Energy Fuels Inc. (TSX:EFR) announced its financial results for its 2015 first quarter, which included a net loss of $2.36 million, or $0.12 per share, compared to $6.34 in Q1 2014. The company also provided an outlook for 2015.
Financial and operational highlights for Q1 2015:
- $7.60 million of total revenue was realized by the Company.
- Gross Profit of $3.65 million from mining and milling operations was realized by the Company, representing a gross profit margin of approximately 48%.
- A net loss of $2.36 million was realized by the Company.
- 116,667 pounds of U3O8 sales were completed by the Company at an average realized price of $59.95 per pound, pursuant to an existing term contract.
- 197,116 pounds of U3O8 were produced from the Company’s White Mesa Mill of which 113,881 pounds were from alternate feed materials and other processing, and 25,162 pounds were from the Company’s Arizona mines. 58,073 pounds were produced under a processing arrangement for the account of a 3rd party.
- At March 31, 2015, the Company had $35.20 million of working capital, including cash and cash equivalents of $6.54 million and 816,408 pounds of uranium concentrate inventory. The Company’s contractual deliveries and related sales are based on delivery schedules which can vary from quarter to quarter. As discussed below, the Company expects to sell an additional 683,333 pounds of U3O8 during the remainder of the year under existing contracts which will generate significant cash for the Company’s operational needs. The Company believes it has sufficient cash and resources to carry out its business plan beyond calendar year 2015.
- On January 5, 2015, Energy Fuels announced the execution of a definitive agreement (“DA”) pursuant to which, upon receipt of shareholder and regulatory approvals, the Company would acquire all of the issued and outstanding shares of common stock of Uranerz Energy Corporation. Under the terms of the DA, shareholders of Uranerz would receive 0.255 common shares of Energy Fuels for each share of Uranerz common stock held
- On February 6, 2015, the Company announced that it is preparing to resume development at its high-grade Canyon mine in Arizona. The Company expects to transition mining personnel from the currently-producing Pinenut mine to the Canyon mine during Q2-2015, at which point the Company expects the economic resources at the Pinenut mine to be depleted.
- On February 17, 2015, the Company announced that it had acquired a 50% interest in the high-grade Wate uranium deposit (the “Wate Project”) from VANE Minerals (US) LLC (“VANE”). The Wate Project is held in the Wate Mining Company, LLC joint venture (“LLC”). The other 50% of the LLC is held by Uranium One Americas, Inc. The Wate Project is a high-grade uranium deposit located in Arizona that is estimated to host approximately 1.12 million pounds of uranium contained in approximately 0.07 million tons of Inferred Mineral Resources with an average grade of 0.79% eU3O8.
Outlook for 2015:
- Pursuing the completion of the Company’s acquisition of Uranerz.
- Continuing the current Mill campaign to process alternate feed materials into mid-2015.
- Continuing mining at the Pinenut Mine until the economic resources are depleted, which is expected to occur in mid-2015. Pinenut ore is being shipped to the White Mesa Mill and is expected to be processed in 2016.
- Continuing development of the Canyon Mine.
- After mid-2015, continuing activities at the White Mesa Mill (except for mineral processing), and maintaining the facility in a state of readiness for the purpose of restarting mineral processing operations in 2016, or earlier as market conditions, cash needs and/or contract delivery requirements may warrant.
- Maintaining “standby” mines in a state of readiness for the purpose of restarting ore production as market conditions may warrant.
- Continuing ongoing business development activities, including permitting and development of existing projects.
- Evaluating the potential to acquire additional uranium properties in the United States.
Stephen P. Antony, president and CEO of Energy Fuels, commented:
As our first quarter results demonstrate, Energy Fuels continues as a leader among U.S. uranium companies on account of our uranium production, balance sheet, contract portfolio, and capability to significantly ramp-up production in the future as market conditions improve. We are quietly achieving success through the execution of a disciplined, yet aggressive, business plan that provides Energy Fuels with the ‘staying power’ to effectively capitalize on the expected uranium market recovery. As a result, we are generating gross profits from our mining and milling operations and maintaining a strong balance sheet. This has provided us with a solid growth platform, yet also allowed us to avoid the need for an equity financing since 2013.
Finally, with the expected addition of Uranerz to our corporate family later this year, we will further enhance Energy Fuels’ torque to uranium price increases. Wyoming’s Powder River Basin, where Uranerz’ Nichols Ranch Project is located, is among the best ISR uranium production districts in the U.S., with over two-thirds of all U.S. uranium production coming from this district in 2014. We believe that with appropriate investment in development and production expansion, timed to the expected market recovery, the Nichols Ranch Project can achieve its production potential. Indeed as prices recover, we believe our acquisition of Uranerz will give Energy Fuels the potential to produce more uranium, sooner. Despite the continued challenge of today’s uncertain uranium markets, I am more optimistic than ever about the future of Energy Fuels.