DALLAS, Feb. 21, 2023 (GLOBE NEWSWIRE) — Permex Petroleum Corporation (CSE: OIL) (OTCQB: OILCD) (FSE: 75P) (“Permex” or the “Company”), an independent energy company engaged in the acquisition, exploration, development and production of oil and natural gas properties on private, state and federal land in the United States, has received an updated independent reserve evaluation from MKM Engineering (the “Reserve Report”), effective November 21, 2022, that uses proved and probable reserve classifications that conform to the criteria established by the United States Securities and Exchange Commission (the “SEC”).
Reserve Evaluation
According to the Reserve Report, the net present value of net future revenues, (net of royalties, operating costs and capital expenditures, including asset retirement obligations) before income tax, discounted at 10% (“NPV 10%” or “PV10”) of the total proved plus probable reserves is estimated at $428 million, or $221.53 per outstanding share (basis).
Reserves comprised of 93% light oil, and x7% natural gas
Total Proved Reserves of 9.2 million BOE and PV10 value of $198 million, an increase of 51% Year-over-Year
Total Probable Reserves of 17.8 million BOE and PV10 value of $230 million, an increase of 46% Year-over-Year
Total Proved & Probable Reserves of 27.0 million BOE and PV10 value of $428 million, an increase of 48% Year-over-Year
Summary of Net Oil and Gas Reserves and Net Present Value of Revenue:
Before Income Taxes as of September 30, 2022 – Forecast Prices and Costs
Reserves Mboe
NPV 10% ($ thousand)
NPV per BOE $/boe
Proved Developed Producing
730.8
12,057.6
16.50
Total Proved
9.238.3
198,619.1
21.49
Proved Plus Probable
27,014.2
428,186.5
15.85
Natural Gas: 5.98 Mcf/boe
Report used McDaniel’s & Associates price forecast effective September 30, 2022
“This Reserve Report reconfirms the large reserves in place, and we remain focused on drilling and developing while redeploying the expected strong cash-flow from the completed wells back into drilling programs,” said Mehran Ehsan, President and CEO of Permex. “We look forward to providing additional updates as we continue to ramp up our drilling operations to drive organic growth for our Company and sustainable value for our shareholders.”
The Reserve Report uses prices calculated using oil and natural gas price parameters established by current guidelines of the SEC and accounting rules based on the unweighted arithmetic average of oil and natural gas prices as of the first day of each of the 12 months ended on the given date. A full copy of the Reserve Report was filed with the SEC as an exhibit to the Company’s Form 10-K for the year ended September 30, 2022.
About Permex Petroleum Corporation
Permex Petroleum is a uniquely positioned junior oil and gas company with assets and operations across the Permian Basin of West Texas and the Delaware Sub-Basin of New Mexico. The Company focuses on combining its low-cost development of Held by Production assets for sustainable growth with its current and future Blue-Sky projects for scale growth. The Company, through its wholly-owned subsidiary, Permex Petroleum US Corporation, is a licensed operator in both states, and owns and operates on private, state and federal land. For more information, please visit www.permexpetroleum.com.
Forward-Looking Statements
Statements in this press release may constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995 and other federal securities laws as well as applicable Canadian securities laws. These forward-looking statements are made on the basis of the current beliefs, expectations and assumptions of management, are not guarantees of performance and are subject to significant risks and uncertainty, including but not limited to, uncertainties inherent in estimating natural gas and oil reserves and in projecting future rates of production. These forward-looking statements should, therefore, be considered in light of various important factors, including those set forth in Company’s reports that it files from time to time with the SEC and the Canadian securities regulators which you should review. When used in this press release, words such as “will,” “could,” “plan,” “estimate”, “expect”, “intend”, “may”, “potential”, “believe”, “should” and similar expressions, are forward-looking statements. Forward-looking statements may include, without limitation, statements relating to the Company’s financial condition and operating results, legal, economic, business, competitive and/or regulatory factors affecting Permex’s businesses, the Company’s plan to increase drilling operations and to grow organically, the Company’s future cash flow position, and any other statements regarding events or developments Permex believes or anticipates will or may occur in the future. These forward-looking statements should not be relied upon as predictions of future events, and the Company cannot assure you that the events or circumstances discussed or reflected in these statements will be achieved or will occur. If such forward-looking statements prove to be inaccurate, the inaccuracy may be material. You should not regard these statements as a representation or warranty by the Company or any other person that it will achieve its objectives and plans in any specified timeframe, or at all. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company disclaims any obligation to publicly update or release any revisions to these forward- looking statements, whether as a result of new information, future events or otherwise, after the date of this press release or to reflect the occurrence of unanticipated events, except as required by law.
Contact Information
Permex Petroleum Corporation
Mehran Ehsan President, Chief Executive Officer & Director (469) 804-1306
Image: Silver Peak Lithium Mine, Nevada – Ken Lund (Flickr)
The Lithium Dip May Be Worth Exploring
Lithium (Li) was once synonymous with treating depression. Today the mineral is more often discussed as part of the subject of sustainable energy storage, specifically batteries. So it’s ironic that the recent stock price movement of a number of companies tied to lithium may have depressed some investors, as February has seen a sudden depression in values. The primary reason for the decline in lithium stocks may actually be a net plus for miners and others tied to production. This thinking is outlined below.
Many companies involved in Li exploration and/or production were up on the year along with the overall market. Late last week and carrying over to today, many of these stocks have fallen dramatically. The reason for the sudden decline coincided with the largest EV battery manufacturer, Contemporary Amperex Technology’s (CATL) announcement that it will cut the price it charges for Li-ion batteries.
As seen in the chart below, Shares of the larger lithium miners Albemarle ALB (ALB), SQM (SQM), Livent (LTHM), Piedmont Lithium (PLL), and Lithium Americas (LAC) are down between 7% and 14% with much of that drop coming in the past few trading days. Smaller lithium mining operations like LithiumBank Resources Corp. (LBNKF), and Century Lithium Corp. (CYDVF) fared much better, outperforming the more established larger companies.
CATL seems to have aimed to maintain or grow its market share as a battery manufacturer. Any price war they may have started is likely to have a direct impact on competitors. Even car manufacturers that are involved in battery sales may shed some profitability, but is it necessarily a negative for companies involved in mining or refining?
CATL plans on pricing its batteries on a lithium-price-linked calculation. With this, 50% of each battery will benchmark to lithium carbonate, which would largely embed the price of lithium in its Li-ion product. The rest of the batteries will key off of the spot market for lithium carbonate.
Spot prices for lithium carbonate are up about ninefold over the past few years as the growth in EV demand and other battery-operated products has stressed the global lithium supply chain. So while CATL has decided to discount batteries, the production costs are unlikely to fall. The move may instead place greater demand on lithium carbonate. If production doesn’t keep up with, what should spark greater demand for Li-ion batteries, miners may benefit. If correct, this could suggest the declines in mining stock prices related to CATL’s new pricing policy, may be considered as an entry point for investors that had been looking for a price dip.
As for battery makers, this may have more permanently drained value. CATL is about 68% of the mainland Chinese EV battery manufacturing industry. Other battery producers may have to similarly adjust their pricing models to compete. This group includes Panasonic, LG Energy, Samsung, and SK Innovations that also tumbled this month.
Take Away
Mining analysts discuss supply and demand, or deficit and surplus, when adjusting forecasts. If demand grows as a result of the large battery manufacturer CATL discounting prices, and this discounting causes others to follow, the result could be a larger lithium deficit that could raise the price of the mineral per USD/metric-ton. Time will tell.
