UUUU - AMEX

Good morning. My name is Andrew, and I will be your conference operator today. At this time, I would like to welcome everyone to the Energy Fuels Fiscal Year 2024 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator's Instructions]. Thank you. Mr. Chalmers, you may begin your conference.

Thank you, Andrew, and good morning to those listening to the call today. My name is Mark Chalmers, President and CEO of Energy Fuels. And today, I am delighted to highlight Energy Fuels remarkable accomplishments during 2024, which we believe has created the leading U.S.-based critical mineral company. I'm also excited to talk about our goals, guidance and aspirations in 2025 and beyond. Many of you have heard me say many times, there is no other company in the world like Energy Fuels. Today, that is more true than ever before. Energy Fuels is building a global critical mineral powerhouse. And the progress we made in 2024 is extraordinary. We are building this business around our core uranium business, leveraging our permits, infrastructure, excess processing capacity and most importantly, our talented and creative workforce. Over the course of the past year, we have resumed commercial uranium production, secured world-class critical mineral assets and commercially recovered separated rare earth elements, which some of our naysayers said was not even possible. While this has caught some people off guard and a diminishing group of naysayers remain, that is fine. We will continue to pursue our creative accretive strategy as it simply makes so much sense that it has become obvious. We are on the verge of generating significant cash flows and margins in the next couple of years and emerging as the leading low-cost, large-scale Western producer of several critical materials that are central to energy, defense, technology and mobility. Today, I will be joined by Dave Frydenlund, our Executive Vice President and Chief Legal Officer; Nate Bennett, our Interim CFO and Chief Accounting Officer; and Curtis Moore, Senior VP of Marketing and Corporate Development to assist with any questions that you may have at the end of the presentation. Replays of this presentation will be available shortly, perhaps even as early as today. And Kim or we will be controlling the slides, you will not be controlling the slides, but I'll try to remember to tell Kim when to advance the next slide. So let's get going with the presentation. Next slide. On Page 2, I may be making some forward-looking statements and those are highlighted on this page that is included with the presentation. Next slide. I want to talk about our high-value sequence here. One of my slides was out a slide. So look, let's talk about Energy Fuels. Really, an investment in Energy Fuels is you are getting three companies in one. We are building a globally significant critical minerals company. We have built this around our significant U.S. significant leading U.S. uranium production. We have produced uranium for the last decade or two or three with our assets, but we've never been world significant. But when you look at these two other portions of our strategy, we will be world significant with rare earth production and world significant with the heavy mineral sands production. And that, in turn, makes a world significant company in due course with multi-elements being produced and our timing is impeccable. Next slide. Let's talk about our high-value product lines. These are all in-demand materials central to energy, defense, mobility and health. Uranium, as I mentioned before and many of you are aware of, we have been a leading producer of uranium for a long period of time and we are now in large-scale production. Currently, we have three producing mines, and we expect to have newly mined production of 1.73 million to 1.17 million pounds of contained uranium in 2025, subject to market conditions. This does not include up to 200,000 pounds of additional alternate feed materials and third-party ore purchases, so you can add up to another 200,000 pounds on top of that. We expect to sell under contract between 200,000 to 300,000 pounds in 2025 and we will also be looking at potential spot sales as prudent as the market strengthens. Inventory, we have nearly 400,000 pounds of finished uranium already on the ground at the end of '24, and we have over 700,000 pounds of contained uranium and ore and other raw materials to be processed. By the end of 2025, we expect to hold between 1.6 million to 2.3 million pounds of uranium that will either be finished or in inventory yet to be processed. And I want to comment on this because I think some people do not understand the flexibility that we have at Energy Fuels because with the White Mesa Mill, we can have newly mined ore, we can have alternate feed that we processed for many decades. We can have mine cleanup ore. We can have pond return. And we can process that, we can mine it, we can store it at the mine, we can ship it to the mill. We can store it at the mill in stockpile. We can process some of that in a mixture. We can process just newly mined ore, add alternate feed or other sources. So one of the things I want to highlight is that, that has been a key success to Energy Fuels over decades because we had that flexibility. So you can't compare it just to an ISR mine, other mine because no one else has that flexibility. So rare earths, we are a leading producer of Rare Earths in the United States and not many people can say that. We're now in early-stage commercial production. We have the capacity to produce up to 1,000 tonnes of NdPr per year. We produced 38,000 kilograms of on-spec NdPr in 2024. This material is now being tested and qualified by non-China Rare Earth metal and magnet manufacturers to support future sales and offtakes. And that is going very well. And I hope to have further updates to the market in due course. We also have the potential to go back into -- even though we're currently processing uranium at the mill, we have the ability to go back into commercial production of NdPr either this year or in '26, subject to mill schedule market conditions and supply of feedstock. On the heavy mineral sands front, we are advancing three material mining projects right now, and that is a big part of our story in 2024 and going forward. Mines world-scale, world-class projects in Madagascar, Australia and Brazil. Medical isotopes, we are continuing to do our research and development on the recovery of radium and radium is put into solution when we're processing our uranium ores or some of our rare earth feeds. Vanadium, we're still the largest primary producer of vanadium in the United States, and we can respond quickly when markets support this. Next slide. So let's talk about 2024, which was a fundamental building year, again developing low-cost Tier 1 critical mineral assets while maintaining a very strong balance sheet. We had a net loss in 2024 of $48 million, but that really is somewhat misleading because that was driven by transaction costs and the combination with primarily base resources, which was also offset by uranium sales. We sold 450,000 pounds of uranium for a gross profit of $21 million at a margin that was north of 50%, and we sold it through a combination of contract sales and spot sales that averaged around $84 per pound, which is a better result than a lot of our peers. We also sold approximately $40 million of heavy mineral sands products, which includes ilmenite, rutile and zircon. We had one-off transaction cost of over $10 million, and as I mentioned, related to the acquisition of Base and the formation of the Donald joint venture project with Astron. Some of our recurring costs and additional operating costs were higher with the acquisition of Base and the reclamation of the Kwale project in Kenya that came to a close at the end of December of '24. We also purposely