Energy Fuels Inc. (EFR) Earnings Call Transcript & Summary

Good afternoon. My name is Pam, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Energy Fuels Conference Call and Webcast. [Operator Instructions] Thank you. Mr. Chalmers, please begin your conference.

Good afternoon, everybody, and welcome to today's webcast. My name is Mark Chalmers. I'm President and CEO of Energy Fuels, and I'm excited to talk to you today about rare earth elements. Also joining me today will be Paul Goranson, our COO. As many of you know, Energy Fuels has been leading the charge with the U.S. government recently, actually over the last couple of years, on getting attention on the U.S. dependence on nuclear fuel products, including uranium, and we've become almost 100% dependent over a number of the last couple of decades. That should shock everybody because we are the largest consumer of uranium in the world, and we have almost zero capabilities right now in mining, conversion and enrichment. Just like our dependence on primarily the Russians and their allies, we also, in a similar fashion, are dependent on imports for rare earths elements from China. Reducing our dependence on rare earths has become a major initiative for the U.S. government. In the past year or so, Energy Fuels has been approached by the U.S. government and a number of private companies about what our capabilities might be in the rare earths sector. And we spent the last several months looking at that seriously. And we've come to the conclusion that we may be able to offer a significant value in this space. I want to remind people it's early in the process, but we're very excited about this opportunity. And if successful, Energy Fuels could play a larger -- large part in bringing rare earth element processing back to the United States. Next slide. During the course of the presentations, I will probably be making some forward-looking statements, and those are included as disclaimers at the back of the presentation and our recently filed 10-K. Next slide. In addition, we will open up the floor for questions at the end of the presentations. And lastly, I'm always available for a call. And so if anybody wants to call me off-line, please do so. Many of you will know the key investment themes for Energy Fuels, the investment themes. But some of you may be new to this call, so I think I'll go through them at a high level. Firstly, we always will be and continue to be a uranium-focused company. We have been the largest producer of uranium over the last several years, and we have more production assets and capability to increase production quicker, faster when the market demand signals are there than any other producer in the United States. We have also have a long history of producing vanadium, and we produced vanadium last year when the price of vanadium was higher than it is now, but we have the ability to resume vanadium production very quickly when the need arises. As I mentioned, we've been leading the charge with the U.S. government on the focus on reducing dependency on imports of uranium in the United States. And we are very proud that we were the lead kind of company that got focused on the U.S. uranium reserve, where the President is asking for appropriations in the budget cycle for 2021 for $1.5 billion over 10 years. And we have been the main leader of that charge, as I said earlier. Also unique to Energy Fuels is we have diverse business opportunities that complement our uranium business proper. We have a long history of producing alternate feed, which is recycling on low-level natural uranium, and we've done that for a couple of decades. We have been currently starting to do some land cleanup activities, and now we're looking at adding rare earths to that mix of opportunities. Lastly on the themes, we have the strongest balance sheet of any one in the uranium sector in the United States, and we're very proud of that. Next slide. Well, again, many of you will have seen this slide before, but our footprint, we have properties and projects leading -- going from Wyoming all the way down to Texas. And the little green stars, if you look at the top there in Wyoming, we have 2 ISR facilities. That is our Nichols Ranch facility, which is on standby now, and we have another ISR facility at the South Texas, which is also on standby. But really, the topic of today is the White Mesa Mill, which is in the Four Corners region. It's that blue star. It is fully licensed and constructed, and it's the only operating conventional mill in United States today. If you replicated that project, it would take you at least 10 years to license and several hundred million dollars. As we'll describe today, we have -- we think that -- we have over 40 years of successful production history with processing and handling radioactive materials at this site, and we think it can be utilized to process rare earth element ores. Next slide. White Mesa Mill. White Mesa Mill is one of our main flagships of the company. I mentioned it is the only operating uranium mill, but it is also the only conventional uranium -- or vanadium processing facility. Uranium and vanadium, like rare earth elements, are critical minerals. White Mesa is a large facility that sits on about 5,000 private acres in Southwestern Utah and has the current processing capability of 2,000 tons a day of conventional ores. The mill is the largest processing -- or private employer in San Juan County, and about half of our employees are Native Americans, and we're very proud of that. The mill has processed uranium ores and other radioactive feeds for about 40 years. And during that period of time, it's produced nearly 40 million pounds of uranium and 50 million pounds of vanadium. If you go back into the '70s and '80s, there used to be 30 uranium mills in the United States, and now we have 1. The main reason the White Mesa Mill has survived the test of time is because of its flexibility. And the flexibility that we have experienced with White Mesa Mill over the years is really where the current rare earth opportunity fits in. Next slide. I will talk a little bit about rare earth elements. Rare earth elements, there are 17 chemical elements, including 15 lanthanides plus scandium and yttrium. Despite their name, they're not particularly rare, but they -- but finding economic deposits is hard to find. There are significant rare earth deposits in the United States and around the world. Rare earths are used for a variety of uses, including industrial, energy, military and defense applications. But it's important to point out that many rare earths deposits contain significant quantities of uranium, thorium and other radioactive elements. This is the reason why we believe the White Mesa Mill may be uniquely positioned to process rare earths. Next slide. Because of the critical military and defense applications for rare earths, the U.S. government is very concerned about America's dependence on imports of these critical minerals. According to the USGS, China controls about 90% of the global rare earths market. To the extent that the U.S. currently does produce rare earths, most of these ores are shipped to China for processing. We believe that China uses our free market principles against us and manipulates global rare earth markets to ensure their control, and that has been done in the past. In an attempt to reduce U.S. dependence, China -- on China, President Trump issued 15 determinations back in July of 2019. He declared rare earths essential to national defense. Signing the Defense Production Act, he directed the U.S. Department of Defense to support domestic rare earth production, including potential funding for pilot-scale operations and direct purchase of rare earth elements. We believe the U.S. government's support for domestic rare earth production is essential for the success of the industry, particularly competing against the government of China. And now, I'd like to turn it over to Paul Goranson to discuss where Energy Fuels may fit into the picture. Next slide.