TORONTO–(BUSINESS WIRE)– Largo Inc. (“Largo” or the “Company”) (TSX: LGO) (NASDAQ: LGO) will release its fourth quarter and annual 2022 financial results on Thursday, March 9, 2023 after the close of market trading. Additionally, the Company will host a webcast and conference call to discuss its fourth quarter and annual 2022 results and updates on Friday, March 10 at 1:00 p.m. ET.
To join the conference call without operator assistance, you may register and enter your phone number at https://bit.ly/3Yho3fJ 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 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.
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) announces a change in leadership in which Paulo Misk, President and Chief Executive Officer has left the organization with immediate effect.
The Company’s Board of Directors (“the Board”) has appointed Mr. Daniel Tellechea as interim Chief Executive Officer to assist the Company through this period of transition. Mr. Tellechea has served on the Company’s Board of Directors since 2015 and currently serves as the Chair of the Company’s Operations Committee.
A search for a permanent Chief Executive Officer has begun and the Company has not amended its goals or objectives planned for the ensuing year, including its previously announced 2023 guidance.
J. Alberto Arias Chairman of the Board of Directors stated, “Daniel has extensive experience in the metals and mining sector with some of the most successful metal companies in the Americas. His skill set will be invaluable during this period of management transition and his priority will be on the efficiency of the Company’s vanadium operations in Brazil. The Company continues with its goal of adding shareholder value through its two-pillar strategy as a tier one vanadium supplier with an emerging U.S.-based energy storage business with manufacturing facilities in Massachusetts.”
Mr. Tellechea has extensive experience in international mining, most recently serving as President & CEO of Sierra Metals, Inc. from 2007 to 2014, a Toronto based mining company listed on both the Toronto Stock Exchange with assets in Mexico and Peru. Prior to Sierra Metals, Mr. Tellechea was President and CEO of Asarco LLC from 2003 to 2005, and also served as the Managing Director of Finance and Administration for Asarco’s parent, Grupo Mexico from 1994 to 2003. Mr. Tellechea also served as Asarco’s Chief Financial Officer and Vice President of Finance for Southern Copper Corporation, which was majority owned by Grupo Mexico. Mr. Tellechea earned a Bachelor of Science in Accounting and a Master’s Degree in Business Administration from Tecnologico de Monterrey.
About Largo
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.
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
DALLAS, Feb. 15, 2023 (GLOBE NEWSWIRE) — Permex Petroleum Corporation (CSE: OIL) (OTCQB: OILCF) (FSE: 75P) (“Permex” or the “Company”), an independent energy company engaged in the acquisition, exploration, development, and production of oil and natural gas properties on private, state and federal land in the United States, today issued a letter to shareholders from its President & CEO, Mehran Ehsan.
Dear Fellow Shareholders:
Building upon the strong foundation laid in prior years, our team continued to advance our evolving position in the North American oil and gas market during 2022, executing our strategy to add sustainable marginal production through low risk, low cost recompletions while preparing for drilling programs for continued growth.
Within our current portfolio of 78 oil and gas wells, our near-term focus remains on recompletions and stimulations of approximately 30 wells that we believe have the potential in coming online at an average of 5 to 10 barrels of oil equivalent per day (BOEPD). Across our properties in west Texas and southeast New Mexico, we successfully recompleted seven wells in 2022 that have collectively stabilized at a rate of 71 BOEPD.
In January 2022, we began the pilot re-entry on the West Henshaw well #15-3 in New Mexico. The recompletion was successful, came online at an initial rate of 30 barrels of oil per day (BOPD), and has stabilized at 15 BOPD. We believe production rates from this mature, long-life well will continue with less than 10% decline year over year.
We also successfully recompleted the West Henshaw well #6-10 in the first half of 2022 with production coming online at an initial rate of 15 BOPD and stabilizing at 10 BOPD, a rate which we also believe can continue with less than 10% decline year over year.
The Railroad Commission of Texas approved our permit application for drilling on our flagship property in Martin County, Texas, in August 2022, reviewing and approving our request for well development.
Also in 2022, we continued our re-entry and stimulation program on our Henshaw Premier Unit and Oxy Yates properties situated in Eddy County, New Mexico. The re-entry and stimulations involved targeting the Grayburg formation in the Henshaw well numbers 107, 2L, 3B, while targeting the Yates formation in Oxy yates 14-3 well. We also recompleted the Mabee Breedlove Clearfork Unit #12 on our Breedlove field within the Clearfork formation located in Martin County. The recompletions were successful, came online at a combined initial production rate of 50 BOPD, and have stabilized at a rate of 35 BOPD. In addition to the re-entry and stimulation of the wells, we have begun an extensive enhanced oil recovery study on the Clearfork formation for our Martin County asset. This includes a review of all injection wells, downhole pressure, and communication between injectors and receiving wells.
In August, we commenced drilling our Martin County flagship property – the 7,780 gross acre Breedlove oilfield in September 2022 with two initial wells permitted. In November, we announced the successful completion of the first phase of drilling on our Eoff PPC#3 well which is the formation test on a vertical basis. We achieved a target depth of 8,100 ft (2468 meters) with the casing run to total depth. It is worth noting that the hole is pre cased with 8 5/8 casing which prepares the wellbore for lateral drilling and converting it to a horizontal well. The electric wireline logging sequence of the wellbore was also completed, and we believe the results to be positive and favorable as all indications from the drilling show multiple zones which allows us to proceed with the next steps of perforation, conversion, and completion.
We believe that there is significant value to be created by drilling the identified undeveloped opportunities on our properties in conjunction with the stimulation and rework of our shut-in wells. While our near-term plans are focused on drilling wells on our existing 11,700 acres to develop the potential contained therein, our long-term plans also include continuing to evaluate acquisition and leasing opportunities that can earn attractive rates of return on capital employed.
Looking at our financial position, we closed a $7.5 million brokered private placement in the first half of 2022 enabled us to considerably strengthen our balance sheet and ending us to end the fiscal year with $3.3 million in cash and cash equivalents, up more than tenfold year-over-year.
Turning to the broader markets, oil prices began rallying off their lows at year end, after declining for much of the second half of 2022, in part due to OPEC+ production cuts that began in November. Importantly, OPEC+ pledged to continue to support the market at a recent meeting in early February, with producers reconfirming their commitment to cut production by 2 million barrels per day (BPD) through the remainder of 2023. While fears of global recession remain a drag on prices, a potential rebound in Chinese demand could further support an upward trajectory on prices moving forward.
Finally, we further strengthened our team in 2022 with great additions to both our management and board. On the management side, we welcomed Greg Montgomery as our new Chief Financial Officer in May. Greg has served on our board since 2020 and provided our leadership team with invaluable guidance. In addition to his existing knowledge of Permex’s operations, he has vast experience in the oil and gas industry, including prior CFO and management roles with public companies. This makes Greg uniquely qualified to lead our financial strategy. In October, we also welcomed Melissa Folz P.E. as the newest member of our board. Melissa brings an extensive background from the oil and gas industry, and I believe she will contribute meaningfully to our strategic plans and growth as an organization.
Looking ahead, we are focused on the drilling and development of our unique asset base while redeploying the expected strong cash flow from completed wells back into further drilling and development programs. Additionally, we continue to evaluate acquisition opportunities of undervalued, low-risk opportunities that support building a strong portfolio with strategic development upside.
Thank you to all our shareholders, partners, and staff for your support on our journey. As we continue to work diligently to execute on our methodical approach to sustainable, long-term growth, I am confident that Permex will thrive in the years ahead.