elected to not sell uranium during Q4 due to weak prices. That all contributed to the loss. We still have excellent liquidity with over $178 million at current commodity prices made up of cash, cash equivalents, liquid marketable securities, uranium and other receivables and inventory. We have, as I said earlier, 400,000 pounds of finished uranium. We also have 900,000 pounds of vanadium and we have some mixed rare earth carbonate and 38,000 kilograms of finished separated NdPr in inventory. No debt. We probably have $1 billion worth of assets plus. We also raised $60 million of cash on our ATM from the beginning of the year through February 14 at an average share price of $5.34 per share. This is to ensure we have plenty of cash to advance our Tier 1 mineral assets that we're currently really not getting valued in the market. Next slide. So let's look at the diversified asset portfolio that we have put together over the last few years. Certainly, in the Northern Hemisphere is mainly our uranium assets, most of which or a number of which are permitted. We're headquartered out of Denver. We have the White Mesa Mill that can process the uranium and the rare earths. And that is really the area where we have our hydrometallurgy skills in the Northern Hemisphere. And now with the combination of Base in the Southern Hemisphere, we have an office in Perth, and we have a full management team to advance our heavy mineral sand goals and recover monazite in due course that are focused on physical metallurgy and are currently advancing two FID, final investment decision processes, advancing those on the world-class Toliara project and Donald joint venture in Victoria. So we have a complete team of people advancing those projects right now. Next slide. So we put together this graphic to kind of illustrate how it all works from a structural perspective. I mean, currently, we are processing uranium ore, and we can also process where we're processing vanadium ores as well to from multiple uranium projects. It goes through the White Mesa Mill, and we can produce U308, V205 if we like to recover it and potentially medical isotopes. That same mill, because we retrofit it to be able to also process rare earths can stop processing uranium ores and process monazite that contains uranium to advance and recover uranium and rare earth oxides. This is remarkable that we have a facility that can process both these ore streams at the mill, and we're able to build that for about $20 million. Now the mineral sands down at the bottom in the orange really doesn't touch the mill at all with the exception of recovering the monazite, which can be processed through the Phase 1 plant at the mill. Now our Phase 2 initiative, which is building an entire separate brand new rare earth processing facility will be separate from the center of that graphic because we will be able to have a completely separate uranium processing facility and a completely separate rare earth processing facility looking to the future. Now on the far right, you have multiple different materials and elements that can be processed through our infrastructure. We've seen how brutal the critical mineral elements can be like lithium, graphite, cobalt, including uranium when the price goes up or down, and our company will be diversified with multiple streams at world significant scale. Next slide. So again, as I talked about, we have three mines in production. The mill is actively processing uranium today. And we processed at the end of 2024. We only ran the mill at the very end of Q4, and we produced about 160,000 pounds of ore. We expect to finish additional uranium in the first half of this year of between 200,000 and 250,000 pounds. It can be more, as I explained earlier, because we will have plenty of feedstock that we can still process if we elect to. It really depends on what contracts we want to fill and what spot sales we want to make on how much finished goods we actually have at any one given time. I talked about the mining of the ore between that 730,000 to nearly 1.2 million pounds, and that would primarily come from the Pinyon Plain mine and La Sal complex. And I also mentioned that there could be up to another 200,000 pounds of alternate feed and third-party ore purchases that all goes to our account. We still are increasing our ability to ramp up to a run rate of 2 million pounds per year with additional work at the Whirlwind project and at Nichols Ranch with additional drilling. We're also very pleased with the landmark agreement with the Navajo Nation for ore transport, and we are currently transporting ore from the Pinyon Plain mine without any issue. And we're also very excited that we also will be working closely with the Navajo Nation on cleaning up some of their abandoned uranium mines that had nothing to do with Energy Fuels, but that all fits in perfectly with our ESG and our corporate responsibility and stakeholders in all the areas that we work in, particularly down in the Four Corners Region. We have four contracts -- long-term contracts. And as I said, we're only expecting to sell under contract between 200,000 and 300,000 pounds in 2025. We can continue, like we did in 2024, opportunistic spot sales if the market is there, but we do not plan to sell uranium at these current spot prices, which are in the mid-60s. And as I said, at the end of this slide, we are building inventory of uranium to have it available in the order of 1.6 million to 2.3 million pounds in uranium inventory, and we can process that, as I said, when we elect to, to meet the market conditions at the time. Next slide. Rare earths, we continue to focus on monazite as a low-cost byproduct of heavy mineral sands. Monazite has superior distributions of NdPr, Dy and Tb, which is very, very important, particularly with the component of heavies. It's a low-cost byproduct coming from these projects that we've assembled over the last 18 months or so in the heavy mineral sand space. White Mesa is the only facility in the U.S. that can process monazite. I talked about the inventory of the on-spec separated NdPr that we currently have, the 1,000 tonnes of NdPr capacity that we have in our Phase 1 plant at the mill. We are also looking to increase production over time with this Phase 2 plant. We do have a pre-feasibility study that was done a year or so ago back. We're looking to increase the capacity up to 6,000 tonnes of NdPr per year. And we've already got and awarded to Barr Engineering, the engineering for the definitive feasibility study, and that is well underway and should be completed towards the end of this year. We're also currently piloting Dy and Tb separation of the heavies. And we've done all this without diminishing our ability to produce uranium. Next slide. So we've shown this graphic showing the steps to integration to get down to magnets and drivetrains, and we are rapidly advancing this with the ability and having secured these world-class assets for the supply of both heavy mineral sands and monazite. Our ability to process mixed rare earth carbonates, our ability to separate rare earth oxides and ramp that up in due course with Phase 2, but we're very focused on the next step, which is the rare earth metals and alloy step. And we're already working on that with, I said, the prequalification with other companies in the world, but we have aspirations to continue making these steps for full integration in due course. And so that is a key focus of our company going forward. Next slide. On the heavy mineral sand front, again, we made extraordinary process for low-cost, world-scale titanium zirconium mines that also can produce the monazite low-cost byproduct feedstock to extract the Titanium minerals, the ilmenite, rutile, leucoxene, zircon minerals and rare earths. And so basically, the titanium zirconium raw materials are used in industrial