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This profile is part of a investor education campaign. The profile provides detailed information which was sourced and approved by Energy Fuels Inc. in order to help investors make better investment decisions. The Company’s support of Investing News Network ensures we can continue to bring you unbiased, independent news and information.

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Energy Fuels – America’s Premier Uranium Producer

Energy Fuels – America’s Premier Uranium Producer

Overview

Energy Fuels Inc. (TSX:EFR,NYSEMKT:UUUU) is a leading US-based uranium producer.  In 2016, Energy Fuels was the second largest supplier of uranium within the United States, and according to published company guidance, Energy Fuels is expected to become the #1 uranium producer in the United States in 2017.  Energy Fuels also holds the largest in-ground uranium resource portfolio of any producer or near-producer in the United States. The United States, the world’s leading producer of nuclear energy and uranium consumer, currently obtains about 94 percent of its annual uranium requirements from foreign sources. The nation is home to 99 commercial nuclear reactors with four more under construction.

Energy Fuels is the only uranium producer with both conventional production and in situ uranium recovery (“ISR”) in the United States. With the only conventional uranium mill operating in the country and a large portfolio of high-quality conventional and ISR uranium properties, Energy Fuels is the leading uranium mining company in the U.S., in terms of current production, scalability, and resource portfolio. Energy Fuels offers excellent leverage to rising uranium prices and is well- positioned to capitalize on the growing need for more domestic and global uranium supplies.

Energy Fuels’ response to lower prices has been to consolidate the U.S. uranium space, acquiring a 100 percent stake in high-value assets while liquidating. The company also continues to permit and develop its quality portfolio of low-cost producing and near-producing uranium projects. As uranium prices rise, Energy Fuels plans to swiftly scale up production at its low-cost projects, including its currently-producing Nichols Ranch ISR Project in Wyoming, its fully-permitted and constructed Alta Mesa ISR Project in Texas, its fully-permitted and nearly developed Canyon Mine in Arizona, and Canyon Mine ore and alternate feed materials at its White Mesa Mill in Utah.  The Company also expects to earn additional revenues through toll processing, production of other valuable minerals (including vanadium and copper), and other business opportunities at its White Mesa Mill.  Longer-term, the Company expects to produce uranium from large-scale conventional projects including the fully-permitted Sheep Mountain Project (, Wyoming), the advanced-stage ; and Roca Honda Project (, New Mexico), and the Bullfrog Project (Utah).  The Company also has the potential to produce copper from its Canyon Mine in Arizona and vanadium from several of its mines currently on standby in Utah and Colorado.

In a March 2017 letter to shareholders, Energy Fuels President and CEO Stephen Antony stated, “While I can’t say whether the recent upward price move in uranium is the beginning of the ‘next uranium bull market’, I confidently believe there is considerable upside for proven producers of uranium with scalability and high-quality assets like Energy Fuels.”

 

Investment Highlights

  • Expected to be the largest uranium producer in the United States in 2017..
  • Currently reducing production in the current low-price environment, in order to conserve cash and valuable in-ground resources, thereby increasing leverage to improving uranium prices.
  • The White Mesa Mill: The only conventional uranium mill operating in the United States (over 8 million pounds of annual capacity), located in Utah.
  • The Nichols Ranch ISR Project: Existing ISR production in Wyoming, licensed to significantly increase output (2 million pounds of annual capacity).
  • The Alta Mesa ISR Project: Significant existing ISR production on standby in Texas (1.5 million pounds of annual capacity)..
  • Production of 1,015,000 pounds in 2016 with an expected 800675,000 pounds of U3O8   in 2017.
  • Current & Near-Term U3O8 Production: Nichols Ranch, Alta Mesa, Canyon Mine, Alternate Feed Materials at the White Mesa Mill.
  • Significant Future Scalability: three Three large-scale uranium projects with over 50 million pounds of combined measured and indicated resources at the Sheep Mountain Project (fully-permitted), the Roca Honda Project (advanced-stage permitting), and the Bullfrog Project (pre-permitting stage).
  • Other Conventional Mines on Standby that Can Resume Production in Improving Markets:  the La Sal Complex, the Daneros Mine, the Whirlwind Mine, and the Tony M Mine.