On Behalf of your Permex Team,
Mehran Ehsan
Chief Executive Officer
About Permex Petroleum Corporation
Permex Petroleum is a uniquely positioned junior oil and gas company with assets and operations across the Permian Basin of West Texas and the Delaware Sub-Basin of New Mexico. The Company focuses on combining its low-cost development of Held by Production assets for sustainable growth with its current and future Blue-Sky projects for scale growth. The Company, through its wholly-owned subsidiary, Permex Petroleum US Corporation, is a licensed operator in both states, and owns and operates on private, state and federal land. For more information, please visit www.permexpetroleum.com.
Forward-Looking Statements
Statements in this press release may constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995 and other federal securities laws as well as applicable Canadian securities laws. These forward-looking statements are made on the basis of the current beliefs, expectations and assumptions of management, are not guarantees of performance and are subject to significant risks and uncertainty. These forward-looking statements should, therefore, be considered in light of various important factors, including those set forth in Company’s reports that it files from time to time with the U.S. Securities and Exchange Commission and the Canadian securities regulators which you should review. When used in this press release, words such as “will,” “could,” “plan,” “estimate”, “expect”, “intend”, “may”, “potential”, “believe”, “should” and similar expressions, are forward-looking statements. Forward-looking statements may include, without limitation, statements relating to the Company’s plans to list on NYSE American, financial condition and operating results, legal, economic, business, competitive and/or regulatory factors affecting Permex’s businesses and any other statements regarding events or developments Permex believes or anticipates will or may occur in the future. These forward-looking statements should not be relied upon as predictions of future events, and the Company cannot assure you that the events or circumstances discussed or reflected in these statements will be achieved or will occur. If such forward-looking statements prove to be inaccurate, the inaccuracy may be material. You should not regard these statements as a representation or warranty by the Company or any other person that it will achieve its objectives and plans in any specified timeframe, or at all. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company disclaims any obligation to publicly update or release any revisions to these forward- looking statements, whether as a result of new information, future events or otherwise, after the date of this press release or to reflect the occurrence of unanticipated events, except as required by law.
Contact Information
Permex Petroleum Corporation
Mehran Ehsan President, Chief Executive Officer & Director (469) 804-1306
Sale provides Energy Fuels with significant non-dilutive funding for expansion of industry-leading US uranium production and completion of ‘Phase 1’ rare earth separation circuit.
LAKEWOOD, Colo., Feb. 15, 2023 /CNW/ – Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) (“Energy Fuels” or the “Company”) is pleased to announce that it has completed the sale (the “Closing“) of three (3) wholly-owned subsidiaries that together hold Energy Fuels’ Alta Mesa ISR Project (“Alta Mesa“) to enCore Energy Corp. (“enCore“) for total consideration of $120 million (the “Transaction“). Unless otherwise indicated, all references to dollar amounts in this press release are references to US$.
The consideration is comprised of:
$60 million cash at or prior to Closing; and
$60 million in a secured convertible note (the “Note“), payable in two (2) years from the Closing, bearing annual interest of eight percent (8%). The Note will be convertible at Energy Fuels’ election into enCore common shares at a conversion price of $2.9103 per share, being a 20% premium to the 10-day volume-weighted average price of enCore shares ending the day before the Closing. enCore was recently listed on the NYSE American and also trades on the TSX Venture Exchange. The Note is guaranteed by enCore and is fully secured by Alta Mesa. Unless a block trade or similar distribution is executed by Energy Fuels to sell enCore shares received upon conversion of the Note, Energy Fuels will be limited to converting the Note into a maximum of $10 million principal amount per thirty (30) day period.
In addition, enCore is required to replace the existing reclamation bonds for the Alta Mesa project shortly after the Closing, which will result in Energy Fuels receiving an additional $3.6 million cash as a return of collateral from those bonds. The Transaction also reduces the Company’s holding costs related to Alta Mesa by approximately $2 million per year.
The Transaction provides Energy Fuels with significant additional cash and working capital, enabling the Company to ramp-up its US industry-leading uranium and rare earth element (“REE“) production, while avoiding dilution to shareholders. In addition, the Note provides Energy Fuels with significant exposure to uranium market upside through potential conversion into enCore common shares.
Boosting Industry-Leading US Uranium Production:
Energy Fuels plans to invest a portion of the proceeds from the Transaction into increasing its US industry-leading uranium production. At the current time, the Company’s White Mesa Mill (the “Mill“) is the only US uranium facility producing material quantities of uranium, having produced 162,000 pounds of U3O8 in Q4-2022. The Company is also preparing four (4) of its conventional uranium and uranium/vanadium mines to be ready to resume uranium ore production, including significant workforce expansion and performing needed rehabilitation of surface and underground infrastructure. The exact timing for resumption of ore production from each of these projects will be subject to current and future uranium sales and inventory requirements.
Energy Fuels’ 2022 uranium production of 162,000 pounds exceeded its previously announced guidance of 130,000 to 140,000 pounds of U3O8. In addition, over the past several months, the Company has invested in additional uranium inventories, having purchased approximately 301,000 pounds of US-origin U3O8 at a weighted average price of $50.08 per pound. In addition, in January 2023, the Company sold 300,000 pounds of U3O8 to the US government for the establishment of the strategic Uranium Reserve, earning total gross proceeds of $18.5 million, or $61.57 per pound.
As a result of 2022 production, recent purchases, and the sale to the US government, Energy Fuels currently holds approximately 847,000 pounds of U3O8 in inventory at a book value of $29.19 per pound (worth about $42.5 million at the current weekly uranium spot price as reported by TradeTech). In combination with future uranium production, the Company expects to utilize this inventory to fulfill its delivery obligations under its supply contracts with US nuclear utilities. Energy Fuels is also actively seeking additional uranium sales contracts with nuclear utilities at increasingly higher uranium prices bolstered by improving market fundamentals, including the global energy transition toward less carbon intensive sources of energy, including nuclear, efforts to move away from Russian uranium and nuclear fuel supply, and other factors related to transportation and security of supply. As a result of the Company’s strategic moves in the uranium space, the Company believes it is creating significant flexibility by growing and managing its existing inventories and preparing several of its US assets for near-term production.
Investing in Production of Advanced Rare Earth Materials in the US:
In a February 13, 2023 news release, the Company announced that it had achieved several milestones related to its expanding REE supply chain, including completion of the acquisition of the Bahia Project in Brazil and continued progress on procuring natural monazite sand concentrate. Today, the Company is producing the most advanced REE material in the US and is currently performing modifications and enhancements to the existing solvent extraction (“SX“) circuits at the Mill (“Phase 1“) that are expected to enable Energy Fuels to annually produce up to 5,000 metric tons (“MT“) of total REE oxides (“TREO“), including up to 1,000 MT of neodymium-praseodymium (“NdPr“) oxide (or oxalate), subject to receipt of sufficient REE-bearing monazite sand supply and successful commissioning. The “Phase 1” circuit will be in the same SX building where uranium and vanadium is produced at the Mill. If these milestones are achieved, Energy Fuels believes it will be the ‘first to market’ among US companies with commercial quantities of separated NdPr available to electric vehicle (“EV“), renewable energy, and other companies for offtake, while fully maintaining our uranium and vanadium recovery capabilities. Energy Fuels’ “Phase 1” “light” separation circuit is expected to produce commercial quantities of separated NdPr oxide (or oxalate) by later this year or early 2024, followed by planned further enhancements to expand NdPr production capability (“Phase 2“) and to produce separated “heavy” REEs, including Dy, Tb, and potentially other REE materials, in the future (“Phase 3“) from monazite and potentially other REE-bearing process streams.
