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 [Music] [Music] I'm Charlotte McLoud with investing news.com and here today with me is Curtis Mo SVP of marketing and corporate development at Energy Fuels thank you so much for being here well thanks for having me Charlotte really good to have you here again our last conversation was exactly a year ago here at pdac and where I thought we could begin is just just check in on the uranium Market where we're at in the cycle right now because it's been a pretty big year it has it has I'll start off by saying it's

a great time to be in the uranium business uh this is sort of the moment we've been waiting for uh you know we went through a a very long downturn in the price uh but all throughout that that that process uh the fundamentals were just still getting stronger and stronger and better and better and so finally here we are and uh the price has has risen to some uh you know very nice levels uh these are great levels for us as a as a uranium producer uh we can profitably produce uranium at these levels and so yeah again this is

something we've been waiting for for a long time now it's time to capitalize I think that's a good way to put it and with that in mind with that background I think it's easy to see why the company decided recently to go back in production at three three lines I believe so price of course is part of that but I wondered if you could talk about the decision because I'm sure there's there's a lot of factors well you know look there's a lot of uh factors driving markets today you know

not just supply and demand fundamentals but geopolitical issues uh you know just increased growth in nuclear energy and increased uh interest around the world uh in using nuclear uh as a solution to climate change um but uh ultimately the reason we brought these mines into production was price um this is it's uh you know this is the these these levels that we're seeing right now are levels that we uh that we like um now look I think that this could just be the beginning of the cycle I think there's

lots of reasons to believe that the price could go higher uh you know you never know where the top is going to be uh we have decided to uh lock in some of our production uh on the order of about 25% of our production so far into long-term contracts this would be sort of our short-term lowcost production um but we're still largely unhedged uh to uranium markets and further growth um but uh again we're able to make profitable uranium sales right now and again we turned a profit last year not

too many uranium companies were profitable last year um our goal is to try to continue that uh as we move forward we we've produced a lot of uranium over the last several years and inventoried it uh We've largely been the only uranium producer in the United States we've produced about 2third of all us uranium over the last five or six years um and so that's what we're selling uh into the market right now um and now we're getting these mines going so we can uh start to deliver that

uranium into the market profitably okay so you've got the three lines going another two I believe do to come online in a year or so so I wondered if you could talk about that and just the longl term careers for prodction yeah so so what we're like I said what we're focused on is what I term our short-term fully permitted fully developed lowcost portfolio and so uh this uh would get uh our company up to a level of about 2 million pounds of production per year um and uh that's from the three mines that

we're restarting that's also from these two mines that you referenced uh that includes our Nichols Ranch in situ recovery project in Wyoming it also includes our Whirlwind mine um along with our alternate feed Recycling and that sort of thing um so yeah we'll we'll see where the market is um and uh assuming markets remain as strong as they are and hopefully stronger uh we'll be putting those next two mins under production and hopefully be producing uranium at of a run rate of about 2

million pounds per year by next year at some point okay very very clear and I wondered if you could say more about the process of getting these lines up in morning because I think I think everybody knows you can't just flip a switch so what can you share about that well I will say that because we've been largely the only uranium producer in the United States um over the last several years it's enabled us to keep our Workforce intact it's enabled us to keep our our projects uh up in good in good

working order so no it's not as easy as just flipping a switch but it's it's probably easier for us than for others uh because we do have a Workforce uh to draw from and we do have uh facilities that we've been maintaining and and refurbishing and getting them ready for this moment so um so again it it takes time to get things going but I think it's hopefully it goes smooth for us and uh so far it is and we're excited to right and yeah and you've got got a lot going along right now but I I have to

ask you know would you be looking to acquire new assents at this time you know I like look nothing is ever off the table everything is you know certainly anything that makes sense but I would say that the time to buy uranium assets was probably five six seven years ago when the price was low okay um and so that was the time to position yourself for this moment and I would argue that today is the time to produce and sell uranium profitably where the prices are good right and so that's what we're

focused on um I would say you know and we'll talk a little bit about our rare rith business but in in that same vein now is the time to position ourselves in the rare earth business while prices are low anticipating that the market fundamentals will come back and uh you know it will be able to produce and sell rare Earths at a profitable level and ultimately that's what we're trying to do as a company is create a cash flow positive high margin critical Mineral Company centered on our uranium

capabilities um and uh again that's enabling us to to diversify into some other things and so again ultimately we're looking for for positive cash flow I think that's kind of what I expected you to say and it does make complete sense to me so thanks for going into that part I wanted to go back to contracts you know you mentioned you are mostly unhedged at this point and I wondered if you could talk about the process of signing contracts deciding what you're going to do with your

production because I think investors are really starting to focus on that now companies are starting to produce and they want to see that exposure to the spot price so yeah they do and look at the end of the day you never know where the markets are going to be in the future you never know where the price is going to be I mean again I think there's a million reasons to believe that the price is going to keep going back or going up but it's there's no guarantee there right and so uh again we focus on

