Energy Fuels Inc.

Good morning. My name is Janie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Energy Fuels second quarter 2025 conference call. All lines have been placed on you to prevent any background noise. After the speaker's remarks, there will be a question and answer session where you will be able to ask one question and one follow-up question, should you desire. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, please press star 1 again. Thank you. Mr. Chalmers, you may begin your conference.

Thank you, Jeanne, and thank you for that introduction. Again, Mark Chalmers, CEO of Energy Fuels, and thank you for joining our Q2 conference call today. And I can say with absolute confidence that we had a big quarter with regard to momentum on many fronts, and I don't believe our timing could be any better. Namely, rapidly advancement of our uranium production with very high grades being mined, dropping unit cost, increasing production rates as we ramp up to 2 million pounds per year, and we expect the pinyon plane costs looking forward to be around $23 to $30 per pound of finished goods of uranium, which are exceptional, and Q1 cost. We're also rapidly advancing our rare earth separations with the expansion of the White Mesa Mill Phase II and significantly improved rare earth pricing, particularly ex-China, where the prices Ex-China for DY and TB are approximately 350% higher than China prices. And at the same time, NDPR prices are up about 20% in the mid-70s in the last month. Our heavy mineral sands portfolio is also rapidly advancing. So there's no shortage of things to do with energy fuels. We received our final regulatory approvals on the Donnell project, which is rich in heavies. We're also advancing our feasibility study and nearing the completion of our feasibility study on Toliara and the other agreements with the Madagascar government and the permits and drilling at Bahia. We have improving financial results and we've strengthened balance sheet as compared to Q1. 25, our costs and margins of uranium production are improving materially as pinyon plane ore is planned to be processed starting in Q4. No pinyon plane ore has been processed as of this date. As I typically do, I'm going to be making a short presentation to update listeners on the overall strategy of the company and the state of play of the company. I believe that you're going to be controlling the slides, is that correct?

I will be controlling the slides, yes.

Kim, there will be conference replays available at the completion of this conference call on the website. And as always, there will be time for presentations at the end of this presentation. Nate Bennett, our CFO, and David Friedland, our Executive VP and Chief Legal Counsel, will be available for questions that I'm unable to answer. In addition, it is my pleasure to have Ross Bapu, our new president, with us. While Ross is new to our organization, he is not new to mining. Feel free to ask questions of Ross at the end of the presentation on his past experience in the resource sector or his first impressions on day four with energy fuels. So let's get going. So, again, Our story is different because we are building a global, critically significant, critical mineral company. I always tell everybody I love this picture. This is in San Juan County. It's not far from the White Mesa Mill, which is our critical mineral hub that is advancing in leaps and bounds. Next slide.

Okay, I may be making some forward-looking statements.

Those are included on page two of this presentation. Next slide. Again, many of you have seen this. Really, energy fuels is basically three businesses in one with the three sectors that we've been advancing and focused and built around our core uranium business. which, as I said, is ramping up very quickly and turning into immediate cash flow at large scale and low cost. I believe largest scale and lowest cost in the entire United States and competitively lower quartile in the entire world. And we're very excited. We'll talk more about that. Certainly, the rare earths were emerging as a global leader. on the rare earth fronts with our ability to separate NDPR, BY, and TB, and heavy mineral sands with the heavy mineral sands projects that we've acquired for titanium and zirconium minerals. So really three sectors basically in one company energy fuels, which those three in one equates to about 10 critical elements, which gives us broad diversification and sort of the peaks and valleys in the volatility of a lot of the critical minerals that we've seen over the last couple years. But all three of these segments have one common denominator, and it has the natural occurring uranium, which is all our basically significant advantage that we have as a company and our ability to deal with that at the White Mesa Mill. Next slide. All of this. is in demand you're hearing about these critical minerals every day whether it be for energy defense mobility health or improvements in electrification uranium certainly the focus on fuel for clean base load energy data centers space travel uranium is back front and center globally and particularly in the united states and developing countries where you're now seeing bipartisan support. Rare earth