Energy Fuels stands to benefit from global moves to reduce reliance on Russian uranium. Two key areas in which this could occur is through prolonged higher prices for the commodity and/or through the US establishing a strategic US uranium reserve.
Energy Fuels said the invasion had resulted in financial entities entering the uranium market and purchasing the metal on the spot market to hold for the long-term, which, the company says, could result in higher sustained spot and term prices and lead to utilities entering more long-term contracts with non-Russian producers.
"However, the company has not yet entered into sufficient long-term supply agreements to justify commencing uranium production at the company's mines and in-situ recovery facilities," Energy Fuels said.
"As a result, the company expects to maintain uranium recovery at reduced levels until such time when sustained increased market strength is observed, additional suitable term sales contracts can be procured, or the US government buys uranium from the company following the establishment of the proposed US Uranium Reserve," the company added.
The Colorado-headquartered Energy Fuels noted that the 2020 US COVID-Relief and Omnibus Spending Bill includes US$75 million for the proposed establishment of a strategic US Uranium Reserve.
"The company stands ready to benefit from this programme through future production from its mines and facilities and potentially sales out of its existing uranium inventories," it said, while cautioning that it remains unclear what the details of the implementation would be.
Energy Fuels ended 2021 with US$143.2 million of working capital, including US$113 million of cash and marketable securities and US$30.8 million of inventory, including about 691,000 pounds of uranium and 1.65 million pounds of vanadium.
Throughout the year, the company saw a net income of US$1.5 million, which compares to a net loss of US$27.9 million the year prior.
Energy Fuels was quoted on the Toronto Stock Exchange on March 17 at C$10.53/share (US$8.30/share). The company had a market capitalisation of C$1.65 billion.
