Alvopetro Energy Ltd.’s vision is to become a leading independent upstream and midstream operator in Brazil. Our strategy is to unlock the on-shore natural gas potential in the state of Bahia in Brazil, building off the development of our Caburé natural gas field and our strategic midstream infrastructure.
Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Production growth combined with price increases is leading to rising revenues. 2023-1Q production rose to 2,767 boepd (up 11% annually and 2% sequentially). Monthly production had been reported, so results were in line with expectations. Realized gas prices were $12.06/mcf (up 20% annually and 8% sequentially). A biannual price adjustment in February resulted in higher rates. This was also disclosed previously, so pricing was in line with our expectations. Energy sales revenues were $18.2 million slightly below our $18.8 million estimate due to lower-than-expected oil and NGL sales.
Top line growth is flowing through to the bottom line. The company reported record Funds Flow From Operations of $15.0 million versus $10.9 million for the same period last year and above our $11.4 million estimate. Net income was $12.8 million ($0.33 per diluted share) versus $15.1 million ($0.30) also above our $9.1 million ($0.24) estimate.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
What is Hydrogen, and Can it Really Become a Climate Change Solution?
As the United States and other countries react to achieve a goal of zero-carbon electricity generation by 2035, energy providers are swiftly ramping up renewable resources such as solar and wind. But because these technologies churn out electrons only when the sun shines and the wind blows, a backup from more reliable energy sources would prevent blackouts and brownouts. Currently, plants burning fossil fuels, primarily natural gas, fill in the gaps. Can we stop using fossil fuels now? – Paul Hoffman, Managing Editor, Channelchek
Hydrogen, or H₂, is getting a lot of attention lately as governments in the U.S., Canada and Europe push to cut their greenhouse gas emissions.
But what exactly is H₂, and is it really a clean power source?
I specialize in researching and developing H₂ production techniques. Here are some key facts about this versatile chemical that could play a much larger role in our lives in the future.
This article was republished with permission from The Conversation, a news site dedicated to sharing ideas from academic experts. It represents the research-based findings and thoughts of Hannes van der Watt, Research Assistant Professor, University of North Dakota.
So, What is Hydrogen?
Hydrogen is the most abundant element in the universe, but because it’s so reactive, it isn’t found on its own in nature. Instead, it is typically bound to other atoms and molecules in water, natural gas, coal and even biological matter like plants and human bodies.
Hydrogen can be isolated, however. And on its own, the H₂ molecule packs a heavy punch as a highly effective energy carrier.
It is already used in industry to manufacture ammonia, methanol and steel and in refining crude oil. As a fuel, it can store energy and reduce emissions from vehicles, including buses and cargo ships.
Hydrogen can also be used to generate electricity with lower greenhouse gas emissions than coal or natural gas power plants. That potential is getting more attention as the U.S. government proposes new rules that would require existing power plants to cut their carbon dioxide emissions.
Because it can be stored, H₂ could help overcome intermittency issues associated with renewable power sources like wind and solar. It can also be blended with natural gas in existing power plants to reduce the plant’s emissions.
Using hydrogen in power plants can reduce carbon dioxide emissions when either blended or alone in specialized turbines, or in fuel cells, which consume H₂ and oxygen, or O₂, to produce electricity, heat and water. But it’s typically not entirely CO₂-free. That’s in part because isolating H₂ from water or natural gas takes a lot of energy.
How is Hydrogen Produced?
There are a few common ways to produce H₂:
Electrolysis can isolate hydrogen by splitting water – H₂O – into H₂ and O₂ using an electric current.
Methane reforming uses steam to split methane, or CH₄, into H₂ and CO₂. Oxygen and steam or CO₂ can also be used for this splitting process.
Gasification transforms hydrocarbon-based materials – including biomass, coal or even municipal waste – into synthesis gas, an H₂-rich gas that can be used as a fuel either on its own or as a precursor for producing chemicals and liquid fuels.
Each has benefits and drawbacks.
Green, Blue, Gray – What Do the Colors Mean?
Hydrogen is often described by colors to indicate how clean, or CO₂-free, it is. The cleanest is green hydrogen.
Green H₂ is produced using electrolysis powered by renewable energy sources, such as wind, solar or hydropower. While green hydrogen is completely CO₂-free, it is costly, at around US$4-$9 per kilogram ($2-$4 per pound) because of the high energy required to split water.
The largest share of hydrogen today is made from natural gas, meaning methane, which is a potent greenhouse gas. IRENA (2020), Green Hydrogen: A guide to policymaking
Other less energy-intensive techniques can produce H₂ at a lower cost, but they still emit greenhouse gases.
Gray H₂ is the most common type of hydrogen. It is made from natural gas through methane reforming. This process releases carbon dioxide into the atmosphere and costs around $1-$2.50 per kilogram (50 cents-$1 per pound).
If gray hydrogen’s CO₂ emissions are captured and locked away so they aren’t released into the atmosphere, it can become blue hydrogen. The costs are higher, at around $1.50-$3 per kilogram (70 cents-$1.50 per pound) to produce, and greenhouse gas emissions can still escape when the natural gas is produced and transported.
Another alternative is turquoise hydrogen, produced using both renewable and nonrenewable resources. Renewable resources provide clean energy to convert methane – CH₄ – into H₂ and solid carbon, rather than that carbon dioxide that must be captured and stored. This type of pyrolysis technology is still new, and is estimated to cost between $1.60 and $2.80 per kilogram (70 cents-$1.30 per pound).
Can We Switch Off the Lights on Fossil Fuels Now?
Over 95% of the H₂ produced in the U.S. today is gray hydrogen made with natural gas, which still emits greenhouse gases.
Whether H₂ can ramp up as a natural gas alternative for the power industry and other uses, such as for transportation, heating and industrial processes, will depend on the availability of low-cost renewable energy for electrolysis to generate green H₂.
It will also depend on the development and expansion of pipelines and other infrastructure to efficiently store, transport and dispense H₂.
Without the infrastructure, H₂ use won’t grow quickly. It’s a modern-day version of “Which came first, the chicken or the egg?” Continued use of fossil fuels for H₂ production could spur investment in H₂ infrastructure, but using fossil fuels releases greenhouse gases.