energy fuels is becoming a leading producer of rare earth oxides, also used in energy efficiency, automotive, advanced manufacturing, defense and robotics and other technologies. The heavy mineral sands projects that we've acquired are world scale, world class. and basically contain the titanium and zirconium minerals and monazite. So that is part of those three sectors that we have that all fit perfectly together. We also are a leading producer of vanadium, and we have a vanadium circuit at the mill. It's currently not operating, but it is the only conventional vanadium circuit in the United States, and it is also a critical mineral. Medical isotopes, we're still advancing our R&D work on the potential to recover radium for emerging medical technologies. Next slide. Uranium highlights. We're producing more uranium than anybody else in the U.S. today. We're mining high-grade ore. As many of you will have seen in Q2, we mined newly mined ore of over 660,000 pounds of uranium, which was from both the Pinyon Plain mine, LaSalle, and Pandora mines. Now, if you extrapolated out that 665,000 pounds, that would be 2.7 million pound rate. So, again, we had very high grades at that point in time. We're not changing our guidance at this point in time but it just gives some example of capacity when the right stars align in 2025 um our guidance so we haven't changed it yet uh is between 875 to 1.4 million pounds of uranium newly mined uranium where you can see what we produce in a quarter so we're really getting all the pieces in place when it comes to our mining including additional trucks to haul the ore from the pinyon plain mine to the mill. But again, this is all ramping up very quickly. And working towards a 2 million pound run rate, which many of you know I've been talking about for years, well, we're getting there. And this is a run rate that we don't require a lot of capital. We've already spent the capital, and it really is just getting the mining going, getting the miners hired, getting the reagents in place. But it It is also going to be at very attractive cost. So watch this space as we ramp up the mining, which then goes to processing. So processing at the White Mesa Mill, while we're also building significant inventories at the mill, in the first half of the year we produced 330,000 pounds of finished uranium, and most of that was a mixture of LaSalle ore alternate feed and cleanup material. So it wasn't at this ultra-high grade that we have at the Pinion Plain Mine. So for 2025, we expect to have finished uranium between 700,000 pounds and 1 million pounds by the end of the year. And one of the reasons it's not more is we're preparing the mill to run hard. The mill has not been asked to run this hard for decades. So there's a lot of work that's being done on the mill. There's a lot of ore that's being mined and delivered to the mill to get that material to be available for feed as the mill starts up. And we're also looking at things like critical spares because, again, the mill hasn't run this hard. So there's a lot of work going on. But when the mill is actually running with pinion-pointing ore, it can be doing approximately between 230 and 250,000 pounds of finished uranium per month that it runs. So there is a bit of a lead lag between the time we mine things and we process things and we do a campaign run. And I think that's important, and we'll go into more detail today on that because it's important for investors and analysts to understand those dynamics. Next slide. So uranium moving forward, the newly mined ore. I expect that we're going to be able to mine 1.6 million pounds per year or greater going forward from 2026. We still have a lot of exploration to do in the juniper zone, but what we're seeing, we're super encouraged with the grades we're seeing, the increases in uranium that we're finding in the main zone, the juniper zone, and literally pretty much everywhere we drill, we're seeing to find additional ore, but we have more work to do on that front. The mill run, the next mill run is planned to be beginning of October, and that's going to go from kind of Q4 into 26. Well, this mill run, the next mill run, we expect to produce between about 1.1 to 1.4 million pounds of finished uranium during that run. When you look at pinyon plain, and this is what's extraordinary. On average, pinyon plain ore mining and transport costs are expected to be $10 to $14 a pound recovered. That is remarkable. And when you look at that after it's processed, so now for $10 to $14 a pound, it's delivered. And then when you process that ore, the cost of processing is about $13 to $16 per pound. So when you combine those, that's when you get cost of $23. to $30 per pound recovered. And we believe those are absolutely exceptional to our peers, not just the United States, but globally. So right now, when you look at our cost of goods currently, we have 725,000 pounds in inventory of finished goods. And those are currently on the books between $50 and $55 per pound And a lot of those pounds need to be sold at that cost of goods pricing at those prices because that was the cost of making those pounds. So as we ramp up our uranium production, particularly with these lower costs at pinyon