Mark S. Chalmers, President and CEO of Energy Fuels stated: “Energy Fuels’ sale of the Alta Mesa project for $120 million of total consideration is highly strategic for a variety of reasons. When combined with our already strong balance sheet, the proceeds from this sale are expected to fully fund our current uranium, vanadium and rare earth business plans through approximately 2024 without the dilution to shareholders one might normally expect, nor depletion of working capital. On the uranium front, this sale provides Energy Fuels with the ability to make the focused investments in infrastructure and human capital required to resume production at our lowest-cost and nearest-term uranium mines and facilities. We believe Energy Fuels will be among the quickest to market with significant new US uranium production and retain our position as the leading US uranium producer for many years to come.
“Of the four (4) conventional mines we are currently preparing for production, three (3) produce both uranium and vanadium. Vanadium prices are currently on the move, having risen from $7.50 per pound of V2O5 in October 2022 to $10.80 per pound today. Vanadium is important to our uranium business, as strong vanadium prices contribute to the economics of these mines, making them a more attractive option for us as we evaluate which mines to place back into production. Due to today’s strong vanadium markets, we are also evaluating the sale of more of our existing vanadium inventory which currently sits at 987,000 pounds of V2O5.
“Even though uranium is Energy Fuels’ core business, we expect to invest some of the proceeds from the sale of Alta Mesa into our rapidly expanding rare earths business. We have started the modifications and enhancements at our White Mesa Mill in Utah that are expected to produce commercial quantities (500 – 1,000 MT) of NdPr oxide (or oxalate) by later this year or early in 2024, while maintaining our uranium and vanadium capabilities. NdPr oxide is a high-demand advanced material needed in the EV, renewable energy and defense industries. We are not aware of any other US company that will get this far down the US rare earth supply chain as quickly as Energy Fuels. It is also virtually unheard of anywhere else in the world to produce uranium, vanadium and separated rare earths in the same building, which demonstrates the creativity and resourcefulness of the team at the Mill.
“We also expect to invest some of the proceeds from Alta Mesa into advancing our Bahia Project in Brazil, where we plan to continue our comprehensive sonic drill program in 2023 to better define and delineate the titanium (ilmenite and rutile), zirconium (zircon), and of course rare earths (monazite) resources. We believe the Bahia Project has the potential to produce 3,000 to 10,000 MT per year of monazite concentrate for our Mill as soon as 2025 and for decades to come. Bahia, combined with other Company-owned and third-party monazite sources, is expected to supply the feed for ‘Phase 1’ and ‘Phase 2’ ‘light’ rare earth separation, and ‘Phase 3’ ‘heavy’ rare earth separation at the Mill.
“We see our rapidly developing REE business as highly complementary to our primary uranium business. We can utilize our existing facilities to recover uranium and REEs from monazite, which increases our uranium production and also allows us to generate margins from multiple commodities. No other US uranium producer has the ability to complement its primary uranium business in this manner.
“Finally, the $60 million secured convertible note Energy Fuels received from enCore at closing provides the Company with additional uranium market upside through the potential conversion of the Note into enCore Energy shares at an attractive conversion price.”
ABOUT ENERGY FUELS
Energy Fuels is a leading US-based critical minerals company. The Company 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.
This news release contains “forward-looking information” within the meaning of applicable securities laws in the United States and Canada. Forward-looking information may relate to future events or future performance of Energy Fuels. All statements in this release, other than statements of historical facts, with respect to Energy Fuels’ objectives and goals, as well as statements with respect to its beliefs, plans, objectives, expectations, anticipations, estimates, and intentions, are forward-looking information. Specific forward-looking statements in this discussion include, but are not limited to, the following: any expectation that the Company will receive an additional $3.6 million cash as a return of collateral from the Alta Mesa reclamation bonds; any expectation that the conversion price of the Note may be attractive or that the Company will convert all or any portion of the Note; any expectation that the proceeds from the sale of Alta Mesa will fully fund the Company’s current uranium, vanadium and REE business plans through approximately 2024 without dilution to shareholders or depletion of working capital; any expectation that the Company will invest a portion of the proceeds of the Transaction into its uranium production; any expectation that the Company will successfully prepare any of its mines to resume ore production or that any of its mines will enter into production in the near term or at all; any expectation that the Company will utilize any of its inventories to fulfill delivery obligations under its existing supply contracts or will be successful in obtaining any additional supply contracts; any expectation as to the quantities of uranium and heavy minerals, including monazite, NdPr, Dy and Tb contained in the Bahia Project; any expectation as to the potential annual supply of monazite sands from the Bahia Project to the Mill, the contained MT of TREO per year, or the number of years or decades of such potential supply; any expectation as to the timing of mining at the Bahia Project; any expectation that the Company will complete its Phase 1, Phase 2 and/or Phase 3 separation facilities on the time frames indicated, if at all; any expectation as to the expected throughput rates, production capability, and REEs to be produced; any expectation that the Company will be the first to market among US companies with commercial quantities of separated NdPr available to EV, renewable energy and other companies for offtake; any expectation that the Company will retain its position as the leading US uranium producer for many years to come; any expectations as to vanadium or other commodity prices; any expectation that the Company will sell any of existing inventory at attractive prices or at all; any expectation that the Company will be able to utilize the Mill to generate margins from recovering uranium and REEs from monazite sands and other ores independent of the price of uranium; any expectation that the Company’s REE business may become a profitable stand-alone business for the Company, or provide commodity price diversification for the Company; and any expectation that the Mill is a unique and highly strategic asset in the US. Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “continues”, “forecasts”, “projects”, “predicts”, “intends”, “anticipates” or “believes”, or variations of, or the negatives of, such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “should”, “might” or “will” be taken, occur or be achieved. This information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. Factors that could cause actual results to differ materially from those anticipated in these forward-looking statements include risks associated with: technical difficulties; mining or processing difficulties and upsets;licensing, permitting and regulatory delays; litigation risks; competition from others; political actions or instability in foreign countries; and market factors, including future demand for and prices realized from the sale of uranium, vanadium and REEs. Forward-looking statements contained herein are made as of the date of this news release, and Energy Fuels 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. Energy Fuels assumes no obligation to update the information in this communication, except as otherwise required by law.
SOURCE Energy Fuels Inc.
For further information: ENERGY FUELS, Curtis Moore – VP of Marketing & Corporate Development, (303) 974-2154; CONTACT: ENERGY FUELS, Curtis Moore – SVP of Marketing & Corporate Development, (303) 974-2154
Acquisition of Bahia Project expected to supply the raw materials needed by the Company’s US facility for the production of advanced rare earth materials used in EVs, clean energy, and defense technologies.
LAKEWOOD, Colo., Feb. 13, 2023 /CNW/ – Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) (“Energy Fuels” or the “Company”) is pleased to announce that it has completed its previously announced acquisition (the “Closing“) of seventeen (17) mineral concessions between the towns of Prado and Caravelas in the State of Bahia, Brazil totaling 15,089.71 hectares (approximately 37,300 acres or 58.3 square miles) (the “BahiaProject“). The Closing followed the Brazilian Government’s approval of the transfers to Energy Fuels’ wholly owned Brazilian subsidiary Energy Fuels Brazil, Ltda. At the Closing, the Company paid the mineral owners the remaining $21.9 million cash.
As previously reported, the Bahia Project is a well-known heavy mineral sand (“HMS“) deposit that has the potential to supply 3,000 – 10,000 metric tons (“MT“) of natural monazite concentrate per year for decades to Energy Fuels’ White Mesa Mill in Utah (the “Mill“) for processing into high-purity rare earth element (“REE“) oxides and other materials. As used herein, the term “monazite concentrate” refers to an HMS concentrate containing roughly 80% to 90% monazite. While Energy Fuels’ primary interest in acquiring the Bahia Project is the REE-bearing monazite, the Bahia Project is also expected to produce large quantities of high-quality titanium (ilmenite and rutile) and zirconium (zircon) minerals that are also in high demand. REE production is highly complementary to Energy Fuels’ existing US-leading uranium business, as monazite and other major REE-bearing minerals naturally contain uranium that will be recovered and other impurities that will be removed at the Mill before further processing into advanced high-purity REE materials.