Thank you, Mark. It's our view that there's a strong potential that White Mesa Mill maybe the ideal U.S. processing facility for rare earth ores. First is our view that the U.S. has no rare -- significant rare earth ore processing because permitting such a facility and to handle and process low-level radioactive waste is lengthy, [ pretty ] difficult. In addition, significant capital is required to build such a facility. And because rare earth markets are volatile and potentially controlled and manipulated by China, there's -- the cost of capital can be very high. But the White Mesa Mill may solve some of these issues. First and foremost, the White Mesa Mill already exists. It's licensed, constructed and in operation today. It has a 40-year history of responsibly managing low-level radioactive materials. Importantly, for us, many rare earth ores contain recoverable quantities of uranium, as we have acquired or recovered uranium, along with the rare earths, under our existing mill license. In fact, we believe we will be able to recover rare earths, along with uranium, under our license or with routine, minor license amendments. Finally, to resolve the commercial issues with U.S. rare earth production, it is our hope that the U.S. government steps up to help insulate U.S. companies from foreign market influence. Next slide, please. This is a photograph of the White Mesa Mill. It, as I had mentioned earlier, is existing and in operation today. We have significant infrastructure that we think can be applied to rare earth recovery. You can see from this photograph, you can see that some uranium ore stockpiles on the right, some alternate feed materials waiting to be processed in the lower left. The main mill facility is in the upper half of this photograph. Next slide, please. Here is another picture of the mill building. Next slide. And here are some of the key points in the White Mesa Mill. We have -- in the first upper left corner of the picture, you saw a truck dumping ore [ adding more ] onto the -- on the stockpile. We have a significant stockpile capacity at the mill from the day it was constructed. In the upper right-hand corner is a portion of our current solvent extraction building. We have significant solvent extraction capacity currently in place and experience currently in place at the mill. In the lower left-hand corner is our current -- our operating SAG mill. It's a semiautogenous grinding mill. And in the lower right-hand corner is a picture of our countercurrent decantation circuit or CCD circuit. Next slide, please. Rare earth element processing is well understood, and we believe that specialized processes can be bolted onto the White Mesa Mill recoveries mills. There are a number of minerals that contain rare earth elements, including monazites and bastnäsites. I'm not a geologist. I apologize for that. Each rare earth ore stream needs to be a specialized process. That's where the flexibility we believe the White Mesa Mill provides. It's a flexible facility where existing infrastructure can be used or new infrastructure can be installed. White Mesa also has a distinct advantage of having a 40-year history of processing and handling other ores' alternate feed streams that presents similar health, safety and environmental issues that could come with rare earth ores. And the mill already uses a number of processes required for rare earth recovery, including solvent extraction, tailings management, leaching, precipitation, et cetera. And finally, we want to make it clear. We're not looking to get into the rare earth mining business. We are evaluating potentially becoming a processing facility for third-party ores or other uranium buried streams provided by others that contain rare earths. We intend to enter into a coprocessing joint venture or other similar arrangements with these third parties to process the rare earth ores at the White Mesa Mill. And Mark, I'm going to hand it back over to you. Next slide.