What Does the Future Hold for Hydrogen?
Although green and blue hydrogen projects are emerging, they are small so far.
Policies like Europe’s greenhouse gas emissions limits and the 2022 U.S. Inflation Reduction Act, which offers tax credits up to $3 per kilogram ($1.36 per pound) of H₂, could help make cleaner hydrogen more competitive.
Hydrogen demand is projected to increase up to two to four times its current level by 2050. For that to be green H₂ would require significant amounts of renewable energy at the same time that new solar, wind and other renewable energy power plants are being built to provide electricity directly to the power sector.
While green hydrogen is a promising trend, it is not the only solution to meeting the world’s energy needs and carbon-free energy goals. A combination of renewable energy sources and clean H₂, including blue, green or turquoise, will likely be necessary to meet the world’s energy needs in a sustainable way.
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, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Energy Fuels reported 2023-1Q results in line with expectations absent non-recurring items. UUUU reported revenues of $19.6 million (versus our $18 million est.) largely due to the previously-announced sale of uranium to the government. Net income was $114.7 million ($0.72 per share) with a $116.5 million net gain on the sale of the Alta Mesa project. Absent the gain, the company would have reported a slight loss, in line with our projections.
UUUU’s rare earth elements (REE) plan is becoming clearer. Phase 1 of a plan to separate rare earth elements such as the valuable NdPr. has begun. When completed in 2023/24, UUUU will be able to produce 800-1,000 metric tons (0.8-1.0 million kg) of “commercial quantities of separated NdPr.” At the current spot price of $64 per kg, sales could approach $64 million. Sales of other separated REE would be incremental. And, production is expected to grow 2-3 times upon completion of Phase 2 in 2026 leading us to believe annual sales from REE could be several hundred million. For a company that has not generated annual revenues above $30 million the last ten years, the prospect of generating hundreds of million in sales is exciting.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
The Company sold 300,000 pounds of uranium at a gross margin of 58%, 79,344 pounds of vanadium at a gross margin of 37%, and the Alta Mesa property for a total gain of $116.45 million; Working capital increased, total assets increased, and total liabilities decreased.
LAKEWOOD, Colo., May 5, 2023 /CNW/ – Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) (“Energy Fuels” or the “Company”) today reported its financial results for the quarter ended March 31, 2023. The Company’s Quarterly Report on Form 10-Q has been filed with the U.S. Securities and Exchange Commission (“SEC“) and may be viewed on the Electronic Document Gathering and Retrieval System (“EDGAR“) at www.sec.gov/edgar.shtml, on the System for Electronic Document Analysis and Retrieval (“SEDAR“) at www.sedar.com, and on the Company’s website at www.energyfuels.com. Unless noted otherwise, all dollar amounts are in U.S. dollars.
Financial Highlights:
As of March 31, 2023, the Company had a robust balance sheet with $143.61 million of working capital (versus $116.97 million at December 31, 2022), including $43.83 million of cash and cash equivalents, $60.44 million of marketable securities, $38.00 million of inventory, and no debt. At current commodity prices, the Company’s product inventory has a value of $52.53 million;
During the three months ended March 31, 2023, the Company realized net income of $114.26 million, or $0.72 per share, primarily due to: (i) a net gain of $116.45 million on the sale of the Company’s Alta Mesa in situ recovery (“ISR“) project in Texas; (ii) a net gain of $10.76 million on the sale of 300,000 pounds of uranium (“U3O8“) to the U.S. Uranium program; (iii) a net gain of $0.32 million on the sale of 79,344 pounds of vanadium (“V2O5“); (iv) increased expenses associated with preparing four (4) of our uranium mines for production; (v) expenses associated with developing commercial rare earth element (“REE“) separation capabilities; and (vi) a non-cash mark-to-market loss on investments accounted for at fair value of $2.96 million.
The Company realized a total gross margin of 57% on its product sales during Q1-2023, including 58% on its uranium sale and 37% on its vanadium sales.
At March 31, 2023, the Company’s total assets and current assets increased by 37% and 10%, respectively, and total liabilities and current liabilities decreased by 44% and 72%, respectively, as compared to December 31, 2022.
As of March 31, 2023, the Company held 847,000 pounds of finished U3O8, 906,000 pounds of finished V2O5, and 250 metric tons (“MT“) of finished high-purity, partially separated mixed REE carbonate (“RE Carbonate“) in inventory.
The Company holds an additional 394,000 lbs. of U3O8 as raw materials and work-in-progress inventory, along with 1 – 3 million pounds of solubilized V2O5 in tailings solutions that could be recovered in the future.
Uranium Highlights:
During Q1-2023, the Company completed the sale of 300,000 pounds of U3O8 to the U.S. Uranium Reserve realizing total gross proceeds of $18.47 million, or $61.57 per pound of U3O8. This sale resulted in a gross margin of approximately $35.85 per pound of uranium, or a gross margin of 58%.
During 2023, the Company expects to sell an additional 200,000 to 260,000 pounds of U3O8 into its current portfolio of supply agreements with U.S. nuclear utilities at an expected sales price of approximately $54 – $58 per pound, resulting in an estimated 46% – 50% gross margin.
During Q1-2023, the Company purchased a total of 120,000 pounds of U.S.-origin U3O8 on the spot market for a weighted-average price of $50.25 per pound.
Over the past several months, the Company has made significant progress in preparing four (4) of our conventional uranium and uranium/vanadium mines to be ready to resume ore production, including significant workforce expansion and performing needed rehabilitation and development of surface and underground infrastructure.
On February 15, 2023, the Company announced it had completed its previously announced sale of its Alta Mesa ISR Project to enCore Energy Corp. (“enCore“) for total consideration of $120 million, comprised of $60 million in cash and $60 million in a secured convertible note bearing interest at a rate of eight percent (8%) per annum, convertible into common shares of enCore at a price of $2.9103 per share. This sale of a lower priority project provides Energy Fuels with significant additional cash and working capital, enabling the Company to ramp-up its US industry-leading uranium and REE production, while avoiding dilution to shareholders.
