perspective. 

USA & Biden's Administration: Any Developments on the Nuclear Front?

The US government is making some positive moves and statements on nuclear energy and now making final decisions how the Department of Energy will roll out the Uranium reserve.  Energy Fuels did a lot of work with Section 232, which took several years and they hope that they will receive some governmental support in recognition but for the moment the company is concentrating on managing their own business.Energy Fuels (UUUU) - USA's No1 Uranium Producer Chasing REE Crown

Reset & Recovery of Price: Expect Lower?

Uranium prices are now up around USD$31/lb due to recent buying. Energy Fuels need Uranium prices to increase substantially to put their Uranium projects back into production to produce Uranium cost effectively. The Uranium price has got to get up to USD$50/lb plus range to really start to get interesting from a producer perspective to really look at putting projects back into play.

Potential for Rare Earths: Timeline, Process, & Economics

The rare earths business is moving forward as the company has their first Monazite contract signed. Energy Fuels are now processing Monazite and aims to increase the scale of production for economies of scale and believe that the rare earths business has potential for higher margins than Uranium for the company in the long-term.

It is early days for the rare earths business as Energy Fuels is currently making the carbonate and shipping to Estonia for separation. They plan to become fully integrated in the rare earths space and within a couple of years, the separation will also take place at White Mesa Mill as Energy Fuels becomes as independent as possible to become cost competitive with China.

Energy Fuels is replicating the Chinese rare earths model. They are currently shipping the rare earth carbonate to Estonia as there is no separation in the United States. But in 2-3 years time, they will be looking at separation at White Mesa and they are looking forward to being able to communicate that to the market. Energy Fuels is in a strong position with more than USD$80M in cash or working capital and they are debt free.Energy Fuels (UUUU) - USA's No1 Uranium Producer Chasing REE Crown

Option for Producing Thorium: What's the Market for it? 

The Chinese are recovering Thorium due to the interest in Thorium reactors and are looking for other sources of Thorium. A lot of the Thorium that people have access to is old Thorium which has had some radioactive decay. It could be something worth looking into for Energy Fuels in the near future.

Expectations & Predictions for 2021

Energy Fuels is as busy as they've ever been. The Uranium business is their core business and they have a long history there. Uranium equities are starting to move and it is a busy time for the company in Uranium and rare earths as the emphasis on clean energy, carbon free energy and electrification continues. 

To find out more, go to Energy Fuels' Website. 

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