Energy Fuels Inc. (EFR:TSX; UUUU:NYSE.MKT) reported its financial results for the second quarter of 2017 on Aug. 3. The company announced $34.2 million of working capital, with cash and equivalents of $18.7 million and approximately 370,000 pounds of uranium concentrate. During the quarter, the company sold 300,000 pounds of U3O8 at an "average realized price of $50.14 per pound."
Rob Chang, an analyst with Cantor Fitzgerald, found the results positive, noting in an Aug. 8 report that "Q2/17 revenue of $17.9M beat our forecast due to an earlier than expected contract delivery of 300,000 lbs."
Looking ahead, Chang stated that "FY/17 uranium production guidance has been upheld at between 640,000-675,000 lbs while sales guidance of 160,000 lbs for the remainder of the year is in-line with our expectations after adjusting for the earlier than expected delivery in Q2. . .a new NI 43-101 resource estimate for the Canyon Mine is expected during Q3/17. The expectation is for an increase in both the uranium and copper resource."
Chang stated that "EFR remains our top leverage pick to the expected uranium price recovery as the company has several assets that are within 1-2 years of production once the decision is made to start/restart them. That will allow the company to quickly respond to what we expect to be a violent uranium price spike as utilities seek to secure long term contracts to replace those that are rolling off."
Cantor Fitzgerald is maintaining a Buy recommendation and increased its target price to CA$4.25 from CA$4.05. Energy Fuels' shares are currently trading at around CA$2.14.
Rodman & Renshaw analyst Heiko Ihle reiterated in an Aug. 4 report the firm's "Buy rating and $5.00 per share price target on Energy Fuels." He noted that "due to continued weak spot uranium prices, we expect a deliberate drop in production to 650,000 pounds in 2017. We note that this is sufficient to meet higher-priced, long-term contractual obligations for the year. Although the uranium market has remained depressed as a whole, we feel that Energy Fuels has accumulated a strong combination of both conventional and ISR projects, and that this portfolio of assets should provide investors with strong leverage to an increasing uranium price environment going forward."
Ihle also noted that Energy Fuels' Canyon Mine resource evaluation program continued in the second quarter, "identifying additional high-grade uranium and copper mineralization. The program has resulted in multiple high-grade discoveries through the significant underground development and core drilling that has taken place. Given the positive results thus far, we expect the new resource estimate to add substantial uranium and copper resources."
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Additional disclosures about the sources cited in this article
Disclosures from Cantor Fitzgerald, Energy Fuels Inc., Company Update, Aug. 8, 2017
Potential conflicts of interest: The author of this report is compensated based in part on the overall revenues of CFCC, a portion of which are generated by investment banking activities. Cantor may have had, or seek to have, an investment banking relationship with companies mentioned in this report. CFCC and/or its officers, directors and employees may from time to time acquire, hold or sell securities mentioned herein as principal or agent. Although CFCC makes every effort possible to avoid conflicts of interest, readers should assume that a conflict might exist, and therefore not rely solely on this report when evaluating whether or not to buy or sell the securities of subject companies.
Disclosures as of August 8, 2017: CFCC has provided investment banking services or received investment banking related compensation from Energy Fuels Inc. within the past 12 months.
The analysts responsible for this research report have, either directly or indirectly, a long or short position in the shares or options of Energy Fuels Inc.
The analyst responsible for this report has visited the material operations of Energy Fuels Inc. including: White Mesa Mill, Pinenut Mine, Canyon Mine, Daneros Mine, Pandora Mine, Energy Queen Mine, Henry Mountains Mine, Nichols Ranch, Hank, and Jane Dough. No payment or reimbursement was received for the related travel costs.
Analyst certification: The research analyst whose name appears on this report hereby certifies that the opinions and recommendations expressed herein accurately reflect his personal views about the securities, issuers or industries discussed herein.
Rodman & Renshaw, Energy Fuels Inc., Earnings Update, Aug. 4, 2017
I, Heiko F. Ihle, CFA , certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analyst’s household has a financial interest in the securities of Energy Fuels Inc. (including, without limitation, any option, right, warrant, future, long or short position).
As of July 31, 2017 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Energy Fuels Inc.
Neither the research analyst nor the Firm has any material conflict of interest in of which the research analyst knows or has reason to know at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.
The Firm or its affiliates did receive compensation from Energy Fuels Inc. for investment banking services within twelve months before, and will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.
The Firm does not make a market in Energy Fuels Inc. as of the date of this research report.