In connection with the Alta Mesa Transaction, on May 3, 2023, the Company completed the sale of its Prompt Fission Neutron assets, including the underlying contracts, technology, licenses and intellectual property (collectively, the “PFN Assets“), to enCore in exchange for cash consideration received at closing of $3.10 million. At closing, the PFN Assets, which the Company had purchased in 2020 for cash consideration of $0.5 million, had a net book value of $0.35 million. The PFN Assets were used exclusively at the Alta Mesa ISR Project and are not required for any of the Company’s other properties. Should the Company have the need for the use of a PFN tool in the future, the Company retained a 20-year usage right, subject to the availability of the PFN Assets, to purchase, lease and/or license at least one PFN tool and all related and/or required equipment, technology and licenses on commercially reasonable terms.
As of April 28, the spot price of U3O8 was $53.75 per pound according to data from TradeTech.
Rare Earth Element Highlights:
During the three months ended March 31, 2023, the Company produced approximately 250 MT of high-purity, partially separated mixed RE Carbonate from monazite, containing approximately 115 MT of total rare earth oxides (“TREO“), which is the most advanced REE material being produced commercially in the U.S. today.
The Company has in circuit an additional 65 to 115 MT of RE Carbonate, containing 35 to 55 MT of TREO, which it expects to package for sale during the second quarter of 2023.
In early 2023, the Company began modifying and enhancing its existing solvent extraction (“SX“) circuits at the Mill to be able to produce separated REE oxides (“Phase 1“). The Company has begun this development work in its SX building and ordered most of the major components for this project, which are expected to be delivered to the Mill in Q3-2023. “Phase 1” is expected to be completed and fully commissioned by late 2023 or early 2024 and have the capacity to produce roughly 800 to 1,000 MT of recoverable separated neodymium-praseodymium (“NdPr“) oxide per year, subject to securing sufficient monazite feed. “Phase 1” is expected to position Energy Fuels as one of the world’s leading producers of NdPr outside of China. “Phase 1” capital costs are expected to total approximately $25 million. 1,000 MT of NdPr in permanent magnets could power up to 1 million electric vehicles (“EVs“) per year.
The Company is engineering further enhancements at the Mill to increase NdPr production capacity to up to approximately 3,000 MT per year by 2026 (“Phase 2“), and to produce separated dysprosium (“Dy“), terbium (“Tb“) and potentially other advanced REE materials in the future from monazite and potentially other REE process streams by 2027 (“Phase 3”).
On February 13, 2023, the Company announced it had completed its previously announced acquisition of a large heavy mineral sands project in Brazil (the “Bahia Project“), which has the potential to supply the Company’s growing REE business with 3,000 – 10,000 MT of REE-bearing natural monazite sand per year for decades. The Bahia Project also contains significant quantities of high-value titanium (ilmenite and rutile) and zirconium (zircon) minerals.
During Q1-2023, the Company completed 2,266 meters of sonic drilling at the Bahia Project to confirm and further delineate the rare earth, titanium, and zirconium mineralization. The Company expects to commence further sonic drilling in Q3-2023, announce drilling results later this year, and commence preparation of an SK-1300 and NI 43-101 compliant mineral resource estimate.
The Company continues active discussions with several additional suppliers of natural monazite around the world to significantly increase the supply of feed for our growing REE initiative.
As of April 28, the spot price of NdPr oxide was $64 per kg, according to data from Asian Metal.
Vanadium Highlights:
During Q1-2023, the Company sold approximately 79,344 pounds of existing V2O5 inventory, for an average weighted sales price of $10.98 per pound of V2O5, for a total gross margin of 37%.
Due to the high-purity of the Company’s vanadium product, these sales occurred at a premium to V2O5 spot prices prevailing at the time of the sales.
As of April 28, the spot price of V2O5 was $9.75 per pound, according to data from Fastmarkets.
Medical Isotope Highlights:
The Company continued advancing its program to evaluate the potential to recover radioisotopes from its process streams for use in emerging targeted alpha therapy (“TAT“) cancer therapeutics.
Mark S. Chalmers, Energy Fuels’ President and CEO, stated:
“Energy Fuels had an exceptional 1st quarter on several metrics, including earnings of $114.26 million, achieving healthy margins on our product sales, increasing our working capital position to $143.61 million, increasing our total assets, and reducing our total liabilities. We also significantly enhanced our fixed asset portfolio by selling the non-core Alta Mesa uranium property for $120.00 million and closing on the purchase of the Bahia Project in Brazil, which has the potential to feed our REE separation circuits with low-cost raw materials for several decades.
“On uranium, we sold 300,000 pounds of U3O8 to the newly established U.S. Uranium Reserve for $18.47 million, or $61.57 per pound, representing a significant premium to the current spot price of uranium, resulting in a $10.76 million gross margin. We are also getting ready to sell up to another 260,000 pounds of U3O8 into our utility contract portfolio, also at healthy operating margins. We are closely tracking uranium prices, which have shown recent strength, for opportunities to sell additional uranium under long-term contracts to nuclear utilities at increasingly higher prices.
“Energy Fuels realized a significant gain of $116.45 million on the sale of our non-core Alta Mesa ISR project in Texas. Total consideration included $60 million of cash and a $60 million 2-year convertible note bearing 8% interest per year, fully secured by the property. This transaction also resulted in us receiving an additional $3.48 million cash for the return of collateral on the project’s reclamation bonds and a reduction in our standby costs of approximately $2 million per year.
“At the same time, we continue to perform significant work at four of our conventional uranium mines to get them ready to resume ore production. This includes the La Sal and Beaver mines at the La Sal Complex in Utah, the Whirlwind mine in Colorado and the Pinyon Plain mine in Arizona. Energy Fuels currently has sufficient uranium in inventory to fulfill our current utility contract requirements into 2025. However, we are seeking additional contracts and spot sale opportunities, along with a continuation of uranium purchasing by the U.S. government. Therefore, we could begin ore production at one or more of these projects by 2024.