3,000 – 10,000 MT of monazite concentrate contains roughly 1,500 – 5,000 MT of total REE oxides (“TREO“), including 300 – 1,000 MT of neodymium-praseodymium (“NdPr“) and significant commercial quantities of dysprosium (“Dy“) and terbium (“Tb“). The Company is focused on monazite at the current time, as it has superior concentrations of these four (4) critical REEs compared to other REE-bearing minerals. These REE’s are used in the powerful neodymium-iron-boron (“NdFeB“) magnets that power the most efficient electric vehicles (“EV“), along with uses in other clean energy and defense technologies. For reference, a typical EV utilizes roughly one (1) to two (2) kilograms of NdPr oxide in its drivetrain. Based on this assumption, monazite concentrate from the Bahia project alone is expected to supply enough NdPr oxide to power 150,000 to 1 million EVs per year. The uranium contained in the monazite, which is expected to be comparable to typical Colorado Plateau uranium deposits, will also be recovered at the Mill.
Update on Growing Monazite Supply Portfolio:
The acquisition of the Bahia Project is a part of the Company’s efforts to build a large and diverse book of monazite concentrate supply for its rapidly advancing REE processing business. The Company expects to procure monazite concentrates through Company-owned mines like the Bahia Project, joint ventures or other collaborations, and open market purchases, like the Company’s current arrangement with The Chemours Company (“Chemours“). The Company is currently in advanced discussions with several additional current and future monazite producers around the world to supply Energy Fuels’ initiative.
Energy Fuels, through its White Mesa Mill in Utah, is currently the only U.S. company extracting REE’s and producing commercial quantities of partially-separated mixed REE carbonate (“RE Carbonate“), which it extracts as a coproduct, along with its uranium production from monazite. This is the most advanced REE material being produced in the US today at scale, since it is a high-purity product ready for REE separation without further processing, refining or purification. The Company is currently selling all its RE Carbonate to a separation facility in Europe for further processing into advanced REE products further down the supply chain, including metals, alloys, and magnets. Though as discussed below, the Company is currently modifying and enhancing its existing circuits and facilities at the Mill with the expected ability to produce separated REE oxides (or oxalates) from these process streams starting as soon as later this year. The Company is also recovering the uranium that naturally occurs in monazite for use in carbon-free nuclear energy.
Update on Ongoing Sonic Drilling Program at the Bahia Project:
Prior to Closing on the Bahia Project, the Company commenced a sonic drilling program on the property to further define and quantify the HMS resource, particularly at depth. Under the previous owners, 3,300 vertical exploration auger holes were drilled on the property indicating significant concentrations of titanium (ilmenite and rutile), zirconium (zircon), and rare earth elements (monazite) at and near the surface. However, due to inherent limitations, historic augur drilling averaged only 5.7 meters in depth.
Utilization of a sonic drill allows for relatively undisturbed collection of sediments both above and below the water table. The limited sonic drilling completed by Energy Fuels over the past few months is confirming that the mineral bearing sands are expected to continue at depth. The Company expects to finalize Phase 1 sonic drilling at the Bahia Project this month totaling 2,250 meters. Following drilling, the Company will begin sampling and sending the material to labs for testing, including metal assay, mineralogic characterization, and process testing. The Company plans to announce Phase 1 drilling results this year and start Phase 2 drilling in Q3-2023. Once data from both drill programs are available, the Company plans to engage industry leaders to calculate an initial mineral resource estimate for use in an S-K 1300 (US) compliant Initial Assessment and an NI 43-101 (Canada) compliant Technical Report.
Update on Production of Separated NdPr Products at the White Mesa Mill & Plans for Future REE Separation:
The Company is currently separating lanthanum (“La“) and cerium (“Ce“) from its commercial RE Carbonate stream utilizing existing Mill infrastructure to produce an RE Carbonate product with higher concentrations of NdPr and “heavy” REEs. Energy Fuels is also proceeding with the modification and enhancement of its infrastructure at the Mill (“Phase 1“) to expand its “light” REE separation facilities to be capable of producing commercial quantities of separated NdPr oxide (or oxalate) by later this year or early 2024, followed by planned further enhancements to expand NdPr production capability (“Phase 2“) and to produce separated Dy, Tb and potentially other REE materials in the future (“Phase 3“) from monazite and potentially other REE-bearing process streams.
Earlier this year, the Company began construction on its “Phase 1” REE separation facilities, which includes modifications and enhancements to the solvent extraction (“SX“) circuits at the Mill. “Phase 1” is expected to have the capacity to process approximately 8,000 to 10,000 MT of monazite concentrates per year from the Mill’s process streams, producing roughly 4,000 to 5,000 MT TREO, containing roughly 800 to 1,000 MT of recoverable separated NdPr oxide (or oxalate) per year. Because Energy Fuels is utilizing existing infrastructure at the Mill, “Phase 1” capital is expected to total only about $25 million. “Phase 1” is expected to be operational later this year or early 2024, subject to receipt of sufficient monazite supply and successful construction and commissioning. If these milestones are achieved, Energy Fuels believes it will be the ‘first to the market’ among US companies with commercial quantities of separated NdPr available to EV, renewable energy, and other companies for offtake.
During “Phase 2”, Energy Fuels expects to expand its NdPr separation capabilities, with an expected capacity to process roughly 15,000 to 30,000 MT of monazite concentrates per year and expected recovery of roughly 7,500 to 15,000 MT of TREO, containing roughly 1,500 to 3,000 MT of NdPr oxide per year, or sufficient NdPr for 750,000 to 3.0 million EVs per year. “Phase 2” is also expected to add a dedicated monazite “crack-and-leach” circuit to the Mill’s existing leach circuits. Currently, the Mill is utilizing its main uranium processing circuits to process monazite and extract the REEs and uranium. A dedicated leach circuit will allow the Mill to simultaneously process monazite in the new dedicated circuit and to process other mined uranium and uranium/vanadium ores in the main circuit. The Company expects to complete “Phase 2” in 2026, subject to licensing, financing, and receipt of sufficient monazite feed.
During “Phase 3”, Energy Fuels expects to add “heavy” REE separation capabilities, including the production of Dy, Tb, and potentially other REE oxides and advanced materials. The Company will also evaluate the potential to produce La and Ce products. Monazite concentrates naturally contain higher concentrations of “heavy” REEs, including Dy and Tb, versus other REE-bearing ores, like bastnaesite, mainly due to the presence of another REE-bearing phosphate mineral called “xenotime.” “Phase 3” is expected to enable Energy Fuels to produce separated Dy, Tb, and potentially other “light” and “heavy” products. The Company also expects to have additional “heavy” REE feedstock stockpiled from “Phase 1” and “Phase 2.” During these earlier phases, the Company expects to produce NdPr oxide (or oxalate) and a samarium-plus (“Sm+“) “heavy” REE concentrate, which the Company will either sell or stockpile as feed for “Phase 3” REE separation. For reference, the monazite concentrates the Company has analyzed to date contain roughly 1% to 3% Dy and Tb, so 10,000 MT of monazite concentrate contains roughly 100 to 300 MT of Dy and Tb. The Company expects to complete “Phase 3” in 2027, subject to licensing, financing, and receipt of sufficient feed.
