Interview with Mark Chalmers, President & CEO of Energy Fuels

Our previous interview: https://www.cruxinvestor.com/posts/energy-fuels-nyseuuuu-base-resources-acquisition-approved-5897

Recording date: 6th of December, 2024

Energy Fuels (NYSE: UUUU), a leading U.S. uranium producer, has received significant news with the Madagascar government lifting a five-year suspension on its Toliara heavy mineral sands project. This development marks a major milestone in the company's strategy to build a critical minerals hub around its core uranium business.

The Toliara project, acquired through the purchase of Base Resources in October 2024, is described by CEO Mark Chalmers as a "world-class, low-cost, world-scale heavy mineral sand project with millions of tons of monazite." The company plans to begin a 14-month final investment decision process, with potential construction starting in early 2026 and production targeted for 2028.

While diversifying into critical minerals, Energy Fuels maintains its position as the largest uranium producer in the United States. The company operates multiple mines, including Pinyon Plain and La Sal, with plans to restart the Whirlwind mine in spring 2025. Its White Mesa Mill in Utah currently has approximately one million pounds of uranium in its processing pipeline.

The company's financial position remains strong, with $180 million in working capital and zero debt. Energy Fuels has already sold 450,000 pounds of uranium in 2024 at an average price of $84 per pound, with only 300,000 pounds committed for 2025, providing exposure to potential price increases.

In the broader uranium market, Chalmers notes that while current prices in the high $70s per pound are sufficient for existing projects with paid-off capital costs, the market needs to consider a "fully-loaded" price that accounts for finding, permitting, building, and operating new projects. This suggests potential upward pressure on uranium prices to incentivize new supply.

The company's strategic positioning aligns with increasing U.S. focus on domestic critical minerals production. While not currently relying on government funding, Energy Fuels is positioning itself for potential large-scale support, with Chalmers indicating future funding requests could be in the billions rather than millions of dollars.

The scale of the challenge in domestic uranium production is significant. With U.S. annual uranium consumption at 45 million pounds, Chalmers provides perspective on production targets: "To get up to about 5 million pounds of uranium is a big step for the sector in the United States. To get to 10 is a huge step... that's not going to happen anytime soon."

Energy Fuels' combination of operational uranium assets, critical minerals development, and strong balance sheet positions it as a key player in the U.S. strategic minerals sector, with multiple catalysts for growth ahead.

Learn more: https://www.cruxinvestor.com/companies/energy-fuels

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