Energy Fuels Inc (TSE:EFR) (NYSEMKT:UUUU) has told investors it enjoyed a productive second quarter, in which it generated 437,000 pounds of vanadium and 19,000 pounds of uranium and continued to position itself to benefit as soon as there is an uptick in prices for both.
Having earlier this year filed a petition asking the US government to investigate uranium imports into the US, the energy metals group also reiterated Monday that it welcomed President Donald Trump's recent order to create a U.S Nuclear Fuel working group in a bid to reinvigorate the entire supply chain.
Energy Fuels holds three of America's key uranium production centers, including the White Mesa Mill in Utah, which is the only conventional uranium mill operating in the US today, and can generate over 8 million pounds of uranium per year, and can also produce vanadium when market conditions warrant.
The firm also owns the Nichols Ranch in-situ recovery (ISR) Project in Wyoming, and the Alta Mesa ISR project in Texas.
In the three months to end June, vanadium output was 437,000 pounds and the group said it expects to continue to produce between 160,000 and 200,000 pounds of vanadium per month through Q3, 2019, subject to continued successful recovery and suitable sales prices.
Sales of vanadium amounted to 98,000 pounds into the steel industry during the quarter at an average price of US$7.87 per pound, following its conversion into ferrovanadium.
Energy Fuels said it was currently selling only small quantities of vanadium, while mainly focusing on building inventory for future sales when prices increase.
The company added that it completed no significant uranium sales during the quarter and continues to add to inventories..
The operating loss of US$11.5 million (2018: profit of US$7.1 million) for the three months was mainly due to an impairment to inventories of US$4.9 million due to, among others low uranium prices and a decrease in vanadium prices in the quarter, and the decision to retain most of the vanadium inventory for future sale.
The net loss was US$9.3 million on revenues of US$3 million, compared to net income of US$7.1 million on revenues of US$26.9 million in the same period a year earlier.
As at June 30, the firm had US$42.6 million of working capital, including US$16.6 million in cash, US$11.4 million in marketable securities, 485,000 pounds of finished uranium goods, and 610,000 pounds of finished vanadium.
Notably, post period end, on July 13, Energy Fuels struck a new processing agreement, in which it will assist in the cleanup of a formerly producing mine in New Mexico.
The firm in June began taking deliveries of cleanup material at the White Mesa Mill, and this initiative is expected to result in a total of around US$1 to US$4.25 million of value for the firm.
The firm will retain any uranium recovered from the material for its own account, which is expected to total between 10,000 and 70,000 pounds of uranium, or between around US$250,000 and US$1.75 million at today's spot prices, it said.
The firm's CEO Mark Chalmers said in today's statement: "During Q2-2019, Energy Fuels continued to make important progress on a number of initiatives that have the potential to significantly improve the outlook for both our Company and the U.S. uranium mining industry as a whole."
He added: "At the current time, we expect to continue producing vanadium through Q3-2019, due in large part to seasonal considerations, while only making selective sales.
"We are also moving forward with discussions to potentially sell our product at premium pricing to customers who require higher purities. If vanadium prices do not make a dramatic recovery in the next few months, we expect to build inventory to capture future price spikes and then shut down production to save this valuable asset for later recovery."
Also today, the company welcomed experienced mining professional Alex Morrison to its board. He has many decades of experience with public companies both large and small, it said.
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