“We continued to build our REE business as well. We began modifications and enhancements at the White Mesa Mill expected to produce up to 1,000 MT per year of NdPr oxide by late 2023 or early 2024, subject to receipt of sufficient monazite feed. We ordered the REE SX cells from a fabricator, with delivery to the Mill expected in Q3 or Q4-2023. Following delivery, we expect to install, commission, and optimize these cells, complete other modifications and enhancements to the existing circuits, and begin commercial production of NdPr oxide, along with uranium, soon thereafter. Upon completion, we believe Energy Fuels’ White Mesa Mill in Utah will house one of the largest NdPr production circuits in the world, excluding China. We also expect to begin piloting ‘heavy’ REE separation later this year, which will provide valuable knowledge for designing and building our Phase 3 Dy, Tb and potentially other REE separation circuits.
“Monazite supply is of course critical to Energy Fuels’ rare earth plans. We continue to advance discussions with several existing monazite suppliers around the world. And, we completed the acquisition of the Bahia Project in Brazil, which will allow us to control our own low-cost REE supply. The Bahia Project has the potential to produce between 3,000 to 10,000 MT of monazite, containing 300 to 1,000 MT of NdPr oxide, per year. We are currently in the midst of a sonic drilling program on the property to confirm and better define the REE (monazite), titanium (ilmenite, rutile, leucoxene) and zirconium (zircon) resources, which will inform our mine plan and permitting. We hope to commence production in late 2025 or early 2026, and ramp-up from there.
“Finally, we sold a small quantity of our vanadium inventory into recent market strength, which saw spot prices reach $10.80 per pound in February, according to Fastmarkets. Because we produce a high-purity V2O5 product that is attractive to specialty alloy and chemical markets, we were able to execute this sale at a premium to reported prices. Accordingly, our realized sales price was $10.98 per pound of V2O5 on these sales.”
Conference Call and Webcast at 4:00 pm ET on May 9, 2023:
Energy Fuels will be hosting a conference call and webcast on May 9, 2023 at 4:00 pm ET (2:00 pm MT) to discuss its Q1-2023 financial results, the outlook for 2023, and its uranium, rare earths, vanadium, and medical isotopes initiatives.
To instantly join the conference call by phone, please use the following link to easily register your name and phone number. After registering, you will receive a call immediately and be placed into the conference call: RAPIDCONNECT
Alternatively, you may dial in to the conference call by calling 1-888-664-6392, and you will be connected to the call by an Operator.
You may also access viewer-controlled Webcast slides and/or stream the call by following this link: WEBCAST
A replay of the call will be available until May 24, 2023 by calling (888) 390-0541 or (416) 764-8677 and entering the replay code, 680506#.
Selected Summary Financial Information:
Three Months Ended
March 31,
$000’s, except per share data
2023
2022
Results of Operations:
Uranium concentrates revenues
$ 18,470
$ —
Vanadium concentrates revenues
871
2,412
Total revenues
19,613
2,937
Gross margin
11,347
45
Operating loss
(405)
(10,213)
Net income (loss)
114,264
(14,730)
Basic and diluted net income (loss) per common share
0.72
(0.09)
As of
As of
$000’s
March 31, 2023
December 31, 2022
Financial Position:
Working capital
$ 143,611
$ 116,966
Property, plant and equipment, net
14,635
12,662
Mineral properties
113,834
83,539
Current assets
148,914
135,590
Total assets
375,451
273,947
Current liabilities
5,303
18,624
Total liabilities
16,438
29,538
ABOUT ENERGY FUELS
Energy Fuels is a leading US-based critical minerals company. The Company, as the leading producer of uranium in the United States, mines uranium and produces natural uranium concentrates that are sold to major nuclear utilities for the production of carbon-free nuclear energy. Energy Fuels recently began production of advanced rare earth element (“REE“) materials, including mixed REE carbonate, and plans to produce commercial quantities of separated REE oxides in the future. Energy Fuels also produces vanadium from certain of its projects, as market conditions warrant, and is evaluating the recovery of radionuclides needed for emerging cancer treatments. Its corporate offices are in Lakewood, Colorado, near Denver, and substantially all its assets and employees are in the United States. Energy Fuels holds two of America’s key uranium production centers: the White Mesa Mill in Utah and the Nichols Ranch in-situ recovery (“ISR“) Project in Wyoming. The White Mesa Mill is the only conventional uranium mill operating in the US 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 products, 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 Company recently acquired the Bahia Project in Brazil, which is believed to have significant quantities of titanium (ilmenite and rutile), zirconium (zircon) and REE (monazite) minerals. In addition to the above production facilities, Energy Fuels also has one of the largest NI 43-101 compliant uranium resource portfolios in the US 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.
Daniel Kapostasy, P.G., Director of Technical Services for Energy Fuels, is a Qualified Person as defined by Canadian National Instrument 43-101 and has reviewed and approved the technical disclosure contained in this news release, including sampling, analytical, and test data underlying such disclosure.
The data collected and provided in this disclosure related to the Bahia Project is derived entirely from the exploration reports for each of the seventeen mineral process areas. Mr. Kapostasy has reviewed these reports in detail and discussed the methods used with the project geologist in charge of field and laboratory activities for the previous owners who is also currently an employee of Energy Fuels Brazil, Ltda. Heavy mineral concentrations were derived for every meter drilled using heavy liquid separations, a standard method of heavy mineral determination.
To determine the concentration of the various heavy minerals in a sample, the heavy fraction was separated from the silica sand by using heavy liquid separation. The heavy fraction was then mounted in epoxy or dispersed on slide glass and viewed under a microscope. A geologist can then identify the various minerals and determine the concentration of each mineral through a process called point counting, whereby the geologist identifies each sand grain individually, tallies the number of each mineral and then divides by the total.
Verification of the heavy mineral concentration was started by the Company in September 2022, when it hired a contract driller to collect samples using a sonic rig. While no laboratory analyses have been received to date, visual estimation of the heavy mineral quantity indicates that the historical values seen at the various process areas are valid.