 

 Ongoing Conventional Uranium Production: The White Mesa Mill

Energy Fuels – America’s Premier Uranium Producer

Energy Fuels’ White Mesa Mill is truly a strategic asset, as it provides the Company with a multitude of business opportunities, including the production of uranium.  The facility is the only fully-licensed and operating conventional uranium mill in the United States, and one of only three in North America. White Mesa is strategically located in Blanding, Utah, central to the highest-grade uranium mines in the United States. Since 2010, the mill has produced about six million pounds of uranium, and it is expected to produce 375,000 pounds in 2017, as the Company cuts production in response to recent low prices. It is also capable of producing a high-purity vanadium product, and the Company is evaluating the potential to recover copper.  Finally, it is also ideally positioned to generate revenue through 3rd party toll milling, processing low-cost alternate feed materials, and participating in the cleanup of historic uranium mines in the region.

Although, the White Mesa Mill will only produce about 375,000 lbs. in 2017, it has a licensed capacity of over 8 million lbs. of U3O8  per year..

Ongoing In Situ Uranium Production: The Nichols Ranch ISR Project

Energy Fuels owns and operates the Nichols Ranch ISR Project, located in the prolific Powder River Basin of Wyoming.  Energy Fuels acquired this key production asset in 2015, through its acquisition of Uranerz Energy Corporation. In 2016, the Company produced about 300,000 pounds of uranium at Nichols Ranch, and in 2017, the Company expects to produce about 3050,000 pounds of U3O8. The Company currently has 9 wellfields in operation, with an additional 34 wellfields permitted for production as market conditions warrant, ensuring a long-term production profile. While today’s prices dictate reduced levels of production, tThe facility has a licensed capacity of 2 million pounds of uranium per year.

 

In Situ Uranium Production on Standby: Alta Mesa ISR Project

In June 2016, Energy Fuels completed the acquisition of Mesteña Uranium, and its flagship Alta Mesa ISR project, located in South Texas. Alta Mesa is a well-known, proven low-cost uranium producer within the U.  S. nuclear industry. Between 2005 and 2013, the facility produced about 4.6 million pounds of uranium, including over 1 million pounds in two of those years. The project is currently on care and maintenance. As uranium prices rise above about the $40 per pound level on a sustained basis, Energy Fuels expects to resume production at this important asset.

According to an August 2016 NI 43-101 Technical Report, Alta Mesa contains an estimated 1.6 million tons of measured and indicated mineral resources with an average grade of 0.11 percent containing 3.6 million lbs. of uranium, plus 7.0 million tons of inferred mineral resources with an average grade of 0.12 percent containing 16.8 million pounds of uranium. In addition, the technical report identified further areas for exploration, with an average grade of 0.08 to 0.123 percent U3O8 containing 4.1 to 6.6 million pounds of uranium.  The total project area is over 200,000 acres providing the Company with a long-term, low-cost uranium production profile from this asset.

The Nichols Ranch ISR project in Wyoming, the Alta Mesa ISR Project in Texas, and the White Mesa Mill in Utah gives Energy Fuels diversified, low-cost ISR and conventional uranium production from three production centers. The Company has four uranium sales contracts extending to 2020, with over a half million pounds of U3O8 under contract in 2017.  Energy Fuels expects to deliver 520,000 pounds of uranium in the fiscal-year 2017 under its existing contracts. Three of those contracts are at a significant premium to current spot prices. A fourth will be priced based on the average spot price per pound of uranium five weeks prior to the delivery date.

Acquiring Nichols Ranch and Alta Mesa deepened the value of Energy Fuels’ already impressive development pipeline which includes the largest NI 43-101 resource base among producers in the United States. These ISR acquisitions make the company the only integrated mining company with conventional and ISR uranium production in the United States.
“Energy Fuels is clearly emerging as a leading integrated producer of uranium in the United States.  We now have low-cost ISR and conventional uranium production in our portfolio, the largest NI 43-101 compliant in-ground uranium resource in the U.S. among producers, and the ability to significantly increase uranium production in the future as uranium prices rise,” explained Antony.

