Energy Fuels Inc. (NYSE American: UUUU; TSX: EFR) (“Energy Fuels” or the “Company”), a leading producer of uranium and vanadium in the United States, is pleased to announce that it recently strengthened its cash position and currently has sufficient existing cash on hand to allow the Company the ability to retire all or a portion of its existing long-term debt and to further advance its long-term and sustainable vanadium production profile.
As previously announced on June 25, 2018, the Company was added to the Russell 3000® Index, following the 2018 Russell indexes reconstitution process that began on May 11, 2018. Since May 11, the Company has experienced relative strength in its stock price and increased trading volume. Due to this special situation, the Company recently increased activity on its existing ‘At-The-Market’ (“ATM”) program to raise equity on favorable terms, near the 52-week high on the Company’s stock, and with minimal dilution to shareholders. As a result, between May 11, 2018 and June 25, 2018, the Company strengthened its cash position by raising a total of $16.0 million through the ATM program, at an average price of $2.08 per share, including $7.8 million on Friday, June 22 at an average price of $2.10 per share.
The Company is evaluating the potential of using this cash to finance vanadium-related activities, particularly with the spot price of vanadium currently above $17 per pound, repay existing long-term debt, and/or maintain a strengthened working capital position.
The Company currently has a secured Wyoming Industrial Development Revenue Bond with an outstanding balance of $9.2 million, annual payments of principal and interest of approximately $4.0 million, and a maturity date of October 15, 2020. The Company also has approximately $16.3 million (Cdn$20.9 million) of unsecured, subordinated convertible debentures with annual interest-only payments of approximately $1.4 million (Cdn$1.8 million), a maturity date of December 31, 2020, and the right of the Company to redeem all or a portion of the debentures after June 30, 2019. The Company is evaluating using a portion of its existing cash balance to pay-off or redeem all or a portion of one or both of these debt components. If this course of action is pursued, the Company would expect to remove significant long-term liabilities from its balance sheet, avoid relatively large interest expenses, and reduce the Company’s overall cash requirements for the next several years.
As previously announced on May 8, 2018, the Company also plans to resume vanadium production in 2018 and expects to recover up to four (4) million pounds of currently dissolved vanadium (as V2O5) from pond solutions at the Company’s White Mesa Mill (the “Mill”), including up to 500,000 lbs. of V2O5 in late-2018 or early-2019. Beyond the pond project, the Company expects to use a portion of recent ATM proceeds to further advance its long-term vanadium production profile. The Company is currently in the process of renovating and upgrading portions of the Mill’s vanadium recovery circuit and completing the refurbishment of two of the underground access declines at both of its La Sal and Pandora uranium/vanadium mines, which are properties within the La Sal Complex where the Company received federal government approvals for an expansion earlier in 2018. The Company is also evaluating other advancements to its vanadium program, including further refurbishment activities at certain of its standby uranium/vanadium mines, completing additional drilling and resource evaluation at certain of its uranium/vanadium properties, potentially licensing vanadium-bearing alternate feed materials, and identifying and processing previously mined uranium/vanadium stockpiles in the vicinity of the Mill.
Cash not used for the foregoing activities will serve to strengthen the Company’s working capital position, push off the need for potential future financings, and put the Company in a better position to take advantage of other opportunities as they may arise.
Mark S. Chalmers, President and CEO of Energy Fuels stated: “The recent strength in our stock due to the annual Russell rebalance presented Energy Fuels with a unique, one-time opportunity to raise significant cash with no discounts or warrants, at little cost, and in what we believe is a minimally-dilutive manner. We strengthened our balance sheet and provided the Company with the ability to repay all or a portion of our existing long-term debt and further advance our long-term vanadium production profile, which supplies the steel and alloy industries and the growing vanadium battery and energy storage industries. All of this occurred while our stock has out-performed most of our peers in the uranium space year-to-date.
“While uranium will always be Energy Fuels’ core focus, everything we do, including vanadium recovery, is intended to support our uranium business. Today’s uranium markets offer Energy Fuels a number of exceptional opportunities, including our pending 232 Petition, which we expect the U.S. Department of Commerce to act on soon, new buyers of uranium coming into the market, falling primary production, Japanese reactors resuming operation, and generally increasing global uranium demand. We look forward to continuing to utilize our assets to pursue opportunities in both the uranium and vanadium sectors, while also keeping our cost of capital as low as possible. We are very pleased with the performance of the ATM during this recent unique circumstance.”
About Energy Fuels: Energy Fuels is a leading integrated US-based uranium mining company, supplying U3O8 to major nuclear utilities. Its corporate offices are in Denver, Colorado, and all of its assets and employees are in the western United States. Energy Fuels holds three of America’s key uranium production centers, the White Mesa Mill in Utah, the Nichols Ranch Processing Facility in Wyoming, and the Alta Mesa Project in Texas. The White Mesa Mill is the only conventional uranium mill operating in the U.S. today and has a licensed capacity of over 8 million pounds of U3O8 per year. The Nichols Ranch Processing Facility is an ISR production center with a licensed capacity of 2 million pounds of U3O8 per year. Alta Mesa is an ISR production center currently on care and maintenance. Energy Fuels also has the largest NI 43-101 compliant uranium resource portfolio in the U.S. among producers, and uranium mining projects located in a number of Western U.S. states, including one producing ISR project, mines on standby, and mineral properties in various stages of permitting and development. The Company also produces vanadium as a by-product of its uranium production from certain of its mines on the Colorado Plateau, as market conditions warrant. The primary trading market for Energy Fuels’ common shares is the NYSE American under the trading symbol “UUUU”, and the Company’s common shares are also listed on the Toronto Stock Exchange under the trading symbol “EFR”. Energy Fuels’ website is www.energyfuels.com.
Source: Energy Fuels