efr-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 001-36204

ENERGY FUELS INC.

(Exact name of registrant as specified in its charter)


Ontario,	Canada	98-1067994
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)


225 Union Blvd.,	Suite 600
Lakewood,	Colorado	80228
(Address of principal executive offices)		(Zip Code)

(303) 974-2140

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common shares, no par value	UUUU	NYSE American
	EFR	Toronto Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act): Yes ☐ No ☒

As of May 13, 2022, the registrant had 157,566,392 common shares, without par value, outstanding.

ENERGY FUELS INC.

FORM 10-Q

For the Quarter Ended March 31, 2022

INDEX


			Page
PART I – FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS			9
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			26
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			40
ITEM 4. CONTROLS AND PROCEDURES			41
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS			42
ITEM 1A. RISK FACTORS			42
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			42
ITEM 3. DEFAULTS UPON SENIOR SECURITIES			42
ITEM 4. MINE SAFETY DISCLOSURE			42
ITEM 5. OTHER INFORMATION			42
ITEM 6. EXHIBITS			42
SIGNATURES

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report and the exhibits attached hereto (the “Quarterly Report”) contain “forward-looking statements” within the meaning of applicable United States (“U.S.”) and Canadian securities laws, which may include, but are not limited to, statements with respect to Energy Fuels Inc.’s (the “Company” or “Energy Fuels”): anticipated results and progress of our operations in future periods, planned exploration, if warranted, development of our properties, plans related to our business, including our rare earth element (“REE”) initiatives, and other matters that may occur in the future, any expectation related to the proposed establishment of a uranium reserve for the United States (the “U.S. Uranium Reserve”) pursuant to the COVID-Relief and Omnibus Spending Bill, which includes $75 million for the establishment of a strategic U.S. Uranium Reserve and was signed into law on December 27, 2020, any expectation related to any additional or future recommendations of the United States Nuclear Fuel Working Group (the “U.S. Nuclear Fuel Working Group” or “Working Group”), any plans we may have with regard to REE production, any plans we may have with respect to the recovery of radioisotopes for use in the production of medical isotope therapeutics, any plans we may have to evaluate the ramp-up of production at any of our properties, and the expected costs of production of any properties that may be ramped up. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.

Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, schedules, assumptions, future events, or performance (often, but not always, using words or phrases such as “expects” or “does not expect,” “is expected,” “is likely,” “budgets,” “scheduled,” “forecasts,” “intends,” “anticipates” or “does not anticipate,” “continues,” “plans,” “estimates,” or “believes,” and similar expressions or variations of such words and phrases or statements stating that certain actions, events or results “may,” “could,” “would,” “might,” or “will” be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements.

Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. We believe that the expectations reflected in these forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct, and such forward-looking statements included in, or incorporated by reference into, this Quarterly Report should not be unduly relied upon. This information speaks only as of the date of this Quarterly Report.

Readers are cautioned that it would be unreasonable to rely on any such forward-looking statements and information as creating any legal rights, and that the statements and information are not guarantees and may involve known and unknown risks and uncertainties, and that actual results are likely to differ (and may differ materially) and objectives and strategies may differ or change from those expressed or implied in the forward-looking statements or information as a result of various factors. Such risks and uncertainties include global economic risks such as the occurrence of a pandemic, risks associated with our ramp-up to commercial production of an REE carbonate (“RE Carbonate”), risks associated with the potential recovery of radioisotopes for use in the production of medical isotope therapeutics, and risks generally encountered in the exploration, development, operation, and closure of mineral properties and processing and recovery facilities, as well as risks related to the proposed establishment of a U.S. Uranium Reserve and risks related to any additional or future recommendations of the U.S. Nuclear Fuel Working Group not benefiting us in any material way. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation the following risks (the “Risk Factor Summary”):

•global economic risks, including the occurrence of unforeseen or catastrophic events, such as political unrest, wars or the emergence of a pandemic or other widespread health emergency, which could create economic and financial disruptions and require us to reduce or cease operations at some or all of our facilities for an indeterminate period of time, and which could have a material impact on our business, operations, personnel and financial condition;