profitability and and cash flows um and you know honestly it's one thing that maybe some uranium companies needed to do during the last cycle is that you know you don't probably want to put all of your production into contracts but you probably want to put enough in there to at least cover your cost you know your you know your corporate costs and things like that so if things do go sideways you at least are able to you know to to to tread water and and and wait for things to come back and so

we're looking at doing that and so again we've uh uh put about 25% of our production into contracts now I will say that uh those contracts also have exposure to the spot Market um so uh you know like for instance we uh made a sale to under our contracts uh right at the beginning of q1 this year uh 200,000 we sold it for about $75 per pound um it was still a 50% margin as I recall um that was at a time when the spot price was about $90 per pound so yeah we don't get full exposure to spot but um but

that same contract uh those contracts we sold last year uh I believe the the the the the average price was about $56 per pound so we do have leverage to the spot price under our contracts okay it's it's good to go into detail it was very interesting for me and the other thing I wondered if you could talk about you know we hear of utilities this this very opaque part of the market and I wondered if you could talk about how your conversations have changed as the market has improved well they're calling me

now um yes they they are uh yeah and again some people ask me oh are utilities panicking I'll say no they're not panicking right uh you know the they have large assets uh a lot of capital goes into into building those and so they're not going to you know put themselves in a position where they're about to run out of fuel but you know they want to make sure that they continue to have that uranium on the long term and so uh so yes they're calling me um you know the the you know

you'll notice that the long-term price is still only about $75 per pound versus the spot price today is about $94 $95 per pound um but we are seeing that that that long-term price start to step up toward that spot price where it is right now and you know being able to sign long-term contracts that has a fixed price component that's in the '90s look that should be that's it's good for us it should be good for others um and again hopefully things keep going up higher and again you want to leave quite

a bit of your production unedged to you know shoot if the price goes to $150 $200 $500 per pound you know you want to be able to sell into that sort of a market but on the other hand it's it's good to have that long-term high margin cash flow right and as we talk about the price you know I think it's pretty clear it could go substantially higher but I know that investors are looking at what's going on right now there's a little bit of consolidation a little bit of a pull back very small but you know I

think I think people are some people are a little bit concerned so maybe just your thought I I I I've heard this and I just have to laugh if you had told us a year ago that the price was $95 a pound we'd be jumping for joy now people are oh Bo I don't know it just pulled back to 95 it's like geez come on this is a good price okay and yes and it's also a spot price too and you know very little uranium relatively speaking trades on the spot Market there's a lot more volatility there it's much thinner um it

certainly uh presents great opportunities for instance our company we also sold 100,000 lbs last uh this quarter uh for an average weighted price of about $13 per pound um so it does you know have some nice opportunities to sell there but like if we had a million pounds to try to sell that on the spot Market might be a little tough it might drive the price down uh pretty substantially but on the other hand there is a shortage of material in the spot market so I don't know you know it's a again it goes back to the the

point you want exposure to spot but you know you don't want full exposure to spot at least that's the the the theory of our company okay and I think you know people people are still though they are looking for Price Callis right and one thing that I have heard coming up is this us potential ban on the Russian Imports and I I think that you're probably well positioned to talk about that so can you share what's what you see happen well I mean look it is a bipartisan issue uh it's not like

Democrats or Republicans are in favor or against it um I think there's broad consensus to uh have that happen I I it should have happened long ago I mean the atrocities that Russia is committing in Ukraine right now is is just it's it's horrifying and uh the fact that we're still spending or sell you know sending a half a billion to a billion dollars per year to Russia for their you know uranium and nuclear fuel is just personally a dismaying toate um but hopefully this ban comes about and we

stop sending that money to Russia um and uh I do think that that could be a catalyst for uh you know certainly on the spot market for uh further price increases hopefully it happens soon we'll see um it's all the the the the sausage making of uh of the US Congress so um but uh it it will happen I think at some point okay and so so there's some there's some images there to produce more uranium from inside the US how are we doing there on conversion and enrichment yeah there's those are Al

obviously pinch points as well um the conversion facility in Illinois is starting up right now um and that's good uh there is uh as I understand there's talk of expanding enrichment capacity both in uh in the US and in Europe uh to try to supplant uh that that Russian uh enrichment uh and and conversion capacity um I just I think that Russia has sort of just you know they they they poisoned the well you know you know certainly us and European U ities are probably going to stay a long long way

away from Russia for a long time and uh so there needs to be other production whether it's uranium mining conversion enrichment fuel fabrication uh outside of Russia and uh right now I think the West is rising to the occasion and ultimately that means more demand for our stuff so uh so that that again is a very positive Catalyst for just a uranium Miner like us right so so much going on in uranium but we do have to come back to the rare Earth's aspects and you know very interesting and we

always hear uranium you know this is a top Market to understand it's hard to get details but rare definitely hasn't beat I think so I wanted to start by just getting your thoughts on what's going on in the market right now specifically the part of the market that you're involved yeah absolutely absolutely like I said right now is the time to produce and sell uranium profitably right now with rare earth prices being uh a little bit depressed right now we think it's a great time to