Canyon Mine: In Development

Canyon Mine: Fully-Permitted Mine In Development

Energy Fuels towns the fully-permitted Canyon mine in northern Arizona.  This is a very high-grade breccia pipe uranium mine within trucking distance of the Company’s White Mesa Mill, where the ore will be processed in the future.  The Company believes this project has costs in-line with the lowest cost, “tier one” conventional uranium mines operating in the World today.

The breccia deposits of northern Arizona contain the highest grades of uranium found in the United States, and are among the highest grades in the world outside Canada’s Athabasca Basin.

Existing surface development at Canyon includes a headframe, evaporation pond, hoist, maintenance facility and environmental controls. In early 2017, Energy Fuels stated it had built all surface developments and completed its 1,470-foot production shaft. The company also completed underground drilling to define and expand the deposit.  

According to a 2012 technical report, inferred mineral resources at the Canyon mine are estimated to include 1,629,000 pounds of U3O8 grading 0.98 percent U3O8  contained in 83,000 tons. However, the Company believes the current underground drilling program will significantly expand and upgrade the in-place uranium resources at this low-cost project.   Chemical assay results disclosed to date have identified large zones of previously undiscovered high-grade uranium mineralization, expected to be more substantial than estimated in the original 2012 report, including 6-feet of mineralization averaging 17% U3O8 and 46-feet of mineralization averaging 1.37% U3O8.. In addition, chemical assays are confirmed potentially lucrative high-grade copper mineralization including 645-feet averaging about 10% Cu. The company plans to release another technical report in 2017 that will reflect the new findings.

Scalable Production

In addition to the aforementioned projects, Energy Fuels has successfully amassed a diverse portfolio of additional production-ready and late-development stage uranium properties giving the company significant future production scalability.

Roca Honda — New Mexico

The Roca Honda project was acquired by Energy Fuels as part of its acquisition of Strathmore Minerals in 2013. The project is located in northwest New Mexico within trucking distance of Energy Fuels’ White Mesa Mill.

Roca Honda is one of the largest and highest grade development-stage uranium projects in the United States. The 2015 NI 43-101 Preliminary Economic Assessment (‘PEA’) and Technical Report on the project shows 1.51 million tons of measured and indicated resources with an average grade of 0.48 percent U3O8 containing 14.56 million pounds of U3O8  as well as an additional 1.20 million tons of inferred mineral resources with an average grade of 0.47 percent U3O8 containing 11.21 million pounds of U3O8. A December 2016 PEA revised cost of production to US$33.27 a pound, approximately two dollars less than initially estimated (US$35). Capital costs comprised of upfront capital and operating capital, mine closure and reclamation are expected to total US$13.88 per pound of uranium.  The PEA further anticipates average production of 2.7 million pounds of uranium per year over a mine-life of 9-years.

Energy Fuels – America’s Premier Uranium Producer

Roca Honda areas in red; areas with hatch marks are what Energy Fuels is acquiring and the unhatched red areas are existing projects

On August 3, 2015, Energy Fuels announced that it had completed the acquisition of a highly strategic 4,580-acre land position adjacent to its existing Roca Honda holdings. This is a major step in consolidating the properties adjacent to General Atomics’ Mountain Taylor uranium mine. The properties acquired include significant historical resources and a historic mine shaft constructed in the early 1980’s by Kerr-McGee to within 200 feet of the ore body. The acquired properties have the potential to significantly enhance the project economics of Roca Honda.

In May 2016, Energy Fuels announced acquiring a 100 percent interest in the Roca Honda project. As a result of the buyout, Energy Fuels has increased its portfolio size by 6.8 percent measured and  indicated, and 12.4 percent inferred resources. Roca Honda is currently in an advanced stage of permitting which is expected to be completed in 2017.