•risks associated with Mineral Reserve and Mineral Resource estimates, including the risk of errors in assumptions or methodologies;

•risks associated with changes to applicable Mineral Reserve and Mineral Resource estimates disclosure rules and regulations;

•risks associated with estimating mineral extraction and recovery, forecasting future price levels necessary to support mineral extraction and recovery, and our ability to increase mineral extraction and recovery in response to any increases in commodity prices or other market conditions;

•uncertainties and liabilities inherent to conventional mineral extraction and recovery and/or in situ recovery (“ISR”);

•risks associated with our ramp-up to commercial production of RE Carbonate and potentially other REE and REE-related value-added processes and facilities, at our White Mesa Mill (the “White Mesa Mill” or the “Mill”) in Utah or elsewhere including the risk: that we may not be able to produce RE Carbonate that meets commercial specifications at commercial levels or at all, or at acceptable cost levels; of not being able to secure adequate supplies of uranium and REE bearing ores in the future at satisfactory costs to us; of not being able to increase our sources of uranium and REE

bearing ores to meet future planned production goals; of not being able to sell the RE Carbonate we produce at acceptable prices to us; of not being able to successfully construct and operate an REE separation facility, and potentially other downstream REE activities, including metal-making and alloying, in the future, which are currently being evaluated; of legal and regulatory challenges and delays; and the risk of technological or market changes that could impact the REE industry or our competitive position;

•risks associated with the establishment of a U.S. Uranium Reserve, being subject to appropriation by the U.S. Congress, and details of implementation of the U.S. Uranium Reserve;

•risks associated with any additional recommendations of the U.S. Nuclear Fuel Working Group not benefiting us;

•risks associated with the change in administration, or its lack of support of mining, uranium mining, nuclear energy or other aspects of our business, including not supporting the proposed establishment of a U.S. Uranium Reserve included in the COVID-Relief and Omnibus Spending Bill passed by the U.S. Congress in December 2020;

•geological, technical and processing problems, including unanticipated metallurgical difficulties, less than expected recoveries, ground control problems, process upsets, and equipment malfunctions;

•risks associated with the depletion of existing Mineral Resources through mining or extraction, without replacement with comparable Mineral Resources;

•risks associated with identifying and obtaining adequate quantities of other uranium-bearing materials not derived from conventional material and sourced by third parties (“Alternate Feed Materials”) and other feed sources required for the operation of our Mill;

•risks associated with labor costs, labor disturbances, and unavailability of skilled labor;

•risks associated with the availability and/or fluctuations in the costs of raw materials and consumables used in our production processes;

•risks and costs associated with environmental compliance and permitting, including those created by changes in environmental legislation and regulation, and delays in obtaining permits and licenses that could impact expected mineral extraction and recovery levels and costs;

•actions taken by regulatory authorities with respect to mineral extraction and recovery activities;

•risks associated with our dependence on third parties in the provision of transportation and other critical services;

•risks associated with our ability to obtain, extend or renew land tenure, including mineral leases and surface use agreements, on favorable terms or at all;

•risks associated with our ability to negotiate access rights on certain properties on favorable terms or at all;

•risks associated with potential information security incidents, including cybersecurity breaches;

•risks that we may compromise or lose our proprietary technology or intellectual property in certain circumstances, which could result in a loss in our competitive position and/or the value of our intangible assets;

•risks associated with us potentially not being able to successfully develop, attract and retain qualified management personnel in the future, given that the number of individuals with significant experience in the uranium, vanadium, REE and radioisotope industries is relatively small;

•the adequacy of our insurance coverage;

•uncertainty as to reclamation and decommissioning liabilities;

•the ability of our bonding companies to require increases in the collateral required to secure reclamation obligations;

•the potential for, and outcome of, litigation and other legal proceedings, including potential injunctions pending the outcome of such litigation and proceedings;

•our ability to meet our obligations to our creditors;

•our ability to access credit facilities on favorable terms;