position ourselves for when those prices ultimately come back um Rare Earth prices did uh do very very well over the last few years uh primarily driven by electric vehicles um but I think that some of the maybe proje initial projections for um you know for adoption of electric vehicles by consumers is it's still very strong honestly EV sales were were were far higher last year even than than previous years they're maybe just not quite as strong as some analysts were thinking they would be and

so that has dropped the price a little bit and so again that has presented a great opportunity for us to get involved in some other projects and so we're focused on this mineral called monite um we think it's the best way to produce the light rare Earths uh so so what you're primarily going after are the magnet rare Earths that's ndpr and TB and Dy those four uh ndpr are the light uh of those the the light rarus of those four and uh monite is a wonderful source for uh for ndpr uh number it's just got

higher concentrations of that naturally it's easier to process um and so we've been moving down that road with monite but it also has Heavies in it just not as many Heavies uh heavy rares as some other minerals out there um but we're about to uh commission a new ndpr circuit a separation circuit uh so that's the solvent extraction process you need to produce High Purity ndpr oxide um which is a huge step for us I mean it'll have the capacity to produce about a th000 metric tons of ndpr oxide

per year it'll be one of the largest ndpr circuits outside of China um and even better we did it way under budget we put this in our Mill for $16 million and when you hear about Rare Earth companies looking to spend hundreds of millions or billions of dollar and we did a a little rare circuit in up for a million EVS per year uh for $16 million I mean I hope that open some eyes and so we're we're probably going to produce on the order of 30 or 35 tons of ndpr just to commission it get it going make sure

it works optimize it and then shut it off and and focus on rare uh focus on uranium because uranium markets are strong right now but when that uh reare Earth price comes back which we think it will we'll be ready to go and you know I think every time I speak to you you seem to have picked up a new source of Mite and recently you've got an you for a project in Australia so it's looking it's looking pretty Global are you going to be continuing to look for sources are they going to be also in these global

locations yeah I mean what we're doing and again this is one of the reasons we think we're going to have an economic advantage over a lot of other Rare Earth uh companies out there is that our source of our feed is a byproduct of of other mining it's a byproduct of titanium mining primarily and so those are these are heavy mineral sand projects and they're primarily going after titanium minerals uh you know roual luoxin Zircon you know zirconium minerals that kind of thing and this

monite sand just occurs as a byproduct and so your cost to produce monite sand at a mineral sand operation is really low it's your marginal cost to to to pull it off and then ship it um because your primary economics are driven by the titanium and zirconium and so what we've been doing is uh getting involved in some mineral sand projects with the idea that we'll get the the the lowcost monite product a very lowcost uh source of feed you know possibly even free feed in in some instances which would be an

amazing advantage that we have um so yeah our project in Brazil our beia project which we're advancing right now uh We've announced this mou with the Donald project in Australia uh which we're excited about obviously um and uh you know our ultimate goal is to get up to say half or three4 of a Linus so Linus is the big Australian Rare Earth producer uh they're they're a great company doing great work in Australia um uh we're trying to get maybe half or or 2third of their size and so that that

that that gives people the idea of the scale of of Modas I we're looking for yes that does give a good idea of the scale and helps make it a much better idea so one more question I think it's they're kind of a funny Market where it feels like every few years four five three years we realize that it's a problem and we should probably be producing them in places outside of TR you know do you see uh how do you see that developing I guess as why my question you know are we going to get more you know on board with

with that yeah I think so there look there is a a real Desire by like auto manufacturers for instance to not be totally dependent on China they just look China's still going to be the big dog and rares for a long long time um and that and that's great I mean that's fine they they they do good work there um but they also see some risk there to you know to being totally dependent on these Chinese sources so so these these non-chinese sources are like ours are starting to develop um I do yeah I I do

think that we have got the right plan a lot of companies have struggled uh in the raar space it is a very funny Market um like I said it's even more complicated than uranium um we we don't do anything easy at Energy Fuels it's there you yeah um but we think we have got the right plan for the right time um in a very economic way that could be competitive uh should be competitive with China sort of tier one production of the rarest you need for electric vehicles wind energy and Military and

defense and all that okay really good to get those updates and just before I let you go any final thoughts on either uranium or or so you want to leave in Master's way no I think I think we covered it I mean again we're a profitable company we we made $100 million of net income last year uh which was a wonderful milestone for the company uh we're looking to keep that uh you know keep that profitability going in 2024 um and at the same time we're investing those profits into building up

this separate sort of Standalone business again related to uranium that's what R are and and again you know some I've heard people say oh we're moving out of the uranium business or something like that which is silly it couldn't be further from the truth I mean we're we're we're capitalizing on uranium markets by producing and selling it that's that's how you that's how you make money as a minor um and but we're reinvesting those profits into this other very potentially high growth

business and we just think it's a great way to build some shareholder value there okay very good we'll leave it there for now really good to have you on to talk though yeah Absol well thanks for having me of course and once again I'm Charlotte McLoud with investing news.com and this is Curtis M with energy FS [Music]