applications like white pigment, paint, plastic, metals, ceramics, chemicals, refractory foundries and nuclear applications. In 2024, I already mentioned we had approximately $40 million of revenue from sales from Kwale project. That was 18,000 tons of rutile, 48,000 tons of ilmenite and 2,500 tons of zircon. We're rapidly advancing these three heavy mineral sands projects that I mentioned with our newly acquired project team based out of Perth, both at Toliara, Donald and Bahia and the combination of those including the relationship we have with Chemours puts us in a position to get to scales approaching or equal to Lynas in due course. And it has compelling economics. compelling economics on the heavy mineral sands alone and even more so with the rare earth processing. And as we take those rare earths and process them through the value chain of the oxides, metals and alloys, that margin even increases further. Next slide. So the Toliara project is a game changer for our company and not just our company, but for the critical mineral industry. We believe this project when it is fully approved by the Madagascar government and built, constructed and operating will revolutionize global rare earth production, including titanium and zircon markets. In October, we closed on the combination with Base Resources on October 2nd. And about six weeks later, the government of Madagascar lifted the suspension on the Toliara project. A week or so later, the government of Madagascar and Energy Fuels signed in MOU, advancing technical and financial terms and development, and we are currently working on legal agreements with the Madagascar government right now. And everyone seems to be focused on getting this done. We've advanced and started the bid process for the Toliara project. It's expected to be completed in the first half of 2026. This is a massive resource. It includes massive quantities of recoverable monazite, ilmenite, rutile and zircon. And I don't really think the market appreciates how significant this acquisition was for the company. Those that know the project understand the scale and the significance of this. And a big chunk of our feed for Phase 2 plant will come from the Toliara project on a project that has the potential to generate hundreds of millions of dollars of EBITDA per year for generations. It currently has a mine life of 38 years with the current feasibility study done by base, but it has significant potential to expand this. Next slide. So in addition, we have the Bahia project, which is in exploration and permitting that we bought and own 100% that can also contribute feed to the Phase 2 plant or even the Phase 1 plant and the Donald project in Australia, which is a joint venture where we're earning 49% interest, but would secure all the monazite from that project. And again, not at the scale of Toliara, but material scale with up to 7,000 to 14,000 tonnes of monazite per year for decades. We have most or all the major permits in place, and we again are advancing this through final investment decision targeted for June 30th of this year. And we're using base to advance the FID process with the joint venture, advancing Toliara, completing the final reclamation at Kwale and also advancing the Bahia project. So we have, again, a complete projects team. I don't know if people appreciate how important that is with advancing these projects and also building, constructing, and operating those in the most efficient ways possible. Next slide. So this is an indicative timeline for the rare earth development. And I just want to point out that when you look at -- we commissioned the Phase 1 separation plant in 2024. Meanwhile, we stopped processing rare earths. We've started the uranium processing. This will continue on over the course of the next many years and can ramp up to 5 million pounds in due course with some of our undeveloped projects that we're advancing through the permits. Meanwhile, when you look at the red up above, we have four sources of both heavy mineral sands and monazite coming in over the next few years, including Chemours, which we still receive monazite from as we speak, the Donald project, Bahia and Toliara and Madagascar, all adding up to world significant low-cost scale and scale equal to approximately Lynas. We can restart the Phase 1 separation plant as required, whether it be this year, next year or '27, but we plan to have the Phase 2 separation plant fully constructed and operated -- operating by 2028 to fit the supply from these other projects. Next slide. The medical isotopes, radium recovery, I've already talked about. It's a complementary high-growth opportunity, targeting the targeted alpha therapies which shows great promise for the treatment of cancer. There are certain isotopes, primarily the Radium-226 and 228 that are highly sought after and we're evaluating the potential to recover this for the U.S. medical supply chain and even potentially globally. We have this research and development license, and we're currently working to advance that as we speak. And we have potential to produce commercial quantities in coming years. And if we're successful, it has potential for significant cash flows looking forward. And there is a global shortage of these isotopes. So kind of watch this space. Next slide. Let's talk about guidance. Now as I said earlier, finished material, and it can be more than this in the first half of 2025, 200,000 to 250,000 pounds of uranium production currently and it can be higher, as I mentioned. We only have 200,000 to 300,000 pounds of uranium under contract. In 2025, we'll opportunistically look at selling spot uranium if the market strengthens, but we're not going to if it stays weak. I talked about the ore production at the conventional mines, and this is ore production, and we'll process it or not depending on what the market looks like, but we'll have it to process and we can process it in a couple of months or two or three months if need be. And it doesn't include the 200,000 pounds or up to 200,000 pounds of alternate feed third-party purchases. So towards the end of the year, we could have inventories of between 1.6 million and 2.4 million pounds, both finished and on process. Still working to increase the run rate up to 2 million pounds plus. We have these two additional permitted mines that we're working on as we speak, as I mentioned earlier, and we have these other projects that we're still advancing with our permits, the large-scale Roca Honda project, Bullfrog, and we also have the Sheep Mountain project in Wyoming. We'll continue to do our research and development on radium. Next slide. And we also have the ability to go back into rare earth production in '25 or '26 if we elect to and we have the feedstock to do so. I talked about the Phase 2 expansion engineering that's underway. We're very excited about that with Barr Engineering, and we'll be coming up with updated capital and operating costs for the Phase 2, and we'll be coming up with updated capital operating costs for the fits that are underway for both the Donald project and Toliara this year and early into next year. I talked about the piloting of the DY and TB, and that is very exciting. The drilling is at the Bahia project in Brazil will be underway. We expect to have a resource estimate later in '25 or '26. I talked about doing the two bids underway for both Donald and Toliara. And as I indicated, we have a complete project team to advance those. And we're pursuing the final agreements on Toliara with the Government of Madagascar. And then lastly, we are developing a comprehensive project finance strategy for these remarkable projects, which are world-scale low cost and the timing could never be better for critical elements at this scale, I don't believe of any company I know of at this point in time. So now I'd like to open it up for questions.