•risks associated with our relationships with our business and joint venture partners;

•failure to obtain industry partner, government, and other third-party consents and approvals, when required;

•competition for, among other things, capital, mineral properties, and skilled personnel;

•failure to complete and integrate proposed acquisitions, or incorrect assessment of the value of completed acquisitions;

•risks posed by fluctuations in share price levels, exchange rates and interest rates, and general economic conditions;

•risks inherent in our and industry analysts’ forecasts or predictions of future uranium, vanadium, copper and REE price levels, including the prices for RE Carbonates, REE oxides, REE metals and REE metal alloys;

•market prices of uranium, vanadium, copper and REEs, which are cyclical and subject to substantial price fluctuations;

•risks associated with our uranium sales, if any, being required to be made at spot prices, unless we are able to enter into new long-term contracts at satisfactory prices in the future;

•risks associated with our vanadium sales, if any, generally being required to be made at spot prices;

•risks associated with our proposed RE Carbonate sales, if any, being tied in whole or in part to REE spot prices;

•failure to obtain suitable uranium sales terms at satisfactory prices in the future, including spot and term sale contracts;

•failure to obtain suitable vanadium sales terms at satisfactory prices in the future;

•failure to obtain suitable copper or REE sales terms at satisfactory prices in the future;

•risks associated with any expectation that we will be successful in helping the U.S. Environmental Protection Agency (“EPA”) and Navajo Nation address the clean-up of historic abandoned uranium mines;

•risks associated with asset impairment as a result of market conditions;

•risks associated with lack of access to markets and the ability to access capital;

•the market price of our securities;

•public resistance to nuclear energy or uranium extraction and recovery;

•governmental resistance to nuclear energy or uranium extraction or recovery;

•risks associated with inaccurate or nonobjective media coverage of our activities and the impact such coverage may have on the public, the market for our securities, government relations, permitting activities and legal challenges, as well as the costs to us of responding to such coverage;

•risks associated with potential impacts of public perceptions on our commercial relations;

•uranium industry competition, international trade restrictions and the impacts on world commodity prices of foreign state subsidized production;

•risks associated with foreign governmental actions, policies, laws, rules and regulations, and foreign state subsidized enterprises, with respect to REE production and sales, which could impact REE prices available to us and impact our access to global and domestic markets for the supply of REE-bearing ores and the sale of RE Carbonate and other REE products and services to world and domestic markets;

•risks associated with our involvement in industry petitions for trade remedies and the extension of the Russian Suspension Agreement, including the costs of pursuing such remedies and the potential for negative responses or repercussions from various interest groups, consumers of uranium, and participants in other phases of the nuclear fuel cycle, both domestically and abroad;

•risks associated with governmental actions, policies, laws, rules and regulations with respect to nuclear energy or uranium extraction and recovery;

•risks related to potentially higher than expected costs related to any of our projects or facilities; risks related to our ability to recover copper from our Pinyon Plain uranium project mineralized materials;

•risks related to stock price, volume volatility and recent market events;

•risks related to our ability to maintain our listing on the NYSE American and the Toronto Stock Exchange (“TSX”);

•risks related to our ability to maintain our inclusion in various stock indices;

•risks related to dilution of currently outstanding shares from additional share issuances, depletion of assets, etc.;

•risks related to our securities, including securities regulations, and our lack of dividends;

•risks related to our issuance of additional common shares under our At-the-Market (“ATM”) program or otherwise to provide adequate liquidity in depressed commodity market circumstances;

•risks related to acquisition and integration issues, or related to defects in title to our mineral properties;

•risks related to our method of accounting for equity investments in other companies potentially resulting in material changes to our financial results that are not fully within our control;

•risks related to any material weakness that may be identified in our internal controls over financial reporting. If we are unable to implement/maintain effective internal controls over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, negatively affecting the market price of our common stock;

•risks of amendment to mining laws, including the imposition of any royalties on minerals extracted from federal lands, the designation of national monuments, mineral withdrawals or similar actions, which could adversely impact our affected properties or our ability to operate our affected properties; and

•risks related to our potential recovery of radioisotopes at the Mill for use in the development and production of emerging targeted alpha therapy (“TAT”) cancer therapeutics, including any expectation that: such potential recovery will be feasible or that the radioisotopes will be able to be sold on a commercial basis; all required licenses, permits and regulatory approvals will be obtained on a timely basis or at all; the cancer treatment therapeutics will receive all approvals and will be commercially successful; and the risk of technological or market changes that could impact the TAT industry or our competitive position.