Cautionary Note Regarding Forward-Looking Statements: This news release contains certain “Forward Looking Information” and “Forward Looking Statements” within the meaning of applicable United States and Canadian securities legislation, which may include, but are not limited to, statements with respect to: production and sales forecasts; costs of production; any expectation that the Company will be awarded any future sales under the U.S. Uranium Reserve; scalability, and the Company’s ability and readiness to re-start, expand or deploy any of its existing projects or capacity to respond to any improvements in uranium market conditions or in response to the Uranium Reserve; any expectation as to future uranium, vanadium, RE Carbonate, REE oxide, or REE market fundamentals or sales; any expectation as to recommencement of production at any of the Company’s uranium mines or the timing thereof; any expectation regarding any remaining dissolved vanadium in the Mill’s tailings facility solutions or the ability of the Company to recover any such vanadium at acceptable costs or at all; any expectation as to longer term fundamentals in the market and price projections; any expectation that the Company will maintain its position as a leading U.S.-based critical minerals company or as the leading producer of uranium in the U.S.; any expectation with respect to timelines to production; any expectation that the sale of the Alta Mesa project and the use of the proceeds from that sale will not result in any dilution to shareholders; any expectation that the Mill will be successful in producing RE Carbonate on a full-scale commercial basis; any expectation that Energy Fuels will be successful in developing U.S. separation, or other value-added U.S. REE production capabilities at the Mill, or otherwise, including the timing of any such initiatives and the expected production capacity or capital and operating costs associated with any such production capabilities; any expectation with respect to the quantities of monazite to be acquired by Energy Fuels, the quantities of RE Carbonate or REE oxides to be produced by the Mill or the quantities of contained TREO in the Mill’s RE Carbonate; any expectation that the Company may sell its separated NdPr oxide to electric vehicle manufacturers; any expectation that the Bahia Project has the potential to feed the Mill with REE and uranium-bearing monazite sand for decades or at all; any expectation that the Company will complete comprehensive sonic drilling and geophysical mapping at the Bahia Project or complete an Initial Assessment under SK-1300 (U.S.) and a Technical Report Technical Report under NI 43-101 (Canada) during 2023, or otherwise; any expectation that the Company’s evaluation of radioisotope recovery at the Mill will be successful; any expectation that the potential recovery of medical isotopes from any radioisotopes recovered at the Mill will be feasible; any expectation that any radioisotopes can be recovered at the Mill will be sold on a commercial basis; any expectation as to the quantities to be delivered under existing uranium sales contracts; and any expectation that the Company will be successful in completing any additional contracts for the sale of uranium to U.S. utilities on commercially reasonable terms or at all. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “plans,” “expects,” “does not expect,” “is expected,” “is likely,” “budgets,” “scheduled,” “estimates,” “forecasts,” “intends,” “anticipates,” “does not anticipate,” or “believes,” or variations of such words and phrases, or state that certain actions, events or results “may,” “could,” “would,” “might” or “will be taken,” “occur,” “be achieved” or “have the potential to.” All statements, other than statements of historical fact, herein are considered to be forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements express or implied by the forward-looking statements. Factors that could cause actual results to differ materially from those anticipated in these forward-looking statements include risks associated with: commodity prices and price fluctuations; engineering, construction, processing and mining difficulties, upsets and delays; permitting and licensing requirements and delays; changes to regulatory requirements; legal challenges; the availability of sources of Alternate Feed Materials and other feed sources for the Mill; competition from other producers; public opinion; government and political actions; available supplies of monazite; the ability of the Mill to produce RE Carbonate, REE oxides or other REE products to meet commercial specifications on a commercial scale at acceptable costs or at all; market factors, including future demand for REEs; the ability of the Mill to be able to separate radium or other radioisotopes at reasonable costs or at all; market prices and demand for medical isotopes; and the other factors described under the caption “Risk Factors” in the Company’s most recently filed Annual Report on Form 10-K, which is available for review on EDGAR at www.sec.gov/edgar.shtml, on SEDAR at www.sedar.com, and on the Company’s website at www.energyfuels.com. Forward-looking statements contained herein are made as of the date of this news release, and the Company disclaims, other than as required by law, any obligation to update any forward-looking statements whether as a result of new information, results, future events, circumstances, or if management’s estimates or opinions should change, or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements. The Company assumes no obligation to update the information in this communication, except as otherwise required by law.
SOURCE Energy Fuels Inc.
For further information: Investor Inquiries: Energy Fuels Inc., Curtis Moore, SVP – Marketing and Corporate Development, (303) 974-2140 or Toll free: (888) 864-2125, investorinfo@energyfuels.com, www.energyfuels.com
CALGARY, AB, May 4, 2023 /CNW/ – Alvopetro Energy Ltd. (TSXV: ALV) (OTCQX: ALVOF) announces April 2023 average sales volumes and an operational update and timing for release of our Q1 2023 results and earnings call.
April 2023 Sales Volumes
April sales volumes averaged 1,972 boepd, including natural gas sales of 11.3 MMcfpd and associated natural gas liquids sales from condensate of 84 bopd, based on field estimates. Sales volumes in April declined from our average Q1 2023 of 2,767 boepd. April sales volumes were lower due to reduced demand during the month from Bahiagás as well as higher nominated volumes from our partner at the Caburé unit. We anticipate May sales volumes to continue at rates similar to average volumes in April. Future sales volumes will be dependent on available Caburé unit production, production additions from our Murucututu field with the development work planned this year and overall demand from Bahiagás.
Operational Update
In March, we commenced stimulation operations at our 197(1) well on our Murucututu natural gas field. While operations have progressed slower than initially scheduled, we have now successfully stimulated three of four planned intervals at the well, injecting a total of 89 tonnes of sand into the formation. Stimulation of the final interval is expected to be completed shortly and we expect the well to be on production this month. Following completion of stimulation operations, we plan to drill two Murucututu fit-for-purpose development wells in the second half of 2023.
On our Bom Lugar field, we spud our first development well (BL-06) on April 30th and drilling is underway. The BL-06 well is targeting the Caruaçu Formation with additional potential in the deeper Gomo and Agua Grande Formations. We expect drilling to be completed late in the second quarter.
