Categories: Energy
Topics: General Energy

Energy Fuels (NYSE: UUUU) VP Curtis Moore on Going Debt-Free & Government and Private Sector Opportunities in the Uranium and Rare-Earths Sectors

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the VP of Marketing and Corporate Development for Energy Fuels (TSX: EFR)(NYSE: UUUU), Mr. Curtis Moore. Curtis, it's been a bit. How are you?

Curtis Moore: I'm doing well, Gerardo. It has been a bit. Great to catch up with you.

Gerardo Del Real: Let's get right into it. You had some news today which was very well received. You announced that Energy Fuels is now debt-free. You were keen to include in the headline that this is unique in the uranium sector. Can you provide some details? How'd you get here? Then let's talk about some of the many things going on.

Curtis Moore: Yeah, happy to. We're extremely excited to be debt-free. Back in 2012, we incurred some debt. It was $22 million Canadian, which with the exchange rates, about $16 million that we were paying about 8.5% interest per year on that. That contributed to money we had to spend every year. Over the last year we decided we're going to do what we can to retire that debt. What we were doing is that during up days we were hitting our ATM a little bit to raise money to pay that debt off. We did that and we've been able to raise enough money to pay it all off. 

Today is the culmination of all that, where we are now debt-free. That does distinguish us from several other, not just uranium companies, but other natural resource companies that are actually incurring more debt. We think that puts us in a highly beneficial position.

Gerardo Del Real: It also distinguishes you from every single government in the world right now.

Curtis Moore: Very true, very true.

Gerardo Del Real: Let's talk government because, as much as I like to throw jabs at them, there are, as you highlight in the release today, a number of opportunities that could result in significant cashflow, not just in the uranium space, but we've talked rare earth elements before, we've touched on vanadium. There is definitely bipartisan support from everyone that I speak with in the US Government to establish a more forceful domestic supply chain and a bigger presence. Obviously, we're very dependent here in the US for most of our energy needs. What can you tell me? What are you hearing out there, Curtis?

Curtis Moore: Yeah, you're exactly right. On the uranium side, there is bipartisan support for the creation of a US uranium reserve, quite a bit like the strategic petroleum reserve that we have in the US. The government would like to create a strategic uranium reserve. Now it does take funding and it takes appropriations, so we're working with our allies in Congress to get this done. You all know that the politics seems to be dominated by the election that's coming up and appropriations are a little bit dysfunctional these days. But we're hopeful that our allies in Congress are able to put this through. In the grand scheme of things, the money that's required to create this reserve is a pittance. We're talking $150 million per year, which to the US government is nothing. To us it would be a game changer.

Energy Fuels is the largest uranium producer in the United States. We have more capacity than any other company, more in-ground resources than any other company, more expertise, a proven track record. We think that we will be one of the main beneficiaries of that. As you alluded to as well, there's a lot of support for other critical mineral initiatives. Trump put out an executive order last week on critical minerals. We're hopeful that that does result in some good, tangible support not just for uranium, but also rare earths and vanadium.

Gerardo Del Real: There are reports associated with that executive order that are due, I believe, here within the next 45 to 60 days. Is Energy Fuels involved at all, if you can say, in the discussions with the people that you're familiar with in government to contribute?

Curtis Moore: Yeah. We are certainly getting onto the radar screen of everybody in government, not just on uranium but also on rare earths. I think that the important thing to realize in rare earths is that a lot of rare-earth feeds, ores that come out of mines or other feeds, they have uranium in them or they have thorium or they have radionuclides in them. Those need to be handled and those need to be removed or recovered before those rare-earth concentrates can go on for further processing. That's really the role that we think we can at least initially play is to process these rare-earth feeds, remove the uranium and recover it and sell that into the nuclear fuel cycle, but then produce a rare-earth concentrate that can go on for further separation.

We don't have any separation capabilities in the United States, but hopefully we do in the next few years. That would be certainly a place for us to send this concentrate. But again, we think that we can take the initial sort of baby steps toward re-establishing some semblance of a rare-earth supply chain in the United States. A lot of these other proposals out there, particularly in the government, they're going to need a facility like White Mesa to process their feeds and recover the uranium and dispose of the thorium and that sort of thing. So that's really the role that we think we can play right off the bat.

Gerardo Del Real: Correct me if I'm wrong, but it sounds like Energy Fuels has multiple options when it comes to rare earths, right? It sounds like you have private sector options, but obviously you also have the government option there. It's interesting to me that you have to be behind the scenes entertaining several ways to monetize in the most efficient way, the unique position that Energy Fuels is in, in regards to processing both uranium and the rare earths.

Curtis Moore: It's true. I'll say what we're doing is that we are approaching this commercially first and foremost. We're going to go into rare earths on a commercial basis. We're hopeful that once we show everybody what our capabilities are, then some other government funding might come our way and they might see that, "Hey, these guys are actually making it happen and they've actually made it work. Maybe these are the guys that we should be backing in trying to help bring these capabilities back to the United States." So we're kind of in a “prove it” mode, I guess you can say. We're going to go prove to the world that we can do it and hopefully that funding comes our way. 

We've even gotten a little bit of funding just recently from the government. We made an announcement a couple of weeks ago that we're working with the Department of Energy and a team from Penn State University on producing rare earths from some coal-based resources. This is like coal ash and some of these coal byproducts that have rare earths in them. There's some technologies that the DOE and others have been working on to concentrate the rare earths in that. Well, those minerals that they concentrate are going to need to be processed somewhere. They have uranium and thorium in them. The natural location for that would be the White Mesa mill. So again, I think that you're right. We have lots and lots of options both commercially and through the government to make a splash in rare earths.

Gerardo Del Real: Let's talk uranium a bit. The uranium bull market that we've all been expecting has long eluded us. I thought 2020 would be the year. I realize we have a quarter left, right? But I thought this would be the year where the utilities stepped off the sidelines. Do you see any indications that there is more chatter from the utilities or do you think that they're still content to just kind of sit back?

Curtis Moore: I'll be honest. I have not seen a whole lot recently. I would have thought that we'd have seen something by now. There has been still some uncertainty out there. We just saw that the Russian suspension agreement was signed just yesterday, I believe. The nice thing about the RSA being extended is that it sort of averts a disaster. If we had seen unlimited Russian uranium coming into the United States, in the scenario where there was no RSA extension, that would have been really damaging to us. That certainly sets the stage for a recovery, but there's still lots of Kazak and Uzbek and other uranium coming into the United States. We haven't seen a whole lot from utilities at this point.

We'll see what happens. We've also understood that their fuel teams have been sort of holed up due to COVID and what not. But the bottom line, though, is that the supply and demand fundamentals continue to be out of whack. We've seen tens of millions of pounds of uranium removed from the global market this year due the COVID shutdowns. At some point and at some level, that's going to take effect and that should result in higher prices. We'll see if and when that happens, but in the meantime we're working on some other initiatives that hopefully generate cashflow at the same time. So we'll see.

Gerardo Del Real: Curtis, thank you for the update, a thorough one. I look forward to having you back on as soon as you are able to say more. Stay tuned right?

Curtis Moore: Yep. Stay tuned. Appreciate it, Gerardo.

Gerardo Del Real: Thank you. Bye now.

Curtis Moore: Bye.