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions]. Your first question is from Heiko Ihle from H.C. Wainwright. Please go ahead.

Hi, Mark. Thanks for taking my questions. How are you?

Always a pleasure, Heiko.

Let's talk a bit about your long-term contracts or even more importantly, about contracts that haven't really been made yet. What are you seeing in the market, just maybe over the past month given recent uranium pricing? Is there still -- and I assume the answer is yes. Is there still an interest for geopolitically safe uranium? Maybe just give us a little bit of color of what you're seeing in the market from your customers and maybe other folks you're talking to.

Yes. Heiko, I'll have Curtis answer that question. I mean, I think -- but before he does, the term market is still pretty strong. And I think people recognize the need to have long-term contracts and the spot is weak. But Curtis, go ahead and...

Yes, absolutely. Hey Heiko, how are you? So yes, the term market still seems to be pretty good. The term price is still hanging in there in the $82 per pound range. There are RFPs still being issued right now, probably, I suspect to take advantage of some of the lower pricing we're seeing in spot markets. But again, long-term, I think that the market remains good. The spot market is seeing a little bit of what I would say is some short-term weakness due to just, I think, people trying to get their heads around what's happening with the new administration in Washington, D.C. There's not a big rush to go out and be particularly active in the spot market and deploy capital there. But yes, long-term, I think the fundamentals look as good or even better than ever.

Fair enough. Good. And then just a quick clarification, I guess, because one question, one follow-up. There is a sentence in your press release, the company expects to mine stockpile ore from its Pinyon Play in La Sal and Pandora mines totaling approximately 730,000 to 1.17 million pounds. That's a huge delta. And obviously, a good part of that is because you have a fairly wide range of tonnage, 85,000 to 115,000. But can you maybe provide just a touch more color on what factors you would expect to cause this large-scale range besides contracts and spot pricing?

Yes, sure, Heiko. Well, the Pinyon Play mine is very high grade, low cost -- we've done a lot of development work. We can mine very quickly there and produce and 750 even more potentially of uranium because of that. The La Sal complex, Pandora are higher costs. But for example, right now, with these lower uranium prices, we may elect not to be mining a lot of ore at La Sal or Pinyon Plain. We may go more into a development mode and driving drift out to new areas that have never been mined that -- where we can get better productivity and actually doing that kind of work. So that's really why that range is there, Heiko. It's a combination of are we going to push harder on Pinyon Plain, push harder or less hard on Pandora in La Sal, do some development work at some of these other mines, not mined because of the market circumstances at the time. But that's why that range is there.

That is very helpful. Thank you very much and I will get back in queue.

Your next question is from Joseph Reagor from ROTH Capital Partners. Please go ahead.

Hey Mark and team, can you hear me all right?

Yes, Joe.

Okay. So first thing, I saw -- this was capital to be used for taking projects to FID. How much of the $60 million do you think you'd spend in 2025 on rare earth projects?

Well, when you look at it, it all depends on what you're doing here because if we're mining uranium ore, we're not processing it, we're spending money on uranium ore. If we're developing -- I'm saying, it could be any place really. I mean I think the key thing when you look at things like the advancing the rare earth work with -- take, for example, Toliara, when we do project certification or receive project certification, which we hope will be this year, we're going to have a number of payments that we're going to have to make fairly quickly, totals about $30 million or so. And if things move forward, we want to make sure that we have plenty of funds in treasury right now, so we don't get caught out with our successes, okay? So you don't want your successes to be a problem. So that's why we've raised the money on the ATM. And again, Joe, we're not getting value for these projects and getting the feasibility works updated, the engineering work done, these bids advance, getting all the final approvals and whatnot is how we're going to create long-term value for our shareholders going forward because these are world significant projects, and we just don't want to be caught short on the cash. So the cash could be used anywhere is a long -- the short answer to that question. And I can't really say depending on timing on where it's going to go, but it's going to go to productive use for the shareholder value creation.

Okay. Yes, fair enough. It sounds like there's a lot of moving pieces. And then just on the broader market, I mean, I know Heiko touched on it a little already, but what do you guys think is driving price? Is it just less uranium being processed because of the 10X export restrictions? Or is there something else out there you guys are seeing?

Yes. Joe, this is Curtis here again. Good to hear from you. You kind of blanked out there for a second. I think you were just asking a little bit about what we're seeing sort of in the current spot market weakness. Is that generally what you're asking?

Yes.

Yes. Okay. Yes. So again, the Intel that I've been hearing is that, yes, there's been a little bit of speculation out there about on, say, uranium from Russia coming into the United States. What's that going to look like? What are some of these shipments going to look like? Are there shipments that are actually going to be delayed, that sort of thing. And at the end of the day, the shipments are going forward as planned. And so I think there's some folks out there kind of unwinding some trades. There's some -- there's a fund out there that's looking -- that's been selling a little bit of material, I believe. So yes, I think it's created some weakness, and there's not a lot of buyers out there. Again, the just -- I don't think utilities are particularly active right now in the spot market just because they're fine for the foreseeable future. And so why step in and take what they might perceive to be kind of a risky move by being too active on the spot market if something were to come up that's unexpected, again, with the new administration. I mean everything we're hearing on the administration front, though, is positive. I mean there's a lot of support for nuclear. I don't think anything is really going to change at the end of the day. But there's no reason to be real active out there is my view for a lot of these folks. So I think that's what's created some of the weakness. I think this is a short-term phenomenon. Again, the long-term price is hanging in there. So yes, I think that could be a buying opportunity on the spot market, honestly.