Upcoming Q1 2023 Results and Live Webcast
Alvopetro anticipates announcing first quarter 2023 results on May 10, 2023, after markets close, and will host a live webcast to discuss the results at 8:00 am Mountain time, on May 11, 2023. Details for joining the event are as follows:
The webcast will include a question and answer period. Online participants will be able to ask questions through the Zoom portal. Dial-in participants can email questions directly to socialmedia@alvopetro.com.
Alvopetro Energy Ltd.’svision is to become a leading independent upstream and midstream operator in Brazil. Our strategy is to unlock the on-shore natural gas potential in the state of Bahia in Brazil, building off the development of our Caburé natural gas field and our strategic midstream infrastructure.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
All amounts contained in this new release are in United States dollars, unless otherwise stated and all tabular amounts are in thousands of United States dollars, except as otherwise noted.
Abbreviations:
bbls
=
barrels
boepd
=
barrels of oil equivalent (“boe”) per day
bopd
=
barrels of oil and/or natural gas liquids (condensate) per day
MMcf
=
million cubic feet
MMcfpd
=
million cubic feet per day
Q1 2023
=
three months ended March 31, 2023
BOE Disclosure. The term barrels of oil equivalent (“boe”) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet per barrel (6Mcf/bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions in this news release are derived from converting gas to oil in the ratio mix of six thousand cubic feet of gas to one barrel of oil.
Forward-Looking Statements and Cautionary Language. This news release contains “forward-looking information” within the meaning of applicable securities laws. The use of any of the words “will”, “expect”, “intend” and other similar words or expressions are intended to identify forward-looking information. Forward–looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the expectations discussed in the forward-looking statements. These forward-looking statements reflect current assumptions and expectations regarding future events. Accordingly, when relying on forward-looking statements to make decisions, Alvopetro cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties. More particularly and without limitation, this news release contains forward-looking information concerning the anticipated timing of completion of the 197(1) stimulation and drilling of the BL-06 well, anticipated timing of production commencement from the 197(1) well, expected natural gas allocations from the Caburé unit, natural gas sales and gas deliveries under the Company’s long-term gas sales agreement, plans relating to the Company’s operational activities, proposed exploration development activities and the timing for such activities and exploration and development prospects of Alvopetro. The forward–looking statements are based on certain key expectations and assumptions made by Alvopetro, including but not limited to expectations and assumptions concerning the performance of producing wells and reservoirs, foreign exchange rates, well development and operating performance, the timing of regulatory licenses and approvals, equipment availability, the success of future drilling, completion, testing, recompletion and development activities, expectations regarding Alvopetro’s working interest and the outcome of any redeterminations, environmental regulation, including regulation relating to hydraulic fracturing and stimulation, the ability to monetize hydrocarbons discovered, the outlook for commodity markets and ability to access capital markets, general economic and business conditions, the impact of the COVID-19 pandemic, weather and access to drilling locations, the availability and cost of labour and services, the regulatory and legal environment and other risks associated with oil and gas operations. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. Although Alvopetro believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Alvopetro can give no assurance that it will prove to be correct. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on factors that could affect the operations or financial results of Alvopetro are included in our annual information form which may be accessed on Alvopetro’s SEDAR profile at www.sedar.com. The forward-looking information contained in this news release is made as of the date hereof and Alvopetro undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Largo has a long and successful history as one of the world’s preferred vanadium companies through the supply of its VPURE™ and VPURE+™ products, which are sourced from one of the world’s highest-grade vanadium deposits at the Company’s Maracás Menchen Mine in Brazil. Aiming to enhance value creation at Largo, the Company is in the process of implementing a titanium dioxide pigment plant using feedstock sourced from its existing operations in addition to advancing its U.S.-based clean energy division with its VCHARGE vanadium batteries. Largo’s VCHARGE vanadium batteries contain a variety of innovations, enabling an efficient, safe and ESG-aligned long duration solution that is fully recyclable at the end of its 25+ year lifespan. Producing some of the world’s highest quality vanadium, Largo’s strategic business plan is based on two pillars: 1.) leading vanadium supplier with an outlined growth plan and 2.) U.S.-based energy storage business support a low carbon future.
Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Largo, Inc. will release 2023-1Q financial results on May 10th and hold a conference call to discuss results on May 11th. The company has previously (4/18/23) disclosed quarterly V2O5 production of 2,111 tonnes and sales of 2,849 tonnes. Sales were significantly above previous guidance of 2,300-2,500 tonnes. Consequently, we expect result to show improvement over the first quarter of last year when Largo sold 2,232 tonnes. We would note that 2023-1Q sales include 245 tonnes of purchased material, which we assume was done at a higher cost than produced V2O5.
Management’s guidance for the second quarter shows a build back of inventory. Management projects 2023-2Q production of 3,000-3,200 tonnes and sales of 2,300-2,500 tonnes. The reduction in sales and increase in production versus the first quarter could mean second quarter results will be below that reported in the first quarter. Importantly, some cost incurred during any quarter’s production may carry over into the next quarter when sales are completed. This will partially offset the impact of rising production and falling sales.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Indonesia Energy Filed Its 20-F (Foreign) Document with the SEC Providing Financial Data. Due to drilling and production delays, revenue growth has been slower than projected. The company continues to report negative cash flow and earnings as limited revenues are hard pressed to cover G&A costs. The result was a $4.5 million loss from operations for the year, an EBITDA loss of $3.5 million, and negative net income of $3.1 million ($0.35 per share). The results were below our expectations, although the Indo story is really one of operating developments, not near-term results.
Operations are quiet. The filing largely repeated previously stated plans for drilling in the Kruh Block (4 in 2024, 6 in 2025, and 4 in 2026). INDO has drilled four wells in the Kruh Block, the last of which is still awaiting final flow test results but expected to be put in production mid 2023. After the last well, the company put new drilling on hold to complete additional seismic studies. Importantly, limited production has meant that it may not be able to fully recover costs spent under the revenue sharing agreement (INDO has filed for an extension).
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
TORONTO–(BUSINESS WIRE)– Largo Inc. (“Largo” or the “Company”) (TSX: LGO) (NASDAQ: LGO) announces today that Andrea Weinberg has been appointed as an independent director to the Company’s Board of Directors (“Board”).