Mark S. Chalmers, President and CEO of Energy Fuels stated: “Energy Fuels has achieved yet another important milestone for our expanding rare earth business through our acquisition of the Bahia Project. We look forward to further defining the heavy mineral sand resource through our sonic drilling program and moving forward toward mining in the most prospective areas of the project. Using conservative development and market assumptions, we expect to receive monazite concentrates from the Bahia Project at a very low cost within the next few years. By receiving monazite feeds from a variety of sources, including mineral projects that we own, like the Bahia Project, and open market purchases, like from Chemours and others, we expect to be a low-cost US producer of advanced REE materials.
“As we continue to build our book of monazite supply through acquisitions of projects like Bahia and other transactions, we are also moving faster down the rare earth supply chain than any other U.S. company to produce more advanced rare earth materials at our White Mesa Mill in Utah. We are currently expanding our SX separation circuit at the Mill that is expected to enable us to commercially produce NdPr oxide or oxalate by later in 2023 or early 2024. NdPr is a key ingredient in permanent rare earth magnets used in EVs, wind energy, and defense technologies. Later in 2026 and 2027, we expect to increase the scale of our NdPr production and add ‘heavy’ REE separation capabilities, including the ability to produce Dy, Tb and potentially other products, subject to securing additional monazite supplies.
“Of course, uranium production remains our core business, where we continue to make excellent progress on resuming production at our mines. As the largest US producer of uranium, Energy Fuels recently sold 300,000 pounds of uranium into the newly established strategic US uranium reserve where we earned total gross proceeds of $18.5 million, and we have nuclear utility contract deliveries beginning this year. We look forward to providing markets with further updates on both our REE and uranium business segments.
“With our leading position as a uranium producer in the US, our US-leading vanadium production capability, our rapidly advancing US-leading REE production capability, and our evaluation of radioisotopes for use in emerging cancer treatment therapeutics, Energy Fuels is truly becoming a leading producer of critical minerals in the United States.”
ABOUT ENERGY FUELS
Energy Fuels is a leading US-based critical minerals company. The Company 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.
This news release contains “forward-looking information” within the meaning of applicable securities laws in the United States and Canada. Forward-looking information may relate to future events or future performance of Energy Fuels. All statements in this release, other than statements of historical facts, with respect to Energy Fuels’ objectives and goals, as well as statements with respect to its beliefs, plans, objectives, expectations, anticipations, estimates, and intentions, are forward-looking information. Specific forward-looking statements in this discussion include, but are not limited to, the following: any expectation as to the concentrations or quantities of uranium and heavy minerals, including monazite, NdPr, Dy and Tb contained in the Bahia Project; any expectation as to the potential annual supply of monazite sands from the Bahia Project to the Mill, the contained MT of TREO per year, or the number of years or decades of such potential supply; any expectation as to the number of EVs that can be powered by NdPr oxide produced from the Bahia Project; any expectation that drilling results at the Bahia Project will confirm that the mineral bearing sands continue at depth; any expectation as to the timing and results of the Company’s drilling program at the Bahia Project and the timing of any announcements relating to drilling results; any expectation that the Company will complete an S-K 1300 compliant Initial Assessment and an NI 43-101 compliant Preliminary Economic Assessment relating to the Bahia Project and the timing of any such assessments; any expectation as to the timing of mining at the Bahia Project; any expectation as to the costs to the Company of monazite concentrates from the Bahia Project and the timing of receipt of any such concentrates; any expectation as to the Company’s ability to build a large and diverse book of monazite concentrate supply; any expectation as to the Company’s ability to rapidly advance its REE processing business; any expectation that the Company will produce separated REE oxides (or oxalates) from its Mill process streams starting as early as next year; any expectation that the Company will be a low-cost US producer of advanced REE material; any expectation that the Company will complete its Phase 1, Phase 2 and/or Phase 3 separation facilities on the time frames indicated, if at all; any expectation as to the expected throughput rates, production capability, REEs to be produced and capital and operating costs of such facilities; any expectation that the Company will be the first to the market among US companies with commercial quantities of separated NdPr available to EV, renewable energy and other companies for offtake; any expectation that monazite concentrates will naturally contain higher concentrations of “heavy” REEs, including Dy and Tb versus other REE-bearing ores, like bastnaesite; any expectation as to the Company’s ability to produce radioisotopes needed for emerging cancer treatments on a commercial basis or at all; and any expectation that the Company will continue to be a leading US based uranium mining company and a leading producer of critical minerals in the United States. Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “continues”, “forecasts”, “projects”, “predicts”, “intends”, “anticipates” or “believes”, or variations of, or the negatives of, such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “should”, “might” or “will” be taken, occur or be achieved. This information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. Factors that could cause actual results to differ materially from those anticipated in these forward-looking statements include risks associated with: technical difficulties; mining or processing difficulties and upsets;licensing, permitting and regulatory delays; litigation risks; competition from others; political actions or instability in foreign countries; and market factors, including future demand for and prices realized from the sale of uranium, vanadium and REEs. Forward-looking statements contained herein are made as of the date of this news release, and Energy Fuels 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. Energy Fuels assumes no obligation to update the information in this communication, except as otherwise required by law.
SOURCE Energy Fuels Inc.
For further information: ENERGY FUELS, Curtis Moore – SVP of Marketing & Corporate Development, (303) 974-2154
The Future of Flight in a Net-Zero Carbon World: 9 Scenarios, Abundant Sustainable Biofuel
Several major airlines have pledged to reach net-zero carbon emissions by midcentury to fight climate change. It’s an ambitious goal that will require an enormous ramp-up in sustainable aviation fuels, but that alone won’t be enough, latest research shows.
The idea of jetliners running solely on fuel made from used cooking oil from restaurants or corn stalks might seem futuristic, but it’s not that far away.
Airlines are already experimenting with sustainable aviation fuels. These include biofuels made from agriculture residues, trees, corn and used cooking oil. Other fuels are synthetic, made by combining captured carbon from the air and green hydrogen, made with renewable energy. Often, they can go straight into existing aircraft fuel tanks that normally hold fossil jet fuel.
United Airlines, which has been using a blend of used oil or waste fat and fossil fuels on some flights from Los Angeles and Amsterdam, announced in February 2023 that it had formed a partnership with biofuel companies to power 50,000 flights a year between its Chicago and Denver hubs using ethanol-based sustainable aviation fuels by 2028.
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, Candelaria Bergero, Ph.D. Student in Earth System Science, University of California, Irvine, Steve DavisProfessor of Earth System Science, University of California, Irvine.
In a new study, we examined different options for aviation to reach net-zero emissions and assessed how air travel could continue without contributing to climate change.
The bottom line: Each pathway has important trade-offs and hurdles. Replacing fossil jet fuel with sustainable aviation fuels will be crucial, but the industry will still need to invest in direct-air carbon capture and storage to offset emissions that can’t be cut.
Scenarios for the Future
Before the pandemic, in 2019, aviation accounted for about 3.1% of total global CO₂ emissions from fossil fuel combustion, and the number of passenger miles traveled each year was rising. If aviation emissions were a country, that would make it the sixth-largest emitter, closely following Japan.
In addition to releasing carbon emissions, burning jet fuel produces soot and water vapor, known as contrails, that contribute to warming, and these are not avoided by switching to sustainable aviation fuels
Aviation is also one of the hardest-to-decarbonize sectors of the economy. Small electric and hydrogen-powered planes are being developed, but long-haul flights with lots of passengers are likely decades away.
We developed and analyzed nine scenarios spanning a range of projected passenger and freight demand, energy intensity and carbon intensity of aviation to explore how the industry might get to net-zero emissions by 2050.