Okay, thanks for the color. I will turn it over.

Your next question is from Noel Parks from Tuohy Brothers Investment Research. Please go ahead.

Hi, good morning. I was struck by your sort of summing up of Toliara and Madagascar that everyone seems to be focused on getting this done. So are there -- I guess, just any other signs you see that are encouraging that both from the government and the legislative side and maybe also for just broader interest in the project that things might go pretty smoothly this year?

Well, it's -- we see that the government appears to be motivated and wants to get this project advanced. And we're doing a lot of work on that front with the government directly with a number of lawyers that are working for us very aggressively. It's still Africa, but we think the timing is right. I mean one of the reasons that it was put in the suspension is over the commercial terms and the stability agreements and whatnot. There was real progress made there with the nickel project that Sumitomo has in Rio Tinto's heavy mineral sands project and really Toliara is next in the queue. So we think the timing is right. They need economic development. They're really focused on how they benefit as a government and regionally with some of these payments that are going to be coming, including the royalties over due course. So I mean, we don't see any red flags, but it just takes time. It takes time these agreements. They're comprehensive. And so I don't know if there's anything to add, Dave, on that front. But I mean, I think just the lifting of suspension, signing the MOU and the fact that we're working collaboratively with the government are all positive signs. But it is Africa, and there's a lot of work to be done.

Yes. This is David Frydenlund. I agree with that. We're seeing all the right signs with the government. They're motivated. But as Mark says, it takes time to go through the details because everyone wants to get it right. We're working to make amendments to our -- help the government make amendments to their laws, and that's going to be carefully thought out, but everyone is motivated and we're -- as a matter of fact, the government is suggesting a schedule that's pretty aggressive, and we'll see if that plays out.

Great. And you mentioned a few sort of high level contributors to uncertainty, exactly what some of the policy items might be out of Washington is one. We've got some sort of interest rate uncertainty, macro uncertainty, and so forth. So against that backdrop, you mentioned you're developing a comprehensive project financing strategy. Does that feel like most of the work to be done on that is fairly straightforward fundamental analysis? Or does it seem that you're really kind of hamstrung a bit until a few months out, we get some better clarity on those issues?

I don't think we're hamstrung. I think that what we had to do or what we did as a company is we really were focused on securing the assets and showing that we can actually deliver on-spec salable NdPr in the supply chain when others had their hands out, okay? And over the last few years, we've not asked for anything from the U.S. government. But now with all these projects that we've secured, and this is like world significant. We are telling or plan to tell the U.S. government and the Australian government that when you look at the assets we've secured, the ability to process at White Mesa that we are a big, huge part of the solution on critical materials, particularly in the United States of America. So we're just getting ourselves organized. We've got the strong balance sheet. We're financing these projects. We're not going to go approve the final FID decisions until we have our financing in order. So those are things that we're getting our DUCs lined up in 2025 to be in a position to move forward with the proper financing in place as non-dilutive as possible. We do have companies that are talking to us and interested about offtake. So there's other ways that we can potentially get equity contributions from people that want to do perhaps prepays or other forms of offtake, which we're going to evaluate in this whole financing program that we're embarking on. But the financing program, we already have a couple of debt advisers that are hired one for Donald through the joint venture and also through Toliara, but we're looking at other groups that can help us in this regard, including the U.S. government, Xen [ph] bank, the DOE, the DoD. So we think our timing is perfect. We think our timing is perfect, because we're not coming with a dream, we're coming with a plan. And a lot of people have come with a dream, not a plan, and we have a very well thought out world-scale, low cost, and we've demonstrated that we can execute a plan, not a dream.

Terrific. Thanks a lot.

Your next question is from Cooper Jefferson from Canaccord Genuity. Please go ahead.

Cooper Jefferson from Canaccord Genuity on behalf of Katie Lachapelle. Thanks for taking my question. First, it's great to see processing activities at White Mesa ramping up. And second, on the uranium cost front, we were wondering if you could potentially provide some additional color on how operating cost per pound U308 are tracking? Thank you.

Yes. Well, I mean, I think one thing you can look at is when you look at the uranium that we've sold has been at a very low cost. I mean, it's been $35 to $40 per pound. As we keep mining additional newly mined ore, that's going to change. The Pinyon Plain Mine is quite low cost. The alternate feed is very low cost. and it's the blend of how that goes. But over time, the more you mine, the more capital you spend, the newer projects you open up, that's going to start creeping up to an extent. We do plan to manage that to the best of our abilities and certainly having the blend of alternate feed and Pinyon Plain go a long ways and how we keep those costs very competitive and more competitive than lots of companies that don't have those levers to pull. We have levers to pull. The reason that mill still is operable and is staffed today and has been for the last 45 years is it had about four levers that others didn't have. And we're going to continue to plan it. So -- but yes, as you start looking at the projects we have right now, we don't require a lot of capital to get up to that 2 million pound per year production rate. But when you start going above the 2 million pounds, we're going to have to put material additional capital in things like Roca Honda, Bullfrog and other projects that we don't have to do to get to 2 million pounds.

That's very helpful. Thank you.

Your next question is from

Hi guys. Can you hear me?

Yes,

Anyways, great work last year. I guess I have two questions. One on the uranium side. Obviously, everyone is scratching their head with where current uranium prices are, whereas the rest of the whole cycle seems to be priced very high. I guess maybe if we step back, aside from the short term, whatever is causing this blip, take out you and Cameco, which I guess you guys seem to be low-cost producers. What's the replacement cost or production cost of all these other new mines you see on slideware out there that they would have to cover if the utilities really want to have lots of production from alternative sources, what I'm saying that. These guys should not be selling uranium, if they can't make money on it. So I'm just curious what production costs are of all these other slideware that you see out there that eventually should actually price where uranium is going to go if people want it from North America?