Largo Announces the Appointment of Andrea Weinberg to its Board of Directors (Photo: Business Wire)
J. Alberto Arias, Chairman of Largo’s Board of Directors commented: “Andrea’s extensive knowledge of the metals sector, global financial markets, and specifically Brazil, her native country where she resides, makes her an excellent addition to our Board of Directors. With Andrea, the Board has gained an invaluable member who will assist the Company in enhancing value for Largo shareholders.” He continued: “In addition, Andrea most recently served on the board of Largo Physical Vanadium Corp. (“LPV”) during its founding, providing her with a thorough understanding of both the vanadium market fundamentals and the innovative business model we developed between Largo, Largo Clean Energy and LPV. It is our view that LPV has the potential to substantially improve the competitiveness of the vanadium flow battery industry in the future and the prospects of vanadium demand in general.”
Andrea Weinberg commented: “As the vanadium industry enters an exciting new phase of growth, largely driven by the world’s decarbonization needs and clean energy transition, it is my pleasure to join Largo’s Board of Directors and work closely with the management team and other Board members to execute on the Company’s two-pillar business strategy. Largo has developed a compelling business proposition to help advance a low-carbon future and I am excited to be a part of it going forward.”
Ms. Weinberg is a Director of Cosan, a Brazilian holding company of logistics, gas, fuels, lubricants and mining assets in Brazil. She has over 25 years of experience in the financial markets working at companies such as BTG Pactual, BlackRock for Latin American and Global Emerging Market funds, AllianceBernstein and Dynamo Administradora de Recursos covering commodities (metals & mining, pulp and paper and oil), amongst other things. Before joining the buyside industry, Ms. Weinberg worked as a sell side analyst at Merrill Lynch (2004-2007) and Goldman Sachs (1998-2004) covering the Metals & Mining sector. Ms. Weinberg holds a Bachelor of Science in Chemical Engineering from Universidade Federal do Rio de Janeiro and a Master’s Degree in Financial Engineering & Operations Research from Columbia University.
About Largo
Largo has a long and successful history as one of the world’s preferred vanadium companies through the supply of its VPURETM and VPURE+TM products, which are sourced from one of the world’s highest-grade vanadium deposits at the Company’s Maracás Menchen Mine in Brazil. Aiming to enhance value creation at Largo, the Company is in the process of implementing an ilmenite concentration plant using feedstock sourced from its existing operations in addition to advancing its U.S.-based clean energy division with its VCHARGE vanadium batteries. Largo’s VCHARGE vanadium batteries contain a variety of innovations, enabling an efficient, safe and ESG-aligned long duration solution that is fully recyclable at the end of its 25+ year lifespan. Producing some of the world’s highest quality vanadium, Largo’s strategic business plan is based on two pillars: 1.) leading vanadium supplier with an outlined growth plan and 2.) U.S.-based energy storage business support a low carbon future.
Largo’s common shares trade on the Nasdaq Stock Market and on the Toronto Stock Exchange under the symbol “LGO”. For more information on the Company, please visit www.largoinc.com.
Investor Relations Alex Guthrie Senior Manager, External Relations +1.416.861.9778 aguthrie@largoinc.com
TORONTO–(BUSINESS WIRE)–Largo Inc. (“Largo” or the “Company”) (TSX: LGO) (NASDAQ: LGO) will release its first quarter 2023 financial results on Wednesday, May 10, 2023 after the close of market trading. Additionally, the Company will host a webcast and conference call to discuss its first quarter 2023 results and updates on Thursday, May 11 at 1:00 p.m. ET.
To join the conference call without operator assistance, you may register and enter your phone number at https://emportal.ink/40oF5sO to receive an instant automated call back.
You can also dial direct to be entered to the call by an Operator via dial-in details below.
To view press releases or any additional financial information, please visit the Investor Resources section of the Company’s website at: www.largoinc.com/English/investor-resources
About Largo
Largo has a long and successful history as one of the world’s preferred vanadium companies through the supply of its VPURETM and VPURE+TM products, which are sourced from one of the world’s highest-grade vanadium deposits at the Company’s Maracás Menchen Mine in Brazil. Aiming to enhance value creation at Largo, the Company is in the process of implementing an ilmenite concentration plant using feedstock sourced from its existing operations in addition to advancing its U.S.-based clean energy division with its VCHARGE vanadium batteries. Largo’s VCHARGE vanadium batteries contain a variety of innovations, enabling an efficient, safe and ESG-aligned long duration solution that is fully recyclable at the end of its 25+ year lifespan. Producing some of the world’s highest quality vanadium, Largo’s strategic business plan is based on two pillars: 1.) leading vanadium supplier with an outlined growth plan and 2.) U.S.-based energy storage business support a low carbon future.
Largo’s common shares trade on the Nasdaq Stock Market and on the Toronto Stock Exchange under the symbol “LGO”. For more information on the Company, please visit www.largoinc.com.
Contacts
Investor Relations Alex Guthrie Senior Manager, External Relations +1.416.861.9778 aguthrie@largoinc.com
Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
CEO/P Mehran Ehsan made a presentation at the Planet Microcap Showcase on April 26. The short, ten-minute presentation largely restated the company’s case that there is a disconnect between its asset value and its stock price. Mr. Ehsan once again pointed to a reserve study of its properties that values its properties at $428 million using a 10% discount rate versus the stock’s current enterprise value of $9 million. If one were to value the company based on just proved reserves, the value would still be $128 million. In fact, the value from only wells currently producing is $12 million, still above the current market capitalization.
Management believes the disconnect stems from its listing on the OTCQB exchange which limits manager investments in the company. The company has dropped plans to list on the New York Stock Exchange and now plans to list on the NASDAQ exchange. We believe such a move is prudent and that it will help reduce the valuation disconnect. This is especially important given Permex’s need for capital to drill out additional wells. Along those lines, management indicated that it plans to convert a vertical well drill last fall to a horizontal well. The drilling will use $1.1 million of the $1.67 million in cash on hand and take a few months to complete.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
Michael Heim, Senior Energy & Transportation Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Results demonstrate strong production growth and a sharp increase in cash flow and earnings. Production rates (preannounced) increased 55%. Increased production was partially offset by a drop in energy prices. Lower-than-expected prices were partially offset by a decrease in royalty rates. Production costs (excluding transportation costs) remain somewhat elevated as they were in the September quarter. We look for production costs per barrel to decrease modestly as new production comes on line in 2023.