Nine scenarios illustrate how much carbon offsets would be required to reach net-zero emissions, depending on choices made about demand and energy and carbon intensity. Each starts with 2021’s emissions (1.2 gigatons of carbon dioxide equivalent). With rising demand and no improvement in carbon intensity, a large amount of carbon capture will be necessary. Less fossil fuel use and slower demand growth reduce offset needs. Candelaria Bergero
We found that as much as 19.8 exajoules of sustainable aviation fuels could be needed for the entire sector to reach net-zero CO₂ emissions. With other efficiency improvements, that could be reduced to as little as 3 exajoules. To put that into context, 3 exajoules is almost equivalent to all biofuels produced in 2019 and far surpasses the 0.005 exajoules of bio-based jet fuel produced in 2019. An exajoule is a measure of energy.
Flying less and improving airplanes’ energy efficiency, such as using more efficient “glide” landings that allow airlines to approach the airport with engines at near idle, can help reduce the amount of fuel needed. But even in our rosiest scenarios – where demand grows at 1% per year, compared to the historical average of 4% per year, and energy efficiency improves by 4% per year rather than 1% – aviation would still need about 3 exajoules of sustainable aviation fuels.
Why Offsets are Still Necessary
A rapid expansion in biofuel sustainable aviation fuels is easier said than done. It could require as much as 1.2 million square miles (300 million hectares) of dedicated land to grow crops to turn into fuel – roughly 19% of global cropland today.
Another challenge is cost. The global average price of fossil jet fuel is about about US$3 per gallon ($0.80 per liter), while the cost to produce bio-based jet fuels is often twice as much. The cheapest, HEFA, which uses fats, oils and greases, ranges in cost from $2.95 to $8.67 per gallon ($0.78 to $2.29 per liter), but it depends on the availability of waste oil.
Fischer-Tropsch biofuels, produced by a chemical reaction that converts carbon monoxide and hydrogen into liquid hydrocarbons, range from $3.79 to $8.71 per gallon ($1 to $2.30 per liter). And synthetic fuels are from $4.92 to $17.79 per gallon ($1.30 to $4.70 per liter).
Realistically, reaching net-zero emissions will likely also rely on carbon dioxide removal.
In a future with similar airline use as today, as much as 3.4 gigatons of carbon dioxide would have to be captured from the air and locked away – pumped underground, for example – for aviation to reach net-zero. That could cost trillions of dollars.
For these offsets to be effective, the carbon removal would also have to follow a robust eligibility criteria and be effectively permanent. This is not happening today in airline offsetting programs, where airlines are mostly buying cheap, nonpermanent offsets, such as those involving forest conservation and management projects.
Some caveats apply to our findings, which could increase the need for offsets even more.
Our assessment assumes sustainable aviation fuels to be net-zero carbon emissions. However, the feedstocks for these fuels currently have life-cycle emissions, including from fertilizer, farming and transportation. The American Society for Testing Materials also currently has a maximum blend limit: up to 50% sustainable fuels can be blended into conventional jet fuel for aviation in the U.S., though airlines have been testing 100% blends in Europe.
How to Overcome the Final Hurdles
To meet the climate goals the world has set, emissions in all sectors must decrease – including aviation.
While reductions in demand would help reduce reliance on sustainable aviation fuels, it’s more likely that more and more people will fly in the future, as more people become wealthier. Efficiency improvements will help decrease the amount of energy needed to power aviation, but it won’t eliminate it.
Scaling up sustainable aviation fuel production could decrease its costs. Quotas, such as those introduced in the European Union’s “Fit for 55” plan, subsidies and tax credits, like those in the U.S. Inflation Reduction Act signed in 2022, and a carbon tax or other price on carbon, can all help achieve this.
Additionally, given the role that capturing carbon from the atmosphere will play in achieving net-zero emissions, a more robust accounting system is needed internationally to ensure that the offsets are compensating for aviation’s non-CO₂ impacts. If these hurdles are overcome, the aviation sector could achieve net-zero emissions by 2050.
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, CFA, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Production running ahead of our modeling. January sales volumes averaged 2,754 boepd ahead of our 2023-1Q quarterly estimate of 2,710 boepd. This represents a 1% increase over 2022-4Q volumes and a 10% increase over 2022-1Q volumes. The year-over-year increase reflects an increase in processing volumes last summer to 3,000 boepd. Alvopetro will be bringing two new wells to production in the next few months which could further increase sales.
Prices rise again under semi-annual price redetermination. Realized natural gas prices will increase to an expected level of $12.40/mcf (includes price redetermination and various adjustments). Redeterminations are based on a variety of factors including oil prices, gas prices, and exchange rates subject to price adjustment floors and ceilings that rise each period. New prices reflect a 3.6% increase from the previous determination. As we have discussed in the past, current redeterminations would be as high as $15/mcf absent a ceiling and will most likely continue to rise each period even if energy prices decline.
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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, CFA, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Largo is a play on growing vanadium demand. We believe Largo, Inc. offers investors an attractive way to play an expected growth in the demand for vanadium due to its use in large-scale energy storage. Largo is the largest producer of vanadium outside of China and Russia. The high vanadium concentration of is Maracas Menchen Mine in Brazil makes Largo one of the lowest-cost producers of vanadium in the world.
Largo is involved with vanadium batteries. In addition to mining vanadium, Largo has formed a division to manufacture and install Vanadium Redox Flow Batteries (VRFB). VRFBs have key advantages over other battery types in terms of scalability, cost, and safety making them ideal for grid operations. VRFB can store energy for months and have operating duration periods of 6-10 hours. Vanadium used in VRFBs has little degradation and can be recovered and reused upon recycling.
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*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.
CALGARY, AB, Feb. 6, 2023 /CNW/ – Alvopetro Energy Ltd. (TSXV: ALV) (OTCQX: ALVOF) announces January 2023 sales volumes, our February 1, 2023 natural gas price redetermination, our 2023 capital plan and an operational update.
President and CEO, Corey Ruttan commented:
“Building on our record year in 2022 we are looking forward to our 2023 capital plan. Our focus this year is on adding production and reserves from our lower risk development opportunities. We have made the key infrastructure investments necessary to realize the full potential from our Murucututu natural gas project. This project has significant reserves and resources and our goal is to unlock this potential with a multi-year development plan starting this year.”
January 2023 sales volumes
January sales volumes averaged 2,754 boepd, including natural gas sales of 15.6 MMcfpd, associated natural gas liquids sales (condensate) of 141 bopd, and 5 bopd of oil sales, based on field estimates, a 1% increase from our Q4 average daily volumes.
Operational Update and 2023 Capital Plans
Murucututu (100% Alvopetro)
On our Murucututu project, we expect to commence the stimulation on our 197(1) well later this quarter. We have already completed the work to tie-in this well to our 183(1) facility and expect to commence production in the second quarter. We also plan to drill two “fit-for-purpose” Gomo development wells in 2023. One of these locations has additional uphole exploration potential in the Caruaçu and Marfim Formations. Total capital expenditures of $16 million are budgeted for Murucututu in 2023.
Caburé (49.1% Alvopetro)
Our 2023 capital budget includes an expansion of the unit facilities and drilling two additional development wells. Total expenditures of $3 million are budgeted for Alvopetro’s share of 2023 capital expenditures on our Caburé project.
Bom Lugar (100% Alvopetro)
In 2023, we plan to drill up to two development wells on our Bom Lugar oil field, targeting the Caruaçu Formation with additional potential in the deeper Gomo and Agua Grande Formations. Capital expenditures of up to $11 million are budgeted in 2023 for Bom Lugar, including the development wells and facility upgrades.
