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Energy Fuels reported 2021-3Q EPS of $(0.05) versus $(0.08), in line with our estimate of $(0.05) and slightly below the consensus estimate of $(0.03). With no uranium sales and little revenues, the loss was largely a function of operating costs. Lower standby and administration costs helped improve the bottom line. Rare Earth concentrate sales covered its cost of sales. We had hoped to see Rare Earth start to contribute to earnings, but supply delays have pushed back sales into 2022. Company developments discussed in the press release have already been reported. The press release discussed the start up of Rare Earth Elements (REE) operations, the recent rise in uranium prices, management's desire to sign uranium supply contracts, the sale of non-core assets, "active discussions" discussion with monazite suppliers, and a strategic alliance to evaluate thorium (and possibly radium) recovery. Energy Fuels remains well positioned to expand operations. Working capital rose to $133 million ($100 million cash & securities). The company recorded $29 million in inventories at the end of the quarter, a number that has risen to $47 million with recent strength in uranium prices. Energy Fuel's cash position will grow with the recent closing of assets sales to Consolidated Uranium (CUR) worth $35 million payable in cash and CUR stock. Payments are staggered over the next three years and tied to achieving commercial operations (see Oct 27 press release) . We believe UUUU's cash position to be sufficient to expand REE and uranium operations (although developing REE separating capabilities would require external financing). Webcast at 4:00 pm ET on November 2 may provide additional color. Management will host a video webcast to discuss results and update investors on its operations. Interested parties can access the webcast by dialing 1-888-664-6392 or through the company's website. We are maintaining our Outperform rating and $9 price target. With results coming in line with expectations, we are maintaining our rating and price target. Energy Fuels remains the premier domestic uranium, vanadium and REE and is the best positioned to take advantage of the rise in prices for these elements due to its large, licensed milling operations. Read More >>