Thank you, Paul. Okay, while Energy Fuels has significant processing experience and expertise related to uranium and vanadium and alternate feed materials, we believe it is important to team up with experts in the rare earth element area. That is why we have engaged with ANSTO. ANSTO, many of you probably have heard ANSTO in the past, but a lot of you may not. ANSTO is a research and consulting group based out of Australia, and I have worked with them over number of occasions over the last couple of decades. The closest analogy to ANSTO is it's kind of the Australian version of the U.S. national laboratories like those at Los Alamos, Oak Ridge and Idaho. ANSTO has considerable experience with a number of things, but primarily, uranium and rare earth processing, including design, testing, evaluation, mineralogy, flow sheet development, pilot and demonstration plant design and operation. But we will also look at other consultants as is necessary. Next slide. Now the main focus of this webcast is on the rare earth, but I want to say a few words about uranium. And I also want to reiterate that we are, first and foremost, a uranium production company, and we think rare earth is a nice complement to some of our consisting activities. Certainly, on the uranium front, things are getting interesting because of the COVID-19 virus. Just about every day now, you are hearing about another mine being shut down around the world because of COVID. Kazakhstan announced that they were going to cut production by about 20%. That represents about 10 million pounds of production. Cameco made the announcement they're going to suspend operations at Cigar Lake, and then after that, they said indefinitely. That's the world's largest Uranium mine and having it shut down equates to about 1.5 million pounds of less uranium production per month. Namibia is also extending their lockdowns, and they produce around 60 million pounds a year. So if you add that all up, those cuts are huge and is really taking a bite out of the forecasted 146 million pounds of production for this year. Our conservative estimates are that those cuts are knocking out about 1.5 million to 2 million pounds of uranium produced in the world per week. So if this goes on for a number of months, it is going to make a substantial dent in uranium production in the world. But not only that, if you look at it, since the 1930s, there is no uranium production in North America, including the United States and Canada, or conversion. So again, that should shock people because this is the first time in, what, 70 years, that we haven't had a uranium production in North America. Next slide. I'd like to talk a little bit about uranium prices because, fortunately, for once, they are going up and going up pretty quickly. Price of uranium has increased about 25% in the last 1.5 months, and that's the highest prices we've seen in the last 4 years. Price is still below the cost of production for most mines around the world, but it is encouraging, as I said, the theme going up for change. We believe most uranium mines, particularly in the Western world, need prices above $50 to be sustainable, and new mines need far greater than that. Next slide. Okay. This is just the last slide to kind of wrap things up. There is no company like Energy Fuels out there in the space. We're the leading U.S. uranium miner. We have these diversified business opportunities. We have more uranium production capability and resources than any other U.S. miner. We're the only primary producer of vanadium in the United States. These other revenue sources like alternate feed and legacy mine cleanup are significant, but we also think they have the potential to expand in time. And we think rare earth elements has the potential to be very complementary to our core business and utilizing our facilities at the best advantage to our shareholders. We're also extremely proud about our strong balance sheet. No other U.S. miner has the balance sheet that we have by far, and that balance sheet is improving with increases in uranium and vanadium prices because we have substantial inventory. We're going to continue to lead the charge with the U.S. government. We think that we should be the largest beneficiary if the U.S. uranium reserve gets appropriated for that $1.5 billion I talked about earlier. And we'll continue to work with the Nuclear Fuel Working Group. And we're also very active with the Russian Suspension Agreement, which currently expires at the end of this year. So really, the last thing I want to say is that we are going to always be working to make our luck in this space. And it's kind of like fishing. Sometimes, you got to have a few poles out there in the pond with different bait on them, and we have a number of those as we've discussed today. So now I'd like to close out the presentation and just open it up for questions for those of you who might want to ask questions from Paul or myself.

Your first question comes from Colin Healey with Haywood Securities.

Just wondering a bit about the budget that you are allocating to the studies with ANSTO, first of all.

Well, look, Colin, we really don't have a formal budget for what we are willing to spend. But as you know, we've got this strong balance sheet. We've got plenty of cash. But we're going to start this process out based on its merits, and we have the ability, certainly, to ramp that up as required. So I mean, with ANSTO, as I said, I've worked with them for many years. And we've got a full mill at the -- our full lab at the mill, and we are going to just go on an as-needed basis at this point in time.

So are they going to be carrying out some of that work at the mill as well as back in the labs in Australia? And I guess, also, have you kind of set out like kind of first key deliverables or milestones? I'm just wondering what's the first work that they're going to do and what it's going to look like.

Yes. Look, if the first work's going to be done, it's going to be done at our other facility at White Mesa with our laboratory. We do have some materials from different places from around the world that we'll start testing. And basically, we're going to do work at our facility, and we'll reach out to ANSTO as we need support.

Okay. Yes. Kind of my next question was just about identifying rare earth element deposits that would be suitable or might be ore sources. Have you found like a number or identified a number within the U.S. that would be suitable?

Yes. Look, we're not going to get into specifics, but we've had, as I said, a lot of inbound calls from a number of different parties from around the world. And we're currently in the process of evaluating how that best could be made up with White Mesa in our facility.

Okay. And how does -- sourcing the rare earth element ore potentially outside the U.S., how does that sit with kind of the government support for making it an essential element or critical material?

Look, I think the government would like to be fully self-sufficient, but we do have a lot of other allies around us like in Canada and in Australia and other parts of the world that are friendly trading partners with us. So I think we're going to look at all opportunities, Colin, at this point in time what seems to make sense. As I said, the White Mesa Mill is a very large facility. And we know we'll have to modify the facility depending on what kind of streams that we have. But we're going to be open for the opportunities. We don't see any impediment right now, at least from a government perspective, but we'll be looking at all options available to us.

Okay. Yes, I understand it's very, very early stage. Last question from me. Just wondering about the -- you mentioned the front-end processing capacity of the mill. I'm just wondering, based on the deposits that you know of out there, is that an appropriate capacity for the amount of feed that you would expect to get? Or how does the mill crushing capacity, how is that -- is that appropriate for economic rare earth processing operation? Or would you expect that it's high or low?