Sheep Mountain — Wyoming

The Sheep Mountain project is a fully-permitted conventional uranium mine located approximately eight miles south of Jeffrey City, Wyoming on a land package totaling 4,475 acres. The project includes the Congo Pit, a proposed open pit development, and the existing Sheep Mountain Underground mine. The Sheep Mountain mine is a formerly producing conventional uranium mine with potential to become a long-term uranium production center at higher uranium prices. The project has a Resource Estimate of approximately 12.9 million tons of measured and indicated resources at an average grade of 0.12 percent U3O8 (30.3 million lbs. U3O8), including 18.4 million pounds of Reserves.

Energy Fuels receiving its Final Environmental Impact Statement (EIS) and Record of Decision (ROD) for the Sheep Mountain project In January 2017. This was last major government approval required to begin mining at this site.

Energy Fuels plans to redevelop Sheep Mountain using both conventional underground and open pit mining methods with uranium produced in a new heap leach extraction process. The company’s current plans specify a mine life of 15 years, comprising 11 years of open pit operation and an additional 5 years allotted for mine closure and reclamation. The PFS estimates the Sheep Mountain project can produce up to 1.5 million pounds of uranium per year over its 15-year lifespan.

Henry Mountains — Utah

The Henry Mountains complex is a contiguous group of uranium properties which includes the Tony M/Southwest deposit, the Copper Bench/Indian Bench deposit, and the Tony M mine. The 2012 NI 43-101 Technical Report on the Complex shows approximately 2.5 million tons of indicated resources with an average grade of 0.27 percent U3O8  (12.8 million pounds U3O8) and approximately 1.61 million tons of Inferred resources with an average grade of 0.25 percent U3O8 (8.08 million pounds U3O8).

The fully-permitted and developed Tony M portion of the Henry Mountains Complex is currently on standby. The high-grade Bullfrog deposit is currently in preparation for permitting. This project, which the Company estimates could produce up to 1.5 million pounds of uranium per year, is in close proximity to the company’s White Mesa Mill – less than 100 miles trucking distance.

La Sal— Utah

The fully-permitted and developed La Sal Complex) of mines was in production as recently as late 2012. The project remains on standby as of early 2017. The La Sal Complex includes four uranium/vanadium mines (La Sal, Beaver, Energy Queen and Pandora) connected by an extensive network of underground workings. The complex is located in the La Sal Mining District along the La Sal Trend which runs east/west for about 20 miles. Ore is processed at the company’s nearby White Mesa Mill.

Daneros — Utah

The fully-permitted and developed Daneros mine was in production as recently as October 2012, at which point it was placed on standby. It remains on standby as of early 2017. The Daneros mine is located in Utah’s White Canyon Mining District from which historic production totaled more than 11 million pounds of U3O8. Daneros contains approximately 156,600 tons of inferred resources with an average grade of 0.21 percent containing 661,000 pounds of U3O8 (December 31, 2013). Ore is processed at the company’s nearby White Mesa Mill.

Wate – Arizona

The Wate project is a nearly-permitted high-grade breccia pipe deposit located in Northern Arizona. Energy Fuels now holds a 100-percent interest in the Wate following an acquisition transaction completed in November 2015.

According to a 2015 Technical Report, the Wate project contains approximately 1.12 million pounds of uranium contained in approximately 70,000 tons of inferred mineral resources with an average grade of 0.79 percent U3O8.

The Wate project, which sits on Arizona State Land, is in an advanced stage of permitting. A mineral lease (which includes a mining permit) is expected to be issued later in 2017. Once the mineral lease is granted, Energy Fuels expects to move forward to acquire the additional environmental permits and other approvals required to commence development and mining.

Management

Stephen P. Antony – President and Chief Executive Officer

Over the last 30-plus, years Stephen Antony has held senior positions in both the technical and managerial sectors within the mining industry. In the mid-1980’s he entered the uranium business with Mobil Oil’s Mining and Mineral group, during which time he developed the reclamation plan for Mobil’s El Mesquite ISL operation in south Texas. He joined Energy Fuels Nuclear (EFN) in 1986 as the company was growing to become the largest U3O8 producer in the US, peaking at more than five million pounds annually. Antony served as director of Technical Services for the company where he authored many of the feasibility studies for the expansion of EFN’s highly successful Breccia Pipe Mine projects in the Arizona Strip.