As netbacks rose, so did the company’s Adjusted Fund Flow (AFF). The margin between prices and costs is high. Operating netbacks (realized prices less royalties and operating costs) is leading to strong cash flow which management is turning their focus toward returning to shareholders now that debt is virtually eliminated and drilling programs have been accelerated.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
Largo has a long and successful history as one of the world’s preferred vanadium companies through the supply of its VPURE™ and VPURE+™ products, which are sourced from one of the world’s highest-grade vanadium deposits at the Company’s Maracás Menchen Mine in Brazil. Aiming to enhance value creation at Largo, the Company is in the process of implementing a titanium dioxide pigment plant using feedstock sourced from its existing operations in addition to advancing its U.S.-based clean energy division with its VCHARGE vanadium batteries. Largo’s VCHARGE vanadium batteries contain a variety of innovations, enabling an efficient, safe and ESG-aligned long duration solution that is fully recyclable at the end of its 25+ year lifespan. Producing some of the world’s highest quality vanadium, Largo’s strategic business plan is based on two pillars: 1.) leading vanadium supplier with an outlined growth plan and 2.) U.S.-based energy storage business support a low carbon future.
Michael Heim, Senior Vice President – Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Largo announced reduced production but increased sales. Largo announced 2023-1Q V2O5 production of 2,111 tonnes (23 tonnes/day) near the upper end of guidance, albeit slightly below that in used our models. The 14% decrease in production versus the same period last year come due to heavy rain in the early part of the quarter, planned maintenance, and the transition of a mining contractor. These factors were known and reflected in our estimates. Production levels also reflect a decline in effective grade to 0.81% from 1.27% as less vanadium was produced despite a 13% increase in mined ore.
Sales rose despite lower production as the company sold inventory and purchased material. V2O5 equivalent sales were 2,849 tonnes in the quarter, up 28% over last year sales of 2,232 tonnes and well above guidance of 2,300-2,500 tonnes and our projections that assumed sales near production levels. Sales include 245 tonnes of purchased material versus only 79 tonnes last year.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
Image: Deuterium ionized into fusion plasma lets off a fuchsia glow (Helion)
A Hybrid Regulatory Approach by the NRC on Fusion
A fusion energy system is a power plant that harnesses energy released from the fusion of atomic nuclei to generate electricity. New commercial fusion designs intended to assist in the future of mass power, are being engineered with very little regulatory framework for them to design toward. The US Nuclear Regulatory Commission (NRC) Chairman Christopher Hanson wants the regulatory framework for fusion energy systems based on its existing process for licensing the use of byproduct materials. A new framework may add to the number of companies designing and developing pilot reactors.
The process of fusion involves bringing together atomic nuclei under high temperatures and pressures to create a plasma state, where the positively charged nuclei fuse to form heavier elements, releasing a large amount of energy in the process. Unlike traditional nuclear power plants, which rely on nuclear fission, fusion power plants do not produce long-lived radioactive waste and have a virtually limitless supply of fuel in the form of hydrogen isotopes found abundantly in seawater. Fusion energy, holds great promise as a clean and sustainable source of energy as fossil fuels fall from favor.
“Dozens” of companies are developing pilot-scale commercial fusion designs, according to NRC Chair Christopher Hanson. In a press release by the NRC last Friday Hanson said the “precise future” for fusion in the USA is uncertain, the agency should provide “as much regulatory certainty as possible given what we know today.” The reason provided in the release said,”Licensing near-term fusion energy systems under a byproduct material framework will protect public health and safety with a technology-neutral, scalable regulatory approach.”
Is this overstepping on the part of the NRC? The Commission describes a fusion system as a device that contains nuclear fusion reactions as well as associated radioactive materials and supporting structures, systems and components – would generate electricity from the energy released when hydrogen atoms are combined to form helium, rather than the splitting, or fission, of uranium atoms. This very definition causes the systems to fall outside the requirements to be regulated by NRC as nuclear reactors, because they do not involve special nuclear material (plutonium, uranium-233 or enriched uranium) and cannot produce the self-sustained neutron chain reaction that defines nuclear fission reactors under NRC regulations.
The NRC staff outlined suggested options earlier in 2023 for the licensing and regulation of fusion systems. It categorized them as “utilization facilities”, with a novel regulatory framework developed to address associated specific hazards. These include a byproduct material approach, which adds to the existing regulations for byproduct material licenses. It also included a hybrid framework where the decision on whether a byproduct material or a utilization facility approach would be most appropriate for a particular system based on the potential dangers and hazards inherent to it – it would need to define what would be most applicable for that system. The NRC staff supported the use of a hybrid system in its submission.
Tritium and other radioactive materials which occur or are used in fusion systems have been categorized by the NRC as byproduct material. The NRC has now directed its staff to create a regulatory framework for fusion systems built on the agency’s existing process for licensing the use of such materials.
Image: @Helion_Energy (Twitter)
The Commission will move forward with a “limited revision” to materials licensing regulations, including consideration of whether the revision should include a new category specifically for fusion energy systems. The rule, according to the NRC, take into account fusion systems “that already have been licensed and are being regulated by the Agreement States, as well as those that may be licensed prior to the completion of the rulemaking”. The commission staff is also exected to expand materials license guidance to cover fusion systems across the US.
The US Department of Energy (DOE) announced in 2022 up to $50 million of federal funding to support experimental research in fusion energy science as part of the Biden administration’s vision to accelerate fusion energy. New designs are speeding along as a few fusion systems are likely reach design proof-of-concept, and even net power production later this decade, with deployment projected to follow in the 2030s, according to the NRC.
One US fusion system developer, Helion Energy, expressed support for the NRC’s announcement. “This approach provides a clear and effective regulatory path for our team to deploy clean, safe fusion energy,” the company said on Twitter.