Such statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to, the following assumptions: that there is no material deterioration in general business and economic conditions; that there is no unanticipated fluctuation of interest rates and foreign exchange rates; that the supply and demand for, deliveries of, and the level and volatility of prices of uranium, vanadium, REEs and our other primary metals, radioisotopes and minerals develop as expected; that uranium, vanadium and REE prices required to reach, sustain or increase expected or forecasted production levels are realized as expected; that our proposed RE Carbonate production or any other REE activities, our proposed radioisotope program, or other potential production activities will be technically or commercially successful; that we receive regulatory and governmental approvals for our development projects and other operations on a timely basis; that we are able to operate our mineral properties and processing facilities as expected; that we are able to implement new process technologies and operations as expected; that existing licenses and permits are renewed as required; that we are able to obtain financing for our development projects on reasonable terms; that we are able to procure mining equipment and operating supplies in sufficient quantities and on a timely basis; that engineering and construction timetables and capital costs for our development and expansion projects and restarting projects on standby are not incorrectly estimated or affected by unforeseen circumstances;

that costs of closure of various operations are accurately estimated; that there are no unanticipated changes in collateral requirements for surety bonds; that there are no unanticipated changes to market competition; that our Mineral Reserve and Mineral Resource estimates are within reasonable bounds of accuracy (including with respect to size, grade and recoverability) and that the geological, operational and price assumptions on which these are based are reasonable; that environmental and other administrative and legal proceedings or disputes are satisfactorily resolved; that there are no significant changes to regulatory programs and requirements that would materially increase regulatory compliance costs, bonding costs or licensing/permitting requirements; and that we maintain ongoing relations with our employees and with our business and joint venture partners.

This list is not exhaustive of the factors that may affect our forward-looking statements. Some of the important risks and uncertainties that could affect forward-looking statements are described further under the section heading: Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Quarterly Report. Although we have attempted to identify important factors that could cause actual results to differ materially from those described in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed, estimated, or expected. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Except as required by law, we disclaim any obligation to subsequently revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. Statements relating to “Mineral Reserves” or “Mineral Resources” are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the Mineral Reserves and Mineral Resources described may be profitably extracted in the future.

We qualify all forward-looking statements contained in this Quarterly Report by the foregoing cautionary statements.

CAUTIONARY NOTE TO INVESTORS CONCERNING

DISCLOSURE OF MINERAL RESOURCES AND RESERVES

We are a U.S. Domestic Issuer for United States Securities and Exchange Commission (“SEC”) purposes, most of our shareholders are U.S. residents, we are required to report our financial results under U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) and our primary trading market is the NYSE American. However, because we are incorporated in Ontario, Canada and also listed on the TSX, this Quarterly Report also contains or incorporates by reference certain disclosure that satisfies the additional requirements of Canadian securities laws that differ from the requirements of U.S. securities laws.

On October 31, 2018, the SEC adopted the Modernization of Property Disclosures for Mining Registrants (the “New Rule”), introducing significant changes to the existing mining disclosure framework to better align it with international industry and regulatory practice, including Canadian National Instrument 43-101 - Standards of Disclosure for Mineral Projects (“NI 43-101”), a rule developed by the Canadian Securities Administrators (the “CSA”) that establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. The New Rule was codified as 17 CFR Subpart 220.1300 and 229.601(b)(96) (collectively, “S-K 1300”) and replaced SEC Industry Guide 7. Pursuant to the New Rule, issuers are required to comply with S-K 1300 as of their annual reports for the first fiscal year beginning on or after January 1, 2021, and earlier in certain circumstances.