Mãe-da-lua (100% Alvopetro)
2023 capital expenditures include $0.5 million at our Mãe-da-lua field where we plan to complete a stimulation of our existing well to improve oil recovery rates.
Exploration (100% Alvopetro)
In 2022, Alvopetro drilled two exploration prospects, 182-C, and 183-B. We encountered thick, hydrocarbon saturated zones in the Sergi Formation which have demonstrated low permeability during testing operations. Alvopetro continues to evaluate alternatives to enhance permeability in the Sergi Formation in both wells and in the Agua Grande Formation of the 183-B1 well. We are evaluating alternatives to remediate possible permeability impacts from near wellbore damage. This work is expected to start with the 182-C2 well later this quarter. Capital costs of $0.4 million are currently budgeted on these projects in 2023, including final testing costs on 182-C2 incurred in January. Future capital expenditures will depend on these initial results.
Semi-Annual Natural Gas Price Redetermination
Effective February 1, 2023, our natural gas price under our long-term gas sales agreement with Bahiagás has been adjusted to BRL2.00/m3 or $11.88/Mcf (based on our average heat content to date and the January 31, 2023 BRL/USD foreign exchange rate of 5.10). This price represents an increase of 3.6% from our prior contracted price and will be effective for natural gas sales from February 1 to July 31, 2023. Including recently approved and enhanced sales tax credits, our realized gas price, net of sales taxes, is expected to be $12.40/Mcf (based on our average heat content to date and the January 31, 2023 BRL/USD foreign exchange rate of 5.10).
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
BRL
=
Brazilian real
m3
=
cubic metre
Mcf
=
thousand cubic feet
MMcf
=
million cubic feet
MMcfpd
=
million cubic feet per day
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 plans relating to the Company’s operational activities, proposed exploration and development activities and the timing for such activities, capital spending levels and future capital costs, and the expected natural gas price, gas sales and gas deliveries under the Company’s long-term gas sales agreement. 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 timing of regulatory licenses and approvals, equipment availability, the success of future drilling, completion, testing, recompletion and development activities, the performance of producing wells and reservoirs, well development and operating performance, 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, foreign exchange rates, 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.
CALGARY AB, Feb. 1, 2023 /CNW/ – InPlay Oil Corp. (TSX: IPO) (OTCQX: IPOOF) (“InPlay” or the “Company”) is pleased to confirm that its Board of Directors has declared a monthly cash dividend of $0.015 per common share payable on February 28, 2023, to shareholders of record at the close of business on February 15, 2023. The monthly cash dividend is expected to be designated as an “eligible dividend” for Canadian federal and provincial income tax purposes.
About InPlay Oil Corp.
InPlay is a junior oil and gas exploration and production company with operations in Alberta focused on light oil production. The company operates long-lived, low-decline properties with drilling development and enhanced oil recovery potential as well as undeveloped lands with exploration possibilities. The common shares of InPlay trade on the Toronto Stock Exchange under the symbol IPO and the OTCQX Exchange under the symbol IPOOF.
SOURCE InPlay Oil Corp.
For further information: Doug Bartole, President and Chief Executive Officer, InPlay Oil Corp., Telephone: (587) 955-0632; Darren Dittmer, Chief Financial Officer, InPlay Oil Corp., Telephone: (587) 955-0634
Will ESG Investing be Able to Recycle Itself in 2023?
Investment trends run in cycles. As a new trend is recognized, it attracts new money, which drives up prices, until there isn’t as much additional money left to keep the trend going strong. At some point, investors may feel there is a more profitable use for their capital, and the old trend then falls out of favor. Over the decades, sustainable and social investing have had several up cycles, followed by a hiatus and then a new incarnation. Where is ESG investing in its cycle in 2023?
Background
Environmental, social, and governance (ESG) holds as an underlying promise that companies and those that invest in them can do well by doing good. Just a couple of years back, investors trillions of dollars into ESG strategies. This had the effect of causing many businesses to alter their business model in ways that would conform to an unofficial ESG designation(s).
Investment companies aimed to fill the demand by creating new ESG funds, at the same time the business of creating ESG profile rankings also grew. Professionally managed assets with ESG mandates surged to an astronomical $46 trillion globally in 2021. According to Deloitte’s Center for Financial Services, assets, ESG funds represented nearly 40% of all assets under management.
The first couple of years this decade were riddled with black swan events, investment assets swelled on many fronts. Investors in ESG have recently stepped back and moved the most money out of U.S. sustainable funds in more than five years (4Q). The fund industry experienced nearly $6.2 billion pulled from professionally managed funds catering to environmental, social, and governance strategies. As compared to the trillions in the funds, this is not overly significant. What is significant is the reversal of what had been a strong trend of inflows.
Sustainable funds overall netted more than $3 billion in positive flows for all of 2022 – traditional U.S. funds experienced more than $370 billion in withdrawals during the year. A lower percentage but still significant as it was the first calendar year of net outflows since Morningstar began tracking data in 1983.
According to a new report from Morningstar, flows of money into U.S. sustainable mutual funds and ETFs has declined since its record high in the first quarter of 2021. The withdrawal of money comes as many companies are improving their ESG scores. The decline in 4Q 2022 came as a myriad of factors soured investors on many market sectors.
Political Winds Changing
But stock market sentiment may only be part of the story. There are louder and louder voices that are questioning the purity of this newer incarnation of social investing. They ask if it provide for what is good and best overall? There is even some confusion by investors that remember the older versions of social and environmental investing that specifically excluded things like nuclear power. Today many ESG scores view carbonless nuclear generation as clean.
Where there is money, there is also politics. This is part of what originally helped the trend pick up steam. Now opposing political voices are causing some second looks at the overall benefits. The most recent examples include the person who moved the electric vehicle (EV) movement out so far into the spotlight that the car company he founded is the most valuable in the world (market cap). Elon Musk made one of his negative ESG comments as a tweet responding to self-described “Hero of the Environment” and author, Michael Shellenberger.
Image: Twitter (@elonmusk)
Less political, but perhaps more important, Federal Reserve Chair Jerome Powell made his official position clear during a conference titled Central Bank Independence and the Mandate—Evolving Views. Standing before an international audience in Stockholm, Sweden, Powell said, “we resist the temptation to broaden our scope to address other important social issues of the day. Taking on new goals, however worthy, without a clear statutory mandate would undermine the case for our independence.”
Sustainable funds lagged behind the broader market in performance. Remember, there was an increasing supply of names that were attaining ESG status. Also their lack of exposure to the top-performing oil and gas sector and its 66% gain during the year hurt performance.
The drag in the last quarter of 2022 was even more pronounced as it was the first period in more than three years that U.S. sustainable funds had a lower organic growth rate than the total U.S. fund market. During the fourth quarter, sustainable funds shrank by 2.2% compared with an 0.8% shrinkage in the overall U.S. landscape.
Morningstar’s sustainable fund universe encompasses mutual funds and ETFs “that, by prospectus or other regulatory filings, claim to focus on sustainability; impact; or environmental, social, and governance factors.”
Take Away
Last year while the overall markets were gloomier, ESG investors slowed and then reversed their piling into ESG funds. These funds had attracted 40% of fund assets, so it is no surprise they paused. However last quarter was the first decline since 1983. Part of the issue is the normal cyclicality of investment trends. Make no mistake; sustainable investing is not dying, but it suffers from a lack of clarity as to how companies are scored, and who is doing the scoring.
Investors that wish to keep the entire universe of opportunities open to their portfolios can still invest in stocks that suit their appetite for many factors, including environmental, social, or corporate governance. A little digging through analyst research reports ought to provide enough information to steer one clear of companies individuals would rather not be part of, and those they feel especially good about owning.