Look, at the White Mesa Mill itself, it's set up for uranium ores up to 2,000 tons a day. So look, there's a lot of common infrastructure, like your tailings facilities, our laboratories, our licenses, our stockpile capabilities and things like that, that definitely can be used. And there probably are parts of the mill itself that can be used. But a lot of these rare earths, you're looking at very small quantities. So we'll just have to look, and depending on what the sources that are available, what the mineralogy is, we'll have to figure out what additional equipment we'll need or if we have to scale things down as is prudent.

Your next question comes from Joseph Reagor with ROTH Capital Partners.

I guess, trying to continue on some of the prior callers' questions. Have you guys like vetted like what potential specific entities have or that's close enough to make it worth shipping there? Like, how far down the line are you guys on that?

Well, we've -- as I said, we've been talking to various parties at high levels. So we don't have any specifics right at this point in time. So -- but I think that one of the real appeals of White Mesa is that, as we said, that most of these rare earth elements have uranium, thorium and other radioactive materials in it. And we're at a -- certainly can advance somebody needing to process and wanting to process much quicker because of those capabilities being licensed to take that type of material. So it is early days. And as I've said, we're at the very beginning of the process, but we very excited about the excitement that we've been receiving from people outside our organization. I mean one of the reasons that we decided to go this way is looking at our licenses and the excitement from others that they may have a potential opportunity of a well-sited location that can get them to market quicker and faster and at a potentially lower capital costs.

Okay. And then kind of bigger picture. You mentioned this. China kind of has a habit of doing whatever they have to, to maintain their 80-plus percent market share across most of the rare elements. Is part of your guys' process to try to find opportunities here where you can be, call it, less than 10% of world supply so that you don't become a target for them?

Well, as I said, it's -- I think it's too early to talk about what size of the market we may try to shoot for. But I think that, particularly in our position where we're diversified, uranium is our primary business, we've got this facility, we've got have vanadium, we've got some of the other things, we can be probably a little bit more flexible than perhaps others that are 100% dependent on just the rare earths themselves. But we think that certainly and more importantly in these last few months or something has been this higher awareness created on dependence of critical materials wherever they come from. So as I said, we're not at the point where we're saying we're trying to be in 10% or 20% or whatever it is. But we think we could be a substantial contributor in this area because of things we discussed in the presentation.

Okay. And then shifting gears quite a bit. On the uranium front, you guys have constantly been trying to work to help with some of these uranium cleanups on Native American land. Any progress there? Or is this -- the COVID-19 situation basically back-burnered to all those opportunities?

Well, we currently have one project that we're working on that's not on the Navajo Nation. It's not far from it. But we have been helping a private entity take some of their low-level ores from that site, and we've been taking that for a number of months now. The COVID has put sort of a stop on our work with the Navajo Nation. But we do have a test project with Navajo Nation that we're working at basically doing it for free. The Navajo is going to ship material to White Mesa, and we're excited about that because we want the Navajo, the EPA and the public to be comfortable with -- we can really do a major contribution here in helping clean up some of those sites. And that's something that I'm personally very committed to because it's where we can really use that facility to clean up some of those legacy sites to everybody's benefit.

Yes, agreed. And then one final thing. On the balance sheet front, you guys raised some capital earlier this year. How much cash do you guys have right now? And like, how long of a runway does it give you as we look to try to like just get through this period?

Well, as I said, at the end of 2019, we had over $40 million of cash trading -- tradable securities or inventory. We raised another $19 million. We have also seen an upgrade in our inventory values because of the uranium prices. Look, we're in really good shape, and we think we're in very good shape for the next couple of years.

Your next question comes from [ Jack Kim ] with [ Alpine Global ].

It's [ Jae ] from [ Alpine ]. Can you help me out with a couple of things? What was the total number of pounds of uranium? Was it somewhere around 100 million, 130 million pounds?

What, that we processed in the past or what we have in inventory? What are you talking about?

I mean what you -- that you have in the ground effectively, minable in the ground.

So it's about -- those resources, I think, Paul, are what, about 130 million-pound resources? Is that what we have in the books, at least, in that order?

It's about 130 million to 140 million. I don't have a specific number sitting in front of me.

Okay. So if we just look at a 130 million number, I mean, effectively, at a 188 -- a $180 million market cap, an investor is paying $1.38 for the uranium in the ground, right?

Correct. Yes. Correct.

And I now realize there's manufacturing and processing costs. But effectively, just looking at it as a uranium bank, spot price is at $25, $30, $40, market rates on contract in the 30s to 50s. I mean, if someone were to go out and acquire uranium assets, would -- what would -- if you had that on the balance sheet, what would you buy mineral assets store?

Well, that's a big question because there's so many different factors in there, [ Jae ], you can probably imagine. But look, when you look at trying to find new uranium at $1 or $2 per pound, you have to -- that's whole a lot of money to find new uranium. But we think that a lot of our assets are the best in the U.S. or that have been found over the last 40, 50 years. And it's -- uranium is pretty hard to find. But it depends. But you have to look at all these things, like where is it located. Is it underground? Is it surface? What does it cost to process it? But it's expensive to find uranium, and if you could find it for $1.50 pound or whatever you calculated off of those are the numbers that we gave you with our market cap, you'd be lucky to replace those pounds for sure.

