Energy Fuels aims to double uranium output

Energy Fuels (NYSE: UUUU; TSX: EFR) says it’s preparing to start production at two more uranium mines in Colorado and Wyoming that could roughly double the company’s yellowcake output in a year. 

If market conditions remain robust, the Whirlwind and Nichols Ranch mines could potentially elevate Energy Fuels’ annual uranium production to more than 2 million lb. of uranium oxide, also known as yellowcake, as early as next year, the company said in annual results on Friday. 

In December, the Denver-based company started production at Pinyon Plain in Arizona, and La Sal and Pandora in Utah. Annual uranium production should hit 1.1 million lb. to 1.4 million lb. this year once these three mines fully ramp up, the company said. 

“We hold a bullish long-term view of uranium prices, and we are investing to boost production,” Energy Fuels president and CEO Mark Chalmers said in a release. 

Uranium prices have hit US$102 a lb. this month while the resurgence of nuclear power continues to gather pace as a greener alternative to fossil fuels. Investors are also pricing in yellowcake supply shortages from some of the industry’s largest producers, such as Cameco (TSX: CCO; NYSE: CCJ) and Kazatomprom (LSE: KAP). 

More exploration

Energy Fuels said it plans to conduct exploration drilling on its Nichols Ranch area properties in Wyoming and underground delineation drilling at Pinyon Plain.

Moreover, the company stated it intends to advance permitting on its large-scale Roca Honda in New Mexico, Sheep Mountain in Wyoming, and Bullfrog properties in Utah for additional uranium production.

The company swung into a record profit of US$99.9 million last year from a loss of US$59.9 million in 2022, it said. It sold 560,000 lb. of uranium last year for about $60 per lb., yielding total gross profits of US$17.96 million and a 54% gross margin. It also sold the Alta Mesa in situ recovery project in Texas for US$119.3 million. 

“As long as market prices remain strong, we will continue to selectively capitalize on spot market sales opportunities as we ramp up our production in 2024 and beyond, all with limited capital,” Chalmers said.

“We have become one of the few profitable non-state-owned uranium mining companies globally,” he said. Energy Fuels entered an “exclusive club” when it reported last year’s profit of nearly US$100 million, he added. 

Shares of Energy Fuels gained 5% to $8.48 apiece by mid-afternoon Monday trading in Toronto, valuing the company at $1.4 billion. They’ve traded in a 52-range of $6.70 to $12.17.