Yes. It almost -- as they always say with commodities, lower prices of the solution for lower prices and vice versa. So with that, it seems like contracts at some point have to go above that replacement cost, which would be very bullish for you guys in the guess of the timing. Jumping over to rare earth. One of the previous guys really hit an important topic. Once you kind of get through this, the approvals and everything in place, it seems to me like it doesn't make sense to put major investment in the ground until you really have an offtake. And the offtake, again, given the geopolitical issues and given that China controls 95% of these resources and that you're going to be low cost once you get to scale, that seems like something somebody should be willing to invest in say, whenever '29, '30, '31 an offtake agreement that allows you to finance this thing. Is that a reasonable assumption on the type of discussions that you're having? Obviously, [indiscernible] is always in the details.

Yes, yes. I mean, I think when you look at, well, okay, uranium grain prices should go up to replace that value. When you look at the rare earths, you look at the heavy mineral sands, there are other companies out there that are very interested in the products, the heavy mineral sand products that we will be producing from these three projects that we have. And frankly, there's a history of other companies showing, expressing interest in some of these projects for some prepayments and whatnot or offtakes. So we plan to and are having discussions with other people in that regard. When you look at the NdPr oxide and people interested in the metals, alloys and magnet sector of the business. People are looking for non-China, non-Russia sources of this product, and there's very limited molecules out there, but they're very keen to establish their kind of the bifurcated supply chains that they can show their customers that are sensitive to those crossovers with China that are also interested in offtake. So I mean -- and really with our FIDs, again, you're right, we need those offtakes. We need those people signing up long-term agreements with us to finance these things and get the bank financing and whatnot. So it's very big part of our story. And as I said, with this financing program that we're putting in place, that is a key part of how we're going down the path and going forward. So -- but there are people that are contacting us, and there are people that have said that Energy Fuels has acquired assets that they wish they had acquired. And they said that their company take the risk on something like Toliara, because of political risk. Well, we took the risk and then the suspension was lifted. And that's why we took the risk, because we thought the suspension would be lifted, and we thought that we would get those agreements in due course. So -- and the bottom line,

And I guess the thing to take from that, if I'm reading you properly is once you have an offtake, if you do again an offtake, then the financing revolves strictly around the value of that project. It doesn't revolve around wherever your stock might be. So you have to worry about your stock at that point because the financing will be based on the offtake. Is that a way of thinking about it?

Yes.

Got it. Awesome. Thank you.

Yes. We still get valued as a uranium company and having these other assets, there's a day where it's -- some of our naysayers, as I said are -- there's fewer, but people are going to wake up and realize that this is a world significant building story that is -- and we're playing a long game here.

Thanks guys.

Your next question is from Michael Bersick [ph] from B. Riley Wealth. Please go ahead.

Yes, hi guys. Just a question on -- I believe

Yes. This is Curtis Moore. Thanks for your question. That is a good question. And there's still a lot of details that I think need to be worked out on that. And to our understanding, there's not a whole lot of these projects in Ukraine that are all that economically competitive from what we know. We do know that there are ilmenite mines, ilmenite projects. I suspect there's also monazite there. To the extent there is monazite, well, shoot, that material could come to the White Mesa Mill for processing. I mean, if the U.S. government wanted to support some sort of a supply chain like that, that maybe is not economic, but there's broader geopolitical reasons. So we're still trying to get visibility on this. The fact remains is that our projects are going to be low-cost, first quartile, highly competitive projects. So that offers a big level of protection no matter what happens. So...

Yes, I want to add to that. We went through a process with TCMI, who's kind of the world leaders on heavy mineral sand projects, similar to what Curtis said maybe in Ukraine. And we gave a mandate to go through all the projects in the entire world and come up with a short list of the top 10 projects that had heavy mineral sands and monazite that we should look at potentially acquiring. And I don't recall any of them, including Ukraine on that list. And we went and took and secured the top 2 projects that were available, which was Toliara and Donald out of that incomplete list. So we focus on low-cost, large-scale projects, and that's how we built our plan. Now as I said, when you look at that map we have of the world and showing where these projects are, where they are in terms of permitting, where they are in terms of engineering, where they are in terms of FID, these projects are ready to go quicker, faster than just, oh, let's get to all the projects in a country. They're very -- would be very early stages compared to what we're doing right now. So we're in a great position. And we will be telling the U.S. government that is the case. And the U.S. government knows our story. And it's just gotten to the point now where this is an advanced story. As I said, it's -- we're executing plans, not just giving lip service to it. And these projects are low cost. And ultimately, everybody should be focused on low cost, not just a project in a given country.

Well, if I can add two more points to that. Number -- the first point I'll make is that it's kind of funny. I'll look at like news reports about all these rare earth minerals in Ukraine and then they start talking about like gallium and germanium and things like that, which actually are not rare earth elements, and we're not involved in those markets. So it's -- there's a question about what minerals are actually talking about here. And this is just my own personal opinion. I feel like this could just be a longer-term play to kind of secure these minerals. We're going to be needing these critical materials for decades, if not centuries. And so maybe they're not economic today, but hey, in the next 20, 30 years, maybe then they'll be important to the United States, kind of like maybe the talk about Greenland and the critical minerals up there. I mean those are not going to be produced anytime soon either. So again, there's speculation here. We're looking forward to learning more. But we don't currently see it as a threat. Yes.

Just to give you a little further and then I'll be quiet. We believe that we can solve a lot of the United States critical mineral issues in this current term, in the next three, four years because of the projects we have, where they are and what stage they're at in this term. That is a pretty powerful statement.

Great, thanks guys. Maybe they're after the Ukranium. Sorry it was a joke. Thanks a lot.

All right.

Your next question is from Mike Kozak from Cantor Fitzgerald. Please go ahead.

Yes, good afternoon Mark and team. Just a couple of questions for me. Number one, can you give me the best you can, a range of your expected average realized price for material delivered into uranium contract book this year? And just is it fixed price, market related? Any color would be helpful.