Yes. So -- yes, I'm just kind of looking at the -- we get the story and understand the dynamics and the spot pricing and the U.S. sourcing. But it just seems to me that paying -- the valuation of the company relative to the 130 million pounds of proven reserves of uranium, I mean, it's kind of a no-brainer exercise when you do the math, right?

Yes. And [ Jae ], if you look at -- not get into too much detail here, but if you look at the cost that people paid for acquisitions in an improved market, it would have been $5, $10 a pound or something in that order in a stronger market. So yes, we're at very low valuations in terms of relatively market cap versus resources at this point in time.

And the finished resources, the finished uranium you have for sale, what would that be on a gross dollar basis nowadays around spot?

Well, look, we've published we've got about 510,000 pounds of finished uranium currently in inventory at White Mesa or other places. So take whatever price you want. If it's 500,000 times $30, that would be $15 million of uranium. We're still producing small amounts of uranium from some of our alternate feeds. We plan to build that out. That may increase up to around, say, around 700,000 pounds, we think, by the end of this year. So material amount of uranium and if the price of uranium goes up pretty substantially, as I said, it makes a huge difference to our working capital.

Yes. So beyond -- just there's a question beforehand. But when you look at cash, the burn, you really have kind of roughly against spot prices today another $16 million of really instant liquidity available to you.

Yes, largely. Correct. But don't forget, we also have vanadium. We have about 1.6 million pounds of finished vanadium product as well, too. So look, that gives us a lot of optionality because we think there's more upside to uranium prices than downside. Vanadium has been beaten up. It's still creeping up a little bit, but not moving too substantially. So look, it gives us a lot of different optionality in how we manage the business going forward depending on what's happening in the market and with commodity prices.

And the final question on the rare earth side. I mean this has happened before. I think Trump last year, one of his only actions was securing rare earths. I mean we've seen this scenario play out before, what, 10, 12 years ago with Molycorp and the threats made by China about withholding molybdenum and neodymium and other essential minerals. Do you think this time around we're going to learn from the lessons of the past and that it's not good to have essential building blocks controlled by a foreign entity and this time around, we are, as a country that have a different, more sensible attitude towards securing said items? Then what [indiscernible]?

I hope it's not over.

Yes, I hope so, too. But the margin structure -- so you're just going to be doing processing. Are you looking at taking a fee per ton? Or are you looking at taking possession? Just wondering theoretically as it walks through the balance sheet, through the P&L and the cash flow statement, how I should be thinking about it. Is it just like a rev split and just royalty ask, if you will, or you're going to take hard tonnage and take that certain amount of risk to sell the finished goods?

That's too far down the path at this point in time. Look, historically, when we toll processed different materials, including alternate feed, it could be a mixture of a feed. It could be a split of the product or some combination thereof. But right now, we want to make sure that people that are in the rare earth business understand that we're open for business and we'll work with whoever shows up the doorstep to come up with a good economic outcome for the parties that are involved. And so we're open to what that might look like. Our view is toll processing is kind of the direction we think we'd like to go. But certainly, if there's people out there that want to look at using the facility, it's all negotiable.

Your next question comes from Howard Brous with Wellington Shields.

The reference to one of the prior comments of the 130 million, 140 million pounds of 43-101, is that correct? Is it a proven reserve?

Yes, yes. In the order -- I don't have it in front of me, Howard, but that's 130 million pounds, yes. They're resource...

130 million, 140 million...

Most of those are resources, yes.

Are those -- those are proven reserves?

No, there's some reserves, but mostly resources, yes. Measured, indicated and inferred.

Right. That's why I was asking the question. What is your current capacity at the mill to process? First, let's talk about uranium and vanadium, pounds per year.

It varies, Howard. But the mill has licensed capacity of 8 million pounds per year. The best it's ever done is about 4 million pounds per year. When you start processing the uranium, vanadium ores, we usually slow down the circuit a bit for that. But look, it's certainly several million pounds a year of uranium and many million pounds of vanadium, maybe 4 million, 5 million pounds if you're going at full tilt or something. But very large capacity on both of those metals.

What kind of CapEx would you need to expand from your current roughly 1 million, 2 million pounds of capacity? Assuming it's [indiscernible].

As a company or is it White Mesa Mill?

Yes, White Mesa Mill.

Well, look, as a company, we say we don't need a lot of capital, but we definitely need a lot of working capital to go to, say, uranium production as a company of 2 million to 3 million pounds. We probably need in the order of $50 million of mainly working capital to get back to the 2 million to 3 million pounds per year rate. If we're going to go higher than that, we need more capital. And then we start talking about increments of $50 million, $100 million, maybe $200 million to go up towards 5 million pounds, 6 million pounds or something like that. But we can reach the 2 million to 3 million pounds with mainly working capital and just minor amounts of extra capital.

Your next question comes from Heiko Ihle with H.C. Wainwright.

Just going through the presentation. You mentioned -- and earlier I had a feeling that it might get -- too early to say. I mean you said you can't discuss potential targets here. But can you just maybe give us an idea as to the size of the target market that you've had discussions with or that you plan on targeting, please?

