Energy Fuels (NYSE: UUUU) CEO Mark Chalmers on Today’s Vanadium Update: Commercial Production, Shipments, Purity & Margins

February 12, 2019

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Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the President and CEO of Energy Fuels (NYSE: UUUU)(TSX: EFR), Mr. Mark Chalmers. Mark, how are you this morning?

Mark Chalmers: I'm excellent, Gerardo.

Gerardo Del Real: Well, thank you for taking the time. We were talking a bit off air, and I was interacting on Twitter with a gentleman. His handle is @airic101, and he was asking, his exact comment was, "I wish they would announce that they are selling, or even better a contract." And sure enough he was referring to the vanadium.

And just this morning you had some news, which was timely. You're producing vanadium at commercial levels, and vanadium shipments have commenced. So, I thought I would reach out. I thought we would address the question, and no better way than to get it straight from you. Right?

Mark Chalmers: Yeah. Look, we're ready to sell vanadium as soon as we can as well, too. But as I said earlier, the trucks are rolling, we're building up inventory at the sites. Generally speaking it's very difficult to get any kind of longer term contract on vanadium. But we've also been watching the price of vanadium. It went up to nearly $30 a pound later in 2018, then dropped off like a rock down to around $15.50, but it's recovering slowly. So, we're trying to balance the production, the quality, which we've done in looking for that right price to start selling the product.

Gerardo Del Real: Excellent. I imagine behind the scenes that you've had several discussions with potential customers, yes?

Mark Chalmers: Yes. We're talking to a number of different customers, and I think they're very excited about the product. It's greater than 99% V205, very low impurities. And so, we're just really getting ourselves re-established as a vanadium producer. We have last produced vanadium about 2013. That wasn't that long ago, but we're the current new emerging producer particularly in North America.

Gerardo Del Real: You mentioned in the release that you're looking and expect to sell into other industries that demand the higher purity product. Can you speak to that a bit?

Mark Chalmers: Well, you can get a premium for the really ultra-high-purity vanadium product. I can't talk in detail yet because we want to get a bit more information on that. But we know we're producing a very, very quality product right now. Certainly meets the metallurgical standards without a doubt, but it is also pure enough that it can go into some of these other specialty markets.

Gerardo Del Real: How are your margins, Mark, at current price levels?

Mark Chalmers: We've got very good margins. We haven't come back and informed the market exactly what our costs are. But when we started this project about a year ago to start the mill back up, the prices of vanadium were in that mid-teen range and we believe we had some very good margins at that time. And so here we are with the price north of $15, up $17, $18 a pound. So, our margins are very good. Very solid margins, but we want to get another few months of production under our belt before we come back and start saying what our costs are.

Gerardo Del Real: Excellent. Lastly, I know that you're undergoing the vanadium test mining program at the La Sal complex. How is that coming?

Mark Chalmers: It's going very, very well. We're very excited about it. And again, we're getting some of the final information there, but we think that the test mining was very worthwhile. We are changing the paradigm how we're mining, focused on vanadium rather than uranium using these portable XRF analyzers. And we think that's a real key element, in addition to recovering vanadium from the ponds at White Mesa, this test run, we believe, is going to help us with sustainability of our vanadium mining and our uranium mining at those mines around the middle in the future.

Gerardo Del Real: Fantastic. Mark, thank you so much for getting back to me so quickly. I get the feeling that we're going to be chatting here in the next couple of weeks again.

Mark Chalmers: We certainly will.

Gerardo Del Real: Thank you.

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