As such, all mineral estimates constituting mining operations that are material to our business or financial condition included in this Quarterly Report, and in the documents incorporated by reference herein, have been prepared in accordance with both S-K 1300 and NI 43-101 and are supported by pre-feasibility studies and/or initial assessments prepared in accordance with both the requirements of S-K 1300 and NI 43-101. S-K 1300 and NI 43-101 both provide for the disclosure of: (i) “Inferred Mineral Resources,” which investors should understand have the lowest level of geological confidence of all mineral resources and thus may not be considered when assessing the economic viability of a mining project and may not be converted to a Mineral Reserve; (ii) “Indicated Mineral Resources,” which investors should understand have a lower level of confidence than that of a “Measured Mineral Resource” and thus may be converted only to a “Probable Mineral Reserve”; and (iii) “Measured Mineral Resources,” which investors should understand have sufficient geological certainty to be converted to a “Proven Mineral Reserve” or to a “Probable Mineral Reserve.” Investors are cautioned not to assume that all or any part of Measured or Indicated Mineral Resources will ever be converted into Mineral Reserves as defined by S-K 1300 or NI 43-101. Investors are cautioned not to assume that all or any part of an Inferred Mineral Resource exists or is economically or legally mineable, or that an Inferred Mineral Resource will ever be upgraded to a higher category.

All mineral disclosure reported in this Quarterly Report has been prepared in accordance with the definitions of both S-K 1300 and NI 43-101.

PART I

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

ENERGY FUELS INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(unaudited) (Expressed in thousands of U.S. dollars, except per share amounts)


	Three months ended
	March 31,
		2022		2021
Revenues

Vanadium concentrates		$	2,412	$	—

Alternate Feed Materials processing and other		525		353
Total revenues		2,937		353
Costs and expenses applicable to revenues

Costs and expenses applicable to vanadium concentrates		1,229		—


Underutilized capacity production costs applicable to Rare Earth concentrates		1,663		—
Total costs and expenses applicable to revenues		2,892		—
Other operating costs

Development, permitting and land holding		1,173		3,371
Standby costs		3,475		2,135


Accretion of asset retirement obligation		394		321
Selling costs		9		—

General and administration		5,207		3,373
Total operating loss		(10,213)		(8,847)


Interest expense		(9)		(16)
Other loss		(4,508)		(2,047)
Net loss		(14,730)		(10,910)

Items that may be reclassified in the future to profit and loss
Foreign currency translation adjustment		1,766		353

Other comprehensive income		1,766		353
Comprehensive loss		$	(12,964)	$	(10,557)

Net loss attributable to:
Owners of the Company		$	(14,729)	$	(10,908)
Non-controlling interests		(1)		(2)
		$	(14,730)	$	(10,910)
Comprehensive loss attributable to:
Owners of the Company		$	(12,963)	$	(10,555)
Non-controlling interests		(1)		(2)
		$	(12,964)	$	(10,557)

Basic and diluted net loss per common share		$	(0.09)	$	(0.08)

See accompanying notes to the condensed consolidated financial statements.

ENERGY FUELS INC.

Condensed Consolidated Balance Sheets

(unaudited) (Expressed in thousands of U.S. dollars, except share amounts)


	March 31, 2022		December 31, 2021
ASSETS
Current assets
Cash and cash equivalents	$	105,169	$	112,517
Marketable securities	611		494
Trade and other receivables, net of allowance for credit losses of $223 and $223, respectively	3,672		3,954
Inventories, net	29,709		30,772
Prepaid expenses and other assets	2,454		1,568
Total current assets	141,615		149,305
Other long-term receivables	1,625		—
Inventories, net	1,647		1,368
Operating lease right of use asset	340		408
Investments accounted for at fair value	35,636		38,538
Property, plant and equipment, net	21,385		21,983
Mineral properties, net	83,539

SEC Form 10-Q filed by Energy Fuels Inc