plain, alternate feed, and other mining feeds from wherever we're getting from, Pandora or LaSalle, we see these weighted costs to start dropping significantly. And we expect them to be between $30 to $40 per pound in Q1 of 26. But as more pinyon plane ore is mined, these costs should continue to drop. So, you know, we're in a position where we have to clear out the existing cost of goods in inventory to this transition as we ramp up our uranium production and get the economics of scale and the benefits of the higher grades. Next slide. So, pinyon plane ore. And I've said this to many of you, I built that mine 38 years ago, and it is exceeding my expectations on every front with regard to the grades, the low cost, and larger than originally expected with upside expiration potential. In an earlier part of my career, I mined four breccia pipes. As a matter of fact, the largest, most successful breccia pipe Evermine on the Arizona Strip was HAC2, and it was about 7 million pounds of uranium. And it is my hope that pinyon plane is going to be much better than HAC2, but we still have exploration to do to further quantify that. But it absolutely has better grades than HAC2, so that's a really great outcome for our company, particularly at this point in time. You know, we discussed, as I said, we mined over 600,000 pounds in the three months ending June 30th. Great outcome. The grades have been double, in some cases triple, what we expected in certain areas. We likely believe that there's going to be more ore in what we call the main zone. And then when we shift to the juniper zone, which is lesser explored, And it starts just literally a few hundred feet, 100 to 200 feet below the main zone. The recent exploration drilling that we've done has confirmed super high-grade areas just below the main zone. So we're driving drift down to that lower zone, and we'll be putting in additional drill stations to expand that. Approximately half of the breccia pipe that this ore is contained in has had very limited expiration. So that's why we're really encouraged about the upside. So in the little box, that little yellow box, I talked about the $23 to $30 per pound really commencing in Q4 of 25 and going into 26 as we are able to deplete this existing cost of goods sold that I mentioned at that $50 to $55 per pound and shift over to more pinion plane or our cost of sales will drop materially. And as I said before, and I want to repeat, none of the high-grade from pinion plane has been processed to date. We have to get that ore processed where we see those very low costs that I mentioned about getting that material to the mill at these exceptional costs. Next slide. So we continue to grow our portfolio of long-term uranium sales contracts. We have four existing contracts. We are continuing to look at other opportunities as they present, and particularly as they present with the growing uranium production that we are seeing and expecting this year and into next year and on for a number of years. We have 300,000 pounds of contract deliveries that are happening in the last two quarters of this year. So you're going to see a real increase on our contract sales coming in strong. But we also have the ability to make spot sales if we elect to, even in 2025, 26 going forward. We will have plenty of finished goods to do that if we elect to. There has been a reluctance for us to put product into the market. at like the $70 per pound. We did sell a small amount for $77 a pound. We still believe the price of uranium is going up. And so we're going to just play that by ear, but we're really looking at ramping up our revenue stream and our margins over the next, literally over the next few months. We also have an agreement to purchase ore from a third-party miner not too far from the mill, and we have ore coming in from that third party at this time. Next slide. Let's – oh, sorry, I flipped one page too soon. Okay, so we'll shift gears from uranium to rare earths and heavy mineral sands. As I said earlier, we're making rapid progress on that front and really getting a lot of recognition as an emerging, rapidly expanding producer of rare earth oxides. NDPR that we've made with our phase one run that we did last year is currently being validated with a number of metal, alloy, and magnet manufacturers. I'm very encouraged with the results that we're getting from that feedback. You know, we announced the arrangement or the relationship with POSCO. We're piloting heavy rare earths as we speak, and we've had a few releases on that. We plan to have one kilogram of DY oxide, 99.5 pure in August this month, expanding that to about 15 kilograms of DY by October of 25, and then a kilogram of TB expected 99.99% pure in October. So all that information gives us the ability to to have our plans solidly in place for going towards a commercial production plant quite rapidly as these things evolve. And we have the technical ability to produce all the rare earth oxides that are currently under Chinese export restrictions. We are advancing the phase two feasibility study at the mill. That should be completed October, November. And that increases the capacity to produce monazite or process monazite from 10,000 tons, which is our phase one