Subsequent to his employment with EFN,  Antony held a brief position with Power Resources (PRI) as Vice President of Business Development. He then consulted to Cameco Corp. on due diligence prior to their acquisition of PRI, which Cameco undertook as part of their strategy to become a significant uranium producer in the United States. Antony was most recently Chief Operating Officer of Energy Fuels, responsible for the daily operations of the Company, including all aspects of uranium property exploration, ore production and mill processing. He was appointed President and CEO on April 1, 2010. He is a registered professional engineer, is a graduate of the Colorado School of Mines, and holds a Masters of Business Administration (MBA) from the University of Denver.

Harold R. Roberts – Executive Vice President of Conventional Operations

Harold Roberts He was previously the Executive Vice President – U.S. Operations for Denison Mines Corp. Prior to his employment with Denison, Roberts was the President of Energy Fuels Nuclear. Throughout his career he has held various positions related to operations oversight, project development, and permitting of mining operations. Roberts obtained his Bachelor of Science degree in Civil Engineering from Montana State University in 1975, and is a Registered Professional Engineer in several western States.

Paul Goranson – Executive Vice President of ISR Operations

Paul Goranson has more than 28 years of mining, processing and regulatory experience in the uranium extraction industry that includes both conventional and ISR mining. Prior to the acquisition by Energy Fuels of Uranerz Energy Corporation, Goranson served as President, Chief Operating Officer and Director for Uranerz, where he was responsible for operations of the Nichols Ranch ISR Uranium Project. Prior to Uranerz, Goranson was President of Cameco Resources, a wholly-owned U.S. subsidiary of Cameco Corporation, which is one of the world’s largest uranium mining companies. He was responsible for executing the “Double U” growth strategy for Cameco’s U.S. operations, including developing production expansion projects such as the North Butte ISR uranium recovery facility and the refurbishment of the Highland Central Processing Plant.

Prior to Cameco Resources, Goranson was Vice President of Mestena Uranium where he led the construction, startup and operation of the Alta Mesa project that achieved over one million pounds of uranium production per year under his stewardship. Prior to Mestena, he was the manager for radiation safety, regulatory compliance and licensing with Rio Algom Mining, a division of BHP Billiton. Goranson is a registered Professional Engineer, and he holds a Master of Science in Environmental Engineering along with a Bachelor of Science in Natural Gas Engineering.

David C. Frydenlund – Senior Vice President Regulatory Affairs, General Counsel and Corporate Secretary

David Frydenlund’s expertise extends to NRC, EPA, State and Federal regulatory and environmental laws and regulations. From 1997 to July 2012, Frydenlund was Vice President Regulatory Affairs, Counsel and Corporate Secretary of Denison Mines Corp., and its predecessor International Uranium Corporation (IUC), and was also a director of IUC from 1997 to 2006. From 1996 to 1997, he was a Vice President of the Lundin Group of international public mining and oil and gas companies, and prior thereto was a partner with the Vancouver law firm of Ladner Downs (now Borden Ladner Gervais) where his practice focused on corporate, securities and international mining transactions law. Frydenlund was also an adjunct professor, corporate law, at the University of British Columbia Faculty of Law from 1990-1994. He holds a bachelor’s degree from Simon Fraser University, a master’s degree from the University of Chicago and a law degree from the University of Toronto.

Mark Chalmers – Chief Operating Officer

Mr. Chalmers brings an extensive background in both the U.S. and global uranium mining and processing industries to Energy Fuels.  From 2011 to 2015, Mr. Chalmers served as Executive General Manager of Production for Paladin Energy Ltd., a uranium producer with assets in Australia and Africa, including the Langer Heinrich and Kayelekera mines, where he oversaw sustained, significant increases in production while reducing operating costs.  He also possesses extensive experience in ISR uranium production, including management of the Beverley Uranium Mine owned by General Atomics (Australia), and the Highland mine owned by Cameco Corporation (USA).  Mr. Chalmers has also consulted to several of the largest players in the uranium supply sector, including BHP Billiton, Rio Tinto, and Marubeni, and currently serves as the Chair of the Australian Uranium Council, a position he has held since 2007.

 

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