Yes. It's probably too early to say anything on that, Heiko. There are a number of streams -- rare earth streams or concentrates that we can focus on our existing operations. There are a number of players that have mines and deposits that are at various stages, most of them are very early stages, probably don't even have all their permits required. So it's going to be very variable on what we could be looking at. Now one of the advantages, rare earths are very high-value per ton kind of deposits, and so it's too early for me to say exactly what quantities we're talking about. But it's, generally speaking, low tonnages compared to traditional mining.

Fair enough. And nice lead over to my next question. Speaking of tonnage, just to confirm, what would the impact on White Mesa in regards to changes to the circuit, changes to tonnage, additional equipment needed, all that kind of stuff to get all this going? And how much of that is reversible and how hard or easy is it to do? And I assume -- plus it's way too early to have an answer to that, but if you wanted to sort of at least give us an idea, please.

Yes. Look -- and I think that a lot of the equipment would be a secondary circuit. So we would still maintain our ability to process uranium or vanadium or other ore feeds that we have that are traditional uranium ore feeds. But again, we'll look at what the options are to use what parts of the facility can be utilized where it saves some money. So I would think that we're probably looking at a separate circuit -- mostly a separate circuit. But certainly, things like the tailings facilities, there's some commonality there. And that in itself is a key part of the advantage, is we've got these 1,000-year designed [ nuclear ] state-of-the-art cells that are specifically designed for disposal of radioactive -- low-level radioactive ore streams.

Your next question comes from Sam Rebotsky with SER Asset Management.

Tell me, what was the price per pound at the end of the year? And what is the range and what is the current price per pound of the uranium?

Look, at the end of the year, it was around $24 or $25, I think. And currently -- I'm talking spot price. The current prices after the shutdowns that I discussed has risen up to around $31.50 to $32 a pound. So it's gone up about 25%. That -- and that's just the spot price. Now mostly, uranium is purchased under contracts that would be higher than that. But as I said, current spot prices are still too low to economically produce uranium in most places in the world. So we still got our ways to go, but it's encouraging that it's going up and going up fairly quickly.

And when you look at the revenue for the last 2 years, the loss of $25 million and $38 million and the uranium concentrates basically went from 30 million down to 66.66. What do you need to do to get those numbers up? Is the current prices desirable to make the profit or reduce these losses?

No. Currently -- as I said, the current prices are not high enough to make a profit. Now there are certain circumstances where we can actually be positive -- cash positive with White Mesa Mill, some of our alternate feed or recycling activities. We need in the order of about a minimum of 1 million pounds a year of production with pricing that is in that range that I gave in the presentation, which is north of the $50 per pound. One of the things that has happened is that because price has been so low, we've gone down to basically 0 uranium production in United States. And one of the reasons our burn is high is we have more assets than anybody else in the uranium sector in United States. When you have a lot of assets, you have a lot of holding costs when it comes to permits and people to keep those projects and good work in order. If people do not have assets, they can have a very low burn because they have nothing to maintain their losses. So it's expensive to have the properties we have. As we said, we've got 3 production facilities. No one in the U.S., at least in our -- kind of our peer group, has 3 production assets that are fully permitted and ready to go.

And the prices for the vanadium, what was that at the end of the year? And what's the current price in the range?

Yes. The price of vanadium going back about a year ago was -- it went up to nearly $30 per pound. It came down -- the price dropped down to $5 per pound. It's now up to about $5.70, $5.75 a pound. So it's still at fairly low levels. But having worked with vanadium in the early parts in my career, I learned long ago that in order to capitalize on the vanadium market, the only way to capitalize is have inventory ready to deploy at short notice when the price goes up. So that's really the position we're taking on marketing vanadium.

And as far as rare earth that you would like to sell and process, what kind of revenue -- what would the prices for the rare earth be? And could that be profitable since it's just coming from China and this is basically in the U.S. directly? And you might be the -- would you be the only producer of the rare earth in the U.S.?

Well, there's a number of companies that are looking at entering into the processing and doing further downstream processing in the rare earths. So look, it's too early for me to say anything about profitability from rare earths. It depends on, one, if we can acquire sources, what the quantities are, what the grades are, what the cost is to process it, what the current prices are for the rare earths that you're selling. So look, I would like to defer on that for now. But certainly, as we go through this process, we'll be happy to inform our shareholders in the market as we get more information available.

Is there any possibility for the government to make the uranium from the United States demand a higher price and prevent -- with the tariff coming in from China so that you could be profitable from your uranium and vanadium?

Yes. Look, the request we've made to the U.S. government is that we need higher prices than current ore prices because many of those prices are subsidized by state-owned enterprises. So we're asking the U.S. government to provide pricing that is sustainable in the Western world and for U.S. producers to survive. Look -- and I think a lot of the same thing kind of is applicable in things like rare earths and other critical materials, where a lot of these state enterprises are operating at and selling at prices that are unsustainable in the Western world.

Well, good luck. Hopefully, the prices work with you so that you could eventually make a profit. Good luck.