Well, these are market -- they're hybrid contracts, similar to what we delivered into the contracts last year. So yes, in fact, it's the same contract. So contracts. So yes, there's a certain portion of the price that is based on the spot price in effect at the time of delivery and another aspect of the price is fixed. These prices -- the fixed portion of the prices escalate with inflation. So we're getting the benefit of that. These contracts also have floors and ceilings that also escalate with inflation. So, yes.

And what we delivered last year was $75 a pound in that neighborhood.

Yes. That's very helpful. And then second one, your guidance for finished production of 200,000 to 250,000 pounds this year, how much of that will be material mined from Pinyon Plain, La Sal or Pandora either late last year or this year? What I'm trying to get at is, will most of that guide for finished production this year still come from alternate feed?

I would say most of that finished goods is going to come from existing inventories at the mill that is currently out there. And a lot of the newly mined ore from Pinyon Plain and La Sal will just be stockpiled yet to be processed. There may be some La Sal ore that was processed. And I think I mentioned earlier that even, for example, some of the ore that was mined at La Sal in 2024, we mixed it with some of the alternate feed, and we also mixed it with some of the ore that we received from New Mexico that came from the Mount Taylor project, and it was blended. So it can be a little bit of anything. But I'd say most of our ore will be stockpiled. The newly mined ore this year will be stockpiled. We may use some of it. Most of it will be existing inventories that are already at the mill.

Thank you. Very helpful. I will turn it back.

Your next question is from Justin Chan from SCP Resource Finance. Please go ahead.

Hi, team. Thanks so much for taking my questions. My first one is just on, I guess the accounting treatment of your mining costs and stockpiling ore. Can you give us some guidance on perhaps quantum on -- I know your operating costs are, say, $40 a pound and maybe a little bit higher for some of the newer ops. How much of that is mining? And will that be capitalized on the balance sheet this year?

I will let Nate answer those questions.

Yes. Thanks for the question, Justin. So yes, there is the processing cost at the mill that you're talking about. But the mining costs for the Pinyon and La Sal that we're talking about, those will be capitalized onto the balance sheet as inventory costs. So you'll see those inventory balances go up throughout the year as we mine those costs. And the same with the processing cost at the mill, they also get added on top into our work-in-process inventory that we'll see capitalized on the balance sheet.

And I guess relative to the, let's say, total delivered cost to the pounds, I'm just trying to get a sense of the quantum of the mining costs that will be capitalized. Is there a number of dollar per pound or round number that you think would be kind of a good turning point.

Like a Pinyon Pain, I mean, it typically will range from -- anywhere from $25 to $35 a pound, depending on the ore grade. And then also La Sal, a little bit higher cost per pound at La Sal that we'll see that you would add on top of the processing costs there. If that gives you some sense based on our forecasted production volumes.

Got you. Thanks. That's really helpful. And then I saw that there's still some product from Kwale that's yet to be sold or will be sold in Q1. Could you give a sense of what you're expecting broad numbers revenue-wise from that?

Yes. So during the first quarter, we're expecting $10 million to $15 million in revenue with really little to no profit margin on those just with the mine wrapping up and selling off the remaining inventory there at Kwale, but we will see that $10 million to $15 million come in, in revenue.

Got you. Has the operating cost for that already been capitalized from a cash perspective, it is quite incremental? Or would you say that the operating costs are -- will come into the quarter also from a cash perspective?

No. Yes, all operating costs because all the mining cost was -- so those have been capitalized in inventory. So that's what you see on our balance sheet at the end of the year.

Okay. So that will be helpful from a cash perspective.

Yes, yes.

Okay. Excellent. And then I guess, big picture, guys, I think Toliara is a huge attraction from our perspective. What are your current plans for Toliara maybe through this year? What's happening there now? What are your key work streams? Are you considering any changes to the high-level concept with the port and the road, et cetera? Maybe can you just give a bit more color on the path between here and FID?

Yes. Well, there's no really material changes, I think in the plans that have been put forth by Base previously. I mean we do plan to update all the capital and operating costs in the feasibility study this year as we move through the FID process. And the one thing, and Justin, you appreciate, you've been there, it's very scalable. I mean, even though it's this huge project, I mean, if we want to make it bigger, smaller, we probably won't make it smaller, but bigger, we can do so. And the biggest -- sort of the biggest infrastructure cost is the port for ocean-size ships for the heavy mineral sands and stuff. So yes, it -- after we got the suspension lifted, the MOU working on these legal agreements, we're advancing the FID process, we should have updated feasibility numbers. And we're putting a lot of this into the SK 43-101 format so that that's, we can then report that and update the market on that with the anticipation that the FID will be completed early in 2026 is the current plan and then be able to go into construction shortly thereafter with adequate financing. So yes, still the same plan. And again, Justin, as we said, we just see this as a missing link that the market has been looking for to supply these material quantities of monazite as a byproduct to a very profitable project on its own merits, just on heavy mineral sands.

Absolutely. And maybe just one last one for me. Have you -- I was just wondering if maybe you could share a bit of color on, I guess, with the new administration in place, have you had any dialogue with them regarding their rare earth strategy that perhaps would be helpful for the people on this call? And also, I guess, as far as you've seen in the disclosure that's out, is there much impact of tariffs on the market on importing either uranium or rare earths that investors should be aware of?

I'll answer the first part, and I'll let Curtis answer the next part. It takes time with the new administration to get people in place. We are organizing extensive trips to D.C. to meet some of the new players, the new secretary level type people. And as I said, we're going to be selling a story of delivery in this term, which we think will be very compelling. Regard to the tariffs and whatnot.

