Energy Fuels - Rating Upgraded and New Price Target Established

We are upgrading our rating on the shares of Energy Fuels to Outperform and establishing a $9 price target. The upgrade reflects an increased recognition of the value of Energy Fuel's Rate Earth Element (REE) strategy as well as a belief that the company is well positioned to take advantage of an expected increase in uranium prices. The success of Energy Fuels and its stock price is largely tied to the success of the domestic uranium industry. If uranium prices return to historical levels above $50 per pound, all domestic uranium companies including Energy Fuels will do well. We believe such a move will occur in the next few years in response to rising demand and decreasing international supply of uranium. We believe Energy Fuels has a first mover advantage compared to other domestic uranium producers because of its unlevered balance sheet, experienced management team, and control of licensed processing facilities. Energy Fuels is licensed to produce 11 million pounds of uranium, which would represent more uranium than has been produced in the United States in any given year. At the same time, the company has begun to process Rare Earth Elements (REE) concentrate from monazite sand at its White Mesa plant. Although difficult to quantify financially, we believe the processing of REE will provide significant cash flow to the company. Management has indicated its intent to process 15,000 tonnes of sand per year, which would represent approximately half of the national demand but less than 2% of the capacity of the White Mesa plant. Management has also indicated its intent to move to separate REE concentrate into individual elements. Our price target is based on a discounted cash flow analysis that places a value of $5 per share for uranium operations, $3 per share for REE processing operations and $1 for the Vanadium and net cash and inventory positions. Projected cash flows including reclamation costs are discounted back at a weighted average cost of capital of 8% and then divided by current diluted outstanding common shares. The assumptions behind our forecasts and valuation estimate can be found at the end of the report. Read More >>

News Provided by Channelchek via QuoteMedia

The Conversation (0)
Canadian and Saskatchewan flags waving under a clear blue sky.

13 Uranium Companies Exploring Canada's Athabasca Basin

Uranium market watchers know that Canada’s Athabasca Basin is among the world’s richest uranium jurisdictions and hosts several of the highest-grade uranium deposits on the planet.

Spanning close to 100,000 square kilometers of the Canadian Shield of Northern Saskatchewan and Alberta, the Athabasca Basin is a major contributor to Canada’s status as the second largest uranium producer and the third largest country by uranium reserves.

Unsurprisingly, the region is home to the world’s largest uranium mine, Cigar Lake. The mine reports average grades of 14.69 percent U3O8 and accounts for 14 percent of global uranium production.

Keep reading...Show less
Terra Clean Energy (CSE:TCEC)

Terra Clean Energy


Keep reading...Show less
A$4.5M Placement to Underpin Resource Growth Strategy

A$4.5M Placement to Underpin Resource Growth Strategy

GTI Energy (GTR:AU) has announced A$4.5M Placement to Underpin Resource Growth Strategy

Download the PDF here.

John Ciampaglia, nuclear reactors.

John Ciampaglia: Uranium Turnaround? Spot Price Pop, Stocks and SPUT Raise

John Ciampaglia, CEO of Sprott Asset Management, discusses uranium supply, demand and pricing, also sharing details on the Sprott Physical Uranium Trust's (TSX:U.U,OTCQX:SRUUF) recently closed US$200 million bought-deal financing.

"It's clearly acted as a very positive catalyst — the spot price has popped, a lot of the equities have popped on this," he said about the agreement.

Keep reading...Show less

Latest Press Releases

Related News

×