EFR record net income/earnings per shareENERGY FUELS ANNOUNCES 2023 RESULTS: RECORD NET INCOME AND EARNINGS PER SHARE, URANIUM PRODUCTION RAMP-UP, AND NEAR-TERM PRODUCTION OF SEPARATED RARE EARTH ELEMENTS.
Financial Highlights:
Record Annual Net Income of Nearly $100 Million: During the year ended Dec. 31, 2023, the Company earned net income of $99.76 million, or $0.63 per common share.
Robust Balance Sheet with Over $220 million of Liquidity and No Debt: As of Dec. 31, 2023, the Company had $222.34 million of working capital (versus $116.97 million as of Dec. 31, 2022), including $57.45 million of cash and cash equivalents, $133.04 million of marketable securities (uranium stocks and interest-bearing securities), $38.87 million of inventory, and no debt.
Nearly $45 Million of Additional Liquidity from Market Value of Inventory: At current commodity prices, the Company's product inventory has a value of approximately $76.10 million, while the balance sheet reflects product inventory carried at cost of $31.16 million.
Uranium Drives Revenue: Revenue was comprised of (i) sales of 560,000 pounds of uranium concentrates ("U3O8 ") for $33.28 million, which resulted in a gross profit of $17.96 million and an average gross margin of 54%; (ii) sales of 153 metric tons ("tonnes") of finished high purity, partially separated mixed rare earth carbonate ("RE Carbonate") for $2.85 million; and (iii) sale of 79,344 pounds of vanadium ("V2O5 ") for $0.87 million.
Alta Mesa Sale Funds Investment in Uranium and Rare Earth Production: The Company realized a gain of $119.26 million on the sale of the Company's Alta Mesa in situ recovery project in Texas (the "Alta Mesa Sale") and Prompt Fission Neutron Assets that were used exclusively at Alta Mesa. The cash received from the Alta Mesa Sale helped to fund expenses associated with (i) preparing three (3) of our uranium mines for production and (ii) developing commercial rare earth element ("REE") separation capabilities.
Well-Stocked to Capture Market Opportunities: As of Dec. 31, 2023, the Company held 685,000 pounds of finished U3O8, 905,000 pounds of finished V2O5, and 11 tonnes of finished RE Carbonate in inventory. The Company holds an additional 436,000 pounds of U3O8 as raw materials and work-in-progress inventory (for total finished, raw material and work-in-progress inventory of 1.12 million pounds of U3O8), along with an estimated 1 - 3 million pounds of solubilized V2O5 in tailings solutions that could be recovered in the future. In December 2023, the Company purchased 100,000 pounds of U3O8 and 480 tonnes of monazite from third parties.
Capitalizing on Strong Uranium Pricing:
During the year ended Dec. 31, 2023, the Company sold 560,000 pounds of U3O8 for $33.28 million or a realized budget. In late-2023, we announced that we had begun ore production at our Pinyon Plain, La Sal, and Pandora mines. We currently expect to process ore from these conventional mines, along with alternate feed material recycling, at the Mill in the latter half of 2024. As a result, we intend to produce approximately 150,000 to 500,000 pounds of uranium during 2024 from both newly mined conventional ore and stockpiled alternate feed materials, increasing further in 2025, depending on the timing of the ramp up of production at the Company's Pinyon Plain, La Sal and Pandora mines."
"Looking further ahead, we are preparing two additional mines for production (the Whirlwind mine and the Nichols Ranch ISR Project), which have the potential to increase Company-wide production to a run-rate of about two million pounds of uranium per year by 2025. At the current time, only about 25% to 30% of our short-term, low-cost production is committed to contracts, and our contracts maintain some exposure to market prices. As a result, most of Energy Fuels' future uranium production is exposed to further market upside at this time. We are also planning an exploration drilling program on our Nichols Ranch Project and an underground delineation drilling program at our Pinyon Plain mine to increase our resources at those projects as well as advancing permitting efforts at three of our large-scale uranium mines, which could increase Company-wide production to a run-rate of up to five million pounds of uranium per year in the next several years."
Turning to the Company's REE opportunities, Chalmers noted, "Even as we capture today's opportunities in uranium, we are also advancing our REE initiatives. With relatively minimal capital expenditures, we are now positioned to capitalize on this potentially high-growth market. We believe now is the right time to secure a strategic position in the REE space, since REE prices are at relatively low levels, and because our unique ability to process radioactive ore at the Mill gives us a durable competitive advantage. We plan to commission our new NdPr circuit at the White Mesa Mill during Q2-2024 and produce about 25 - 35 tonnes of NdPr oxide, and are seeking to secure low-cost sources of monazite to feed current and future rare earth oxide crack-and-leach and separation circuits. We will not make major capital expenditures on any projects unless the REE economics build shareholder value. We are very excited about the long-term opportunity in REEs, especially because it is complementary to our uranium efforts, and does not diminish our short-, medium-, or long-term uranium opportunities."
Chalmers concluded, "Energy Fuels is taking a unique and attractive path in the critical minerals business. Unlike other companies, who are reliant on only uranium, Energy Fuels is taking a broader view of the critical mineral industry and is producing the materials necessary to power the energy transition. Over time, our intent is to build a multi-product, high value commodity portfolio, centered on uranium, that earns long-term, sustainable, and high-margin cashflows. I am excited to see our plans develop further in 2024."