Your next question comes from Peter Trapp with Bifrost Fund.

So Mark, I have a series of questions. So I'm involved in the rare earth quite a bit. And my first question is whether, in fact, you're looking at this as a strategic long-term plan or whether this is an effort to use some capacity utilization at your plant because from my understanding, people like Lynas and Northern Minerals in Australia, Nucor, Round Mountain are all looking to build their own facilities. And in which case, if we have to be -- that your strategic plan would be for a short-term fill-in? That's my first question.

Well, we're -- as I said, it's early days. We're looking at a strategic long-term plan on how rare earths may fit into what we do using our facility. Some of these other companies that have these streams that will likely have low-level radioactivity, we may provide a different option to them that maybe it makes more sense to do something with White Mesa than it does doing a new facility in some other state or wherever they are in Canada or whatnot. So -- but, no, we're looking long-term here. We're not looking short term. And as I said, when you got a facility and it's got the licenses, the low-level radioactive material, you've got staff, you've got lab facilities and whatnot, that gets kind of, we think, ahead of the game in a number of these areas. Does that ultimately drive the best economic outcome? I can't say at this stage.

Okay. So my second question is that Lynas on the earnings call last night mentioned that their Malaysia processing facilities are still closed down, and they are bidding in tender on 2 production facilities in Texas, I believe. And so the interesting question there is you have Lynas tends to be more light rare earth as opposed to Northern Minerals is much more heavy rare earth. And so the question is going to be whether, in fact, you're going to focus more on the lights, the heavies, both, which would probably mean fairly extensive capital expenditures. And what time horizon you see as being able to process the first pound of rare earth if you were to get an order from, let's say, from Lynas tomorrow?

Well, look, again, early to tell, but it's my understanding that Lynas is -- the combination with COVID-19, but it's also my understanding that some of these radioactive streams, and I don't know all the details, in Malaysia, were creating some issues with some of the NGOs and whatnot. So look, we think that some of these materials, we're not -- we're being generalists at this point in time, and we will focus down on this in due course. But we think that there is a potential that depending on what -- how much you upgrade this material, like getting to a concentrate or whatnot, we could do probably fairly quickly if you go further down with more refined products, you are obviously talking more capital and more time. But we're just conceptually talking about being in a position to do some treating possibly in the next 12 to 18 months or so. That's kind of just conceptually. But I don't want to be held to that because as I said, it is early days. We don't want to overspeculate there.

Okay. But are you focused more on the heavy rare earths or the light rare earths? Because after all, what America needs really -- well, actually, not just America, but most of the western world are looking for rare earth processing for defense reasons as well as for magnets. So have you made a decision on that you're going to work more on the rare -- on the heavy side or on the light side?

We haven't made a decision. Paul, do you want to chime in here?

Yes. That's right. Because the decision whether you wanted to look at light rare earths or heavy rare earths depends what drives your separation technology and your process. We haven't gotten there yet because everything depends on -- we're still evaluating the back end. When I say the back end, that's a separation from the concentrate to final products, and there may be opportunities where others are doing the same where we can combine resources. We just haven't reached that decision point yet because it depends on economics and what it takes to get to those type of products or whether there is enough on the feedstock that would provide an economic outcome on that.

Okay. So one last question. Have you consulted with either the Department of Defense or, in general, with the U.S. government about financing for CapEx? And what kind of support have you been offered just to do a conversion of a line or to set up a process for this rare earth?

Go ahead, Paul.

We have talked to the U.S. government and Department of Defense and Department of Energy, people who work with the Department of Energy about this. There has not been made any commitments to doing any financing. I know there's money out there, there's the 5 determinations the President issued under Section 303 out there that provides ability to funding. But as of this time, right, most of the people who would be -- with the government who would be involved with these discussions are currently focused on the COVID-19 response that the government is having. So those -- we haven't advanced those discussions much beyond our initial discussions we've had with them last year.

Your next question comes from [ Mark Thomas ] with [ Moose Pass Mechanical ].

I think you answered my first question, and my first question had to do with the thorium in the ores, and I understand that you are capable of putting that into a repository for safekeeping. Is that correct?

Correct. Yes. No, we have -- it comes in -- the thorium is produced as a byproduct of the uranium recovery of -- as we recover the uranium off of these streams. And it does go onto our tailings impoundments for their license for byproduct material. And keep in mind, we already have -- there are significant thorium in our tailings already. So it's compatible with that.

Okay. And then are you familiar with the Rare Earth Cooperative Bill, S.2093? And do you have any responses to that?

Yes. So I'm familiar with it. I don't have much response. We've got to see if that bill is going to move. It looks like it's going to provide the best way for the U.S. to move forward on these critical minerals. With respect to the global -- the way competitive -- anticompetitive actions are being done by others in China, et cetera. But it depends on whether there's enough support to move that bill.

Okay. Yes. I know there's a few deposits of rare earths up here in Alaska that obviously contain thorium, and I think we got to deal with that on that level. So I know that bill addresses it by creating a thorium bank so I'm not -- I don't have a dog in the fight, but I'm definitely interested.

