Friday, May 20, 2022
Energy Fuels (UUUU)
UUUU locks up Rare Earth Element Supplies
Energy Fuels is a leading U.S.-based uranium mining company, supplying U3O8 to major nuclear utilities. Energy Fuels also produces vanadium from certain of its projects, as market conditions warrant, and is ramping up commercial-scale production of REE carbonate. Its corporate offices are in Lakewood, Colorado, near Denver, and all its assets and employees are in the United States. Energy Fuels holds three of America’s key uranium production centers: the White Mesa Mill in Utah, the Nichols Ranch in-situ recovery (“ISR”) Project in Wyoming, and the Alta Mesa ISR Project in Texas. The White Mesa Mill is the only conventional uranium mill operating in the U.S. today, has a licensed capacity of over 8 million pounds of U3O8 per year, has the ability to produce vanadium when market conditions warrant, as well as REE carbonate from various uranium-bearing ores. The Nichols Ranch ISR Project is on standby and has a licensed capacity of 2 million pounds of U3O8 per year. The Alta Mesa ISR Project is also on standby and has a licensed capacity of 1.5 million pounds of U3O8 per year. In addition to the above production facilities, Energy Fuels also has one of the largest NI 43-101 compliant uranium resource portfolios in the U.S. and several uranium and uranium/vanadium mining projects on standby and in various stages of permitting and development. The primary trading market for Energy Fuels’ common shares is the NYSE American under the trading symbol “UUUU,” and the Company’s common shares are also listed on the Toronto Stock Exchange under the trading symbol “EFR.” Energy Fuels’ website is www.energyfuels.com.
Michael Heim, CFA, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Energy Fuels signed purchase agreements to acquire mineral concessions in Bahia, Brazil believed to include monazite sand, which contains both rare earth elements (REE) and uranium. The project has yet to be mined, but over 3,300 holes have been drilled indicating the presence of monazite. The monazite is close to the surface and should be a low-cost source of supply. The monazite will be shipped to UUUU’s milling operations in the United States where it is developing and expanding REE extraction and separation operations. Management indicated that building a Brazil milling plant is possible, although we do not view that as a near-term project. Energy Fuels will pay $27.5 million for the concessions, an amount easily funded with its $106 million of cash and marketable securities.
Management believes the project could supply 3,000-10,000 per year of monazite containing 1,500-5,000 of total rare earth oxides (TREO). The company had previously stated a goal of eventually producing 10,000 tons of REE annually, implying processing 20,000-25,000 tons of monazite. To date, production ramp up has been hampered by an inability to secure sufficient monazite sand. If management is correct about the potential of the Brazil project, it could represent 25-50% of supply at full production (which we model to be in 2026). As such, the agreement represents a significant step in locking up supply. We expect the company to continue to look to sign additional supply agreements….
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.