Energy Fuels (TSX: ERF)(NYSE: UUUU) VP Curtis Moore on Game Changing Rare Earth Partnership

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the Vice President of Marketing and Corporate Development for Energy Fuels, Mr. Curtis Moore. Curtis, how are you this morning?

Curtis Moore: I'm doing great, Gerardo. How are you?

Gerardo Del Real: I am well. Thank you for asking. You and I chatted about a month or two ago, and our interview was premised around solving the domestic rare earth puzzle. You had some news recently that really, really has captured the market's attention. And I would love for you to do it justice because I will not. But congratulations. It's game-changing news in the rare earth space for the US, for Europe and a lot still to come, from what I understand.

Curtis Moore: Yep. Absolutely. Absolutely. Thanks for having me on, Gerardo. And yeah, we are absolutely thrilled with the announcement we were able to make yesterday, where basically what we announced is the creation of a new rare earth supply chain in the United States and Europe. And what's exciting as well is that this is a supply chain that is decoupled from China and Russia, the traditional big players in the rare earth industry. And yeah. Hopefully people will understand the magnitude of what we've been able to accomplish, where we get this material called monazite from Chemours in Georgia. We process this monazite into a rare earth carbonate at our White Mesa Mill in Utah. And at least for the next couple of years, we're going to ship this material to a separation facility in Estonia that has been able to produce value added downstream rare earth products for both US and European markets. So yes, this is very, very important news.

Gerardo Del Real: I think it's important to note that the announcement is an initiative with Neo Performance Materials. Correct?

Curtis Moore: Correct. Correct. Yes.

Gerardo Del Real: Excellent. The second part to it, let's talk about the scale of the production. I understand that this is very scalable and so you're starting off relatively small, but it looks like this can be scaled out pretty aggressively, assuming that you're successful. And of course, we know in the rare earth space the metals are higher. We know that geopolitically there's a scramble around the world to establish domestic rare earth in critical metal supply chains. Talk to me about the scalability of it.

Curtis Moore: Yeah, absolutely. Yes, you are correct. This is small, at least initially. Which we've never done this before and so we're pleased to be able to start off small and not get overwhelmed by all this. So what we're doing is we're going to be buying about 2,500 tonnes of this monazite mineral from Chemours per year for the next three years. And what we're able to do with that material is that ... Monazite is probably the best rare earth mineral available out there in the world. It's already mined at a number of facilities all over the world right now, including in the Southeast United States. And it's so valuable because it has, number one, this monazite we're acquiring has between 50% and 60% total rare earth content. It has a lot of the neodymium and praseodymium, the NDPR, that is needed for these rare earth permanent magnets. It also has excellent distributions of the heavy rare earths.

The problem, I'm putting air quotes there, is that monazite has uranium in it and some other radionuclides. And so you need special licenses and special capabilities to handle this monazite. Well at Energy Fuels, in our White Mesa Mill in Utah, we have a 40 year history of recovering uranium and handling these radionuclides. And so we really only went down this path about a year ago. I hope people appreciate the speed with which we've been able to put this thing together. We announced in April that we were going to be entering the rare earth space. And here we are, not even a year later, and we've already created a little rare earth supply chain.

And in terms of scalability, we are starting small. But it is very scalable. Our initial plan, our goal would be to increase our quantities of monazite from 2,500 tonnes per year to about 15,000 tonnes per year. And to give you some perspective the capacity of the White Mesa Mill is to process a 720,000 tonnes of material per year, uranium ore per year. So again, 15,000 tonnes per year does not make us nervous at all. We have plenty of capacity at the mill. And again, some additional perspective, that 2,500 tonnes actually contains about 8% or 9% of current total US rare earth demand. So a little bit of Monazite goes a long way. So 15,000 tonnes would gives us about 50% of current US demand. So again, this is extremely scalable. Neo has capacity at their facility in Estonia. So yes, this has a lot of room to grow. But again, we have to produce commercial quantities of this rare earth carbonate. We have to do that successfully. So far, so good. But we're happy to have the opportunity to scale up.

Gerardo Del Real: Impressive work, Curtis. Walk me through how things are coming along in the uranium side of it. Obviously speculators have been attracted to this sector for quite some time, but are finally being rewarded for that patience. Most of the uranium equities have taken off recently. Energy fuels, of course, no exception. How are things coming along with that part of the business, which is of course the flagship?

Curtis Moore: Yeah. Yeah. Absolutely. And again, yeah, I don't want anybody to think that we're jumping ship and becoming a rare earth miner. Our core business right now is uranium. Now look, if everything goes well ... And just a couple more comments on rare earths. Our longer term plan, and it's not that long, we're thinking in the next two or three years, we'd like to build out some rare earth capabilities at the White Mesa Mill, like a separation, metals, alloys, powders, some of these other value added products at the White Mesa Mill. And if we're successful in doing that, we might be a uranium and rare earth miner, a business 1A and 1B for us.

But again, yep, uranium is on a nice little run right now. I do think that there is an increasing awareness in the markets out there of the supply and demand imbalance and hopefully the higher prices that are coming. They still have not yet manifested, but I think that people are seeing the opportunity right there. And honestly, I'm not even sure we're getting credit for our rare earth business. I'd like to think we are because we've lept ahead. We think of anybody in the United States and nobody else in the US is doing what we're doing in rare earths. So I think, again, the uranium equities are doing quite well. But man, this rare earth thing is extremely exciting to us, obviously.

Gerardo Del Real: Well, there's companies that are based in the US that have market caps trading at multiples of Energy Fuels’. So it's impressive the speed with which you were able to put this business together. I'm excited to see the execution. Anything else to add, Curtis?

Curtis Moore: Yeah. I think there's going to be much more news to come here. We think we're going to be some of the lowest costs rare earth production in the world, simply because we're using existing facilities. We don't need to go permit and build a new mine. We don't need to permit and build a new crack and leach facility, which is what we're using the White Mesa Mill for. We'll have to probably invest some capital for separation and some of these other downstream value adds. But there is a lot of potential value there, especially with the increasing rare earth prices that we're seeing. So yeah, I think stay tuned. There's a lot more to come with this rare earth story.

Gerardo Del Real: You said that last time we chatted. Obviously game changing new since then. So I'm looking forward to having you back on and looking forward to the news.

Curtis Moore: Absolutely. Happy to come on any time.

Gerardo Del Real: Thanks, Curtis.

Curtis Moore: You're welcome.