Can I -- before we switch to next question, I just want to make sure people know that the webcast we provide, the presentation, I know some people have trouble seeing it, will be provided on our website when this is done.

Your next question comes from Joniel Cha with S&P Global Platts.

I wanted to ask about the spot price of uranium because, as you noted in the presentation, we saw the spot price rise from $24 a pound in mid-March to $32 a pound now. And I was wondering whether you could comment on this price rise continuing and where you expect the price reaching in the coming weeks.

Well, the -- look, the price rise, as I said, is encouraging. Ultimately, the price of uranium has got to go up to the fair price of production, okay? It's been suppressed for a long time with, in many cases, excess of inventories. So if you really look at the fair price of uranium, and I mentioned in the presentation that we believe, $50-plus and $70 -- or $60, $70 a pound or greater for new projects, it needs to rise to those levels to be sustainable globally. There are some companies in the world that can produce for lower than that. But when you start looking at increases in demand or production, you need prices that are probably in the order of double what they currently are on the spot prices for sustainable production around the world.

That makes sense. Would you be able comment on when you expect that to occur?

That is a good question. I don't know. But look, if we -- if you go back to like 2006, 2007, supply disruptions really moved the price of uranium dramatically. It went from $15 or $20 a pound up to $130 a pound or something very quickly. When you had Cigar Lake going to water now, it's different right now with the COVID-19. I don't think this is going to be a long-term disruption. But you never know. There is always risk out there in the world, whether they're political risk, whether they're technical risk, we've seen what COVID is doing to the price of uranium right now. So you never know exactly how quickly these things can react, but we do need to get back to that sustainable pricing that I mentioned previously.

And you had previously mentioned about restarting Nichols Ranch and White Mesa Mill, and I was wondering how long it would take to ramp up production at these 2 facilities.

Look, we can -- and it depends, again, because of our facility is also very different. I mean we're still producing small quantities of uranium from alternate feed right now at White Mesa. But generally speaking, we need around a year or so to really kind of get some momentum going again on our properties because we've reduced staff over the years, and it takes time to rehire people and get equipment and people back in place and working together. So over the course of 12 to 24 months, we can be back in pretty significant production.

Okay. That sounds good. I appreciate. And just lastly, I understand that there is continued discussion about the $150 million budget item that the Trump administration had proposed earlier this year. I was wondering if you have any insights into ongoing discussions at Capitol Hill about this and how likely you expect that to be passed.

It's in for appropriations right now for the 2021 budget cycle. So how quickly does it get appropriated? We don't know at this point in time. Paul, do you want to add anything on that front?

I think you pretty much captured it. It's going through the appropriations process now. And given everything that's going on right now at governments, it's hard to say what the appropriations process will look like over the next few months. So we're -- we have -- there are people in Congress still pushing to try to get the uranium reserve program stood up and there's support from the White House. We just don't have any visibility as to exactly the timing or how that will be done.

[Operator Instructions] Your next question comes from Howard Brous with Wellington Shields.

Just as a follow-up. You have mentioned Navajo. The EPA has a $1.7 billion settlement with the Navajo Nation to alleviate a good number of the mines on Navajo territory. Have you, one, put in a bid on that? It's not one big sort of $1.7 billion. There are a lot of different pieces. But one, have you put any bid? Or is this something that's not an interest to you?

Yes. It's not really a settlement with the Navajos. It's a settlement with a number of the parties that had some of those properties back in the 50s, 60s and 70s. But we haven't been in a position to really bid on that, Howard. But as I said, we're looking at a pilot program in conjunction with the Navajos that we're very excited about, where the Navajos have a site identified, and we've offered to take material from that site, a limited quantity, for free to get that moving with the Navajos. And I think the key thing that the Navajos are frustrated about, Howard, is that there has been limited or no action by the EPA or the government to clean up those sites when this money is available. It's a very prescriptive environment that the EPA operates in when it comes to studying and studying these sites and how do you clean them up and how do you remediate. And the Navajos want to see some action. So we're trying to do everything possible to provide an option that is immediate. We can take material from the Navajo Nation right now, and we're currently doing it from that one project that I mentioned in New Mexico.

All right. Last but not least, is it a correct understanding that the uncovered pounds for 2021 through '25 is in excess of 80 million pounds, talking about the utilities? That's [indiscernible].

I don't have those numbers in front of me, Howard. But every day that goes by there's more uncovered pounds.

Fine. We'll do this off-line.

Yes. We can -- feel free to call me and we can talk more updates on that. Okay.

There are no further questions at this time. Please proceed.

Okay. Well, look, I just want to once again thank everybody for joining us for this call. We're very excited about all these opportunities in front of Energy Fuels. The rare earth is new to us. But as I said, we think we can really add a unique opportunity for those who want to partner with us. Anyone that wants to talk to us at more length about that, you're welcome to contact myself or Paul Goranson at any time. And as I said, we will report back to our shareholders in the market as we get more information. And -- but I really appreciate the interest that people have shown in this area and with our core business, which is, first and foremost, uranium. So thank you very much, and have a good evening.

Ladies and gentlemen, this concludes your conference call and webcast for today. We thank you for participating and ask that you please disconnect your lines. Have a great day.