Well, and just to add on to that, there's been quite a bit of outreach actually with the new administration with sort of mid-level folks, the career folks. And so again, they're well, well aware of what Energy Fuels is doing and highly supportive of it. So -- but then on the tariffs, as you know, there's a price differential has opened up between ConverDyn and Cameco on uranium due in part to this. Luckily, on the uranium side of things, we don't -- that doesn't impact us. Now down the road, this is something that we'll be making the administration aware of is if you're producing minerals in another country and bringing them into the United States, will something like that be subject to a tariff. I mean, we would hope not. But there are some other strategies that have been brought to our attention to mitigate or avoid those kinds of possibilities. But luckily, we're not producing uranium -- I'm sorry, producing mineral sands out of and monazite out of Toliara for a couple of years or Donald for a couple of years. So we'll have time to see how it all plays out.

Absolutely. I'd imagine that there should be -- if you're upgrading in the United States, like I'm sure that they need to account for that and how they design the wording. Also, just maybe on the rare earth market in general, I'm curious if you've seen any price differentials opening up.

It's been pretty.

I mean, we haven't been -- we're not selling a lot of rare earths right now. So most of our discussions that we're having are with specific buyers on contracts or sales commitments that there's a relation to the market, but there's an appetite for non-Chinese material out there. So again, more clarity on that will be coming, I think. But yes, I'm not seeing what you're referring to.

No, no, I'm not referring to anything specifically. I just think it could be a big opportunity given that you are doing a lot of the upgrading in the United States. And there's been, I think, appetite for, but not a mechanism previously for kind of differentiating American rare earths from, say, products from China as an example.

Well, and it should be viewed as a big benefit economically for the United States where you bring, you have these raw materials from produced around the world and you bring them back to the United States where we then manufacture them into high-value materials and high-value goods and that sort of thing. So we're going to be certainly making that clear, and I'm sure others out there will be making that clear, too, that you don't want to slap tariffs on valuable raw materials that we can use for our own economy and our own military defense and technology and all that.

Absolutely. All right. Well, thanks so much guys. I'll free up the line. I taking it up for a while. Thank you.

Thank you, Justin.

Once again your next question is from John Debs from Bodri Capital. Please go ahead.

Hello, can you hear me?

Yep.

Yes.

Okay. I don't understand why you're selling stock at $5.43 if you have this fantastic future of all these assets. It seems like you're just giving away equity at a very low price?

I'll answer that question, because when you look at these world-class assets, you have to be able to fund the advancement of the FIDs, making certification payments and getting these projects advanced to a point where they're actually valued in the stock. The one thing I've learned working in this business coming up on 50 years is you want to have a strong balance sheet. And we will always have a strong balance sheet to make sure that we can cover downturns in the market and be well funded to carry out the plans that we have, which are aggressive, but are also necessary to get the appreciation and value of these assets going forward.

The next question is from Conway Ivy from Ivy Mineral, Inc. Please go ahead.

Yes. I've been a long-term shareholder in Energy Fuels, and I very much appreciate the work you've done to build up this rare earth infrastructure. It's very, very impressive. I also appreciate your comments on the uranium rare earths, because that puts that in perspective as well. But as a follow-up on the uranium rare earths, and I realize it's in the future, but excluding China, where would be the production capacity to really process those rare earths? And assuming it would not be available, where -- excluding China, where would the technology come from to build a new plant should our government enter into this agreement? Thank you very much.

Okay. Well, look, I'll talk about -- I mean, in terms of outside of China, I mean, you've got us and you've got MP. You've also got Lynas that is operating in Malaysia and also has built a crack and leach facility in Western Australia. It ran way over budget. You got Iluka that is also building a processing facility in Western Australia, and it is also way over budget. There's limited places where you can do this. And really, the key differentiator for us is that we have the ability to take the monazite in our process in the mill in the United States, and we have the ability to deal with uranium and the thorium where others like Iluka are not and even Lynas has had challenges in Malaysia. So there's limited places where you can do this and do it economically. We think that it makes the most sense doing it economically in the United States, because even in places like Australia and Malaysia, there is no final use for those products in those countries. It has to get shipped out anyways. So why not ship it to the United States where you have lower power costs, lower water costs, lower people costs, lower construction costs, -- so -- and I don't know if Curtis is sitting here, maybe want to add some commentary as well, but that's my response.

Well, and there is -- there are some small actors outside of China in the downstream on the rare earth metal making, alloy, magnet making, that sort of thing, some players in Europe, some players in Japan, some players in South Korea, Vietnam, those kinds of locations. And there's also efforts to build up that capacity in the United States and Europe. I know that there's some efforts by Neo Performance Materials in Europe. There's some efforts to build a plant in South Carolina that will have these functions. I know MP Materials is building up a facility in Texas and others. So it is limited right now, but it is growing. And I think that those customers and that outside capacity is probably going to grow right alongside Energy Fuels ability to produce these oxides. And as Mark mentioned earlier in the call, we're potentially looking to make some progress going downstream in a low cost and very valuable way. So we're confident there will be a place for our material outside of China.

Thank you very much. And congratulations on what you all have done in this market segment. Thank you.

There are no further questions at this time. Please proceed with closing remarks.

All right. Well, first of all, everyone who joined today or is listening to the replays later, thank you for your interest in Energy Fuels. As I said, we are a unique company and -- but we are advancing a very unique strategy to build a company that has multiple critical elements focused on low-cost processing in the United States and large scale. So we're very excited about that. We have a long way to go here in terms of demonstrating to the market the next steps that we're taking. I think 2025 is going to be a very important year because we're going to be able to provide, I believe, a lot more clarity on how these pieces fit together with updated studies and reviews and potentially announcements with regard to people interested in offtake or other funding mechanisms, including how we plan to organize ourselves with our long-term project financing. So nothing ventured, nothing gained, but we will always be aggressive, but not reckless. We want a strong balance sheet. You do not want to run out of money, but we have to execute the strategy, and we plan to continue to execute the strategy and show that we're building long-term value and not playing a short game. One of the reasons we diversified is I've been in the uranium business for a lot of years, and I've seen the ups and downs, and that is the way that the market rolls as do other critical minerals, and we are positioning our company to have less volatility over time than others because of that diversification. So thank you very much, and have a great day.