capability, to 60,000 tons per year of monazite. And that is equivalent to Linus scale. So this is a large-scale facility in the United States of America. The final investment decision on Donald is still pending. It could be as early as December of 2025. but it is fully permitted, shovel-ready, heavy mineral sands project with exceptional heavy rare earth oxides, very high grade, over 2% DY, about 0.4% TB. So we're really excited about that, and very few companies have fully permitted projects that are shovel-ready. We're also advancing TOLIAR project in Madagascar. We're advancing the final investment agreements under negotiation with the government. And the TOLIAR feasibility study is very advanced and should be out fairly soon. But we've got to make sure that we clear all the final reviews by legal and whatnot, particularly with regard to United States compliance. But the final investment decision for TOLIAR could be as early as 2026. Next slide. Let's talk about monazite because monazite is our structural advantage in the rare earth business, the ability to process it at the White Mesa Mill, and it is simply a superior rare earth mineral concentrate. Super high grade, 50 to 60%, more NDPR, more mids, more heavies, lower cost, includes a credit for uranium. easy to process, and high recoveries, and we are the only facility in the United States that can process monocyte. Those pictures on the side, those are commercial-scale recovery SX circuit. Most people are still doing things on a desk or on a lab scale, and this is a commercial facility that operates in below one-ton bags, super sacks of NDPR, not in a beaker. So we have proven our ability to produce NDBR at specification, and we're rapidly advancing the ability with our piloting and our future plans for commercial scale recovery of both the mid and the heavy rare earth oxides. It could be used for defense needs. Next slide. So growing leader in the industry. If you compare our market cap to MP and Linus, we're the third largest publicly traded company outside of China in the world focused on these critical minerals and rare earths. I've talked about certainly the heavy rare earths are in high demand and a shortage because the world is so dependent on rare earths, heavy rare earths, particularly from China. And we talked about the work that we're doing on the separations. The Donald Project is a world-leading heavies deposit, and the concentrations that we have, as I mentioned, it's shovel-ready, it's permitted, and with the rising prices of rare earth oxides, and particularly the growth in the heavies, we are absolutely in a fantastic spot. Benchmark has done a new update of both in China and out of China prices. NDPR prices have gone up about 20% in the mid-70s, as I mentioned. But what is really extraordinary is Benchmark is publicizing DY prices in Europe of $800 per kilogram as compared to 230 in China. So that's almost three and a half times higher than And when you look at TB, it's effectively the same thing, that the China price is around $1,000 per ton, but in Europe it's $3,600, which is 3.6 times. So this is really an unusual circumstance that we have where people are saying they will pay more than China prices for products that are not coming out of China. Next slide. So this timeline, you know, many of you have seen this before. As we're advancing, you know, the Donald project, the Bahia project, the Toliara project, those all equate to Linus scale and due course once those are fully permitted, constructed, and operating. But at the bottom, I just want to highlight that we are ramping up this uranium production from 2 million pounds and due course could be up to 5 million pounds. while the uranium sector of our business is generating material cash. Material cash. And when you look at the margins that we can generate with the increased uranium production and even current uranium prices, it is extraordinary. Next slide. We'll talk a bit about our financials. Next slide. So, really, producing low cost, Uranium, end of June 30th, developing Tier 1 critical mineral assets, maintaining a strong balance sheet. We had liquidity at the end of June 30th of over $250 million. That's about $253 million of working capital. A large component of that is cash, cash equivalents, and liquid market securities, and also inventories and various trade receivables. The finished product inventory was nearly $60 million, and if you add that at current commodity prices, you could add about $13 million to liquidity. I talked about the finished goods of uranium. We also have nearly a million pounds of anadium, 9,000 kilograms of separated NDPR and carbonate. and, well, I should say 9,000 kilograms of high-purity partially-separated mixed rare earth carbonate and 37,000 kilograms of separated NDPR in inventory. No debt. We have a lot of assets and no debt, and that in itself is exceptional. We did have a net loss in Q2, really on a number of factors, but mainly we elected not to sell a bunch of uranium due to the low and weak uranium prices. We're also spending a lot of money on development and general operating costs to advance these three projects that we have. The net loss was $22 million, or 10 cents a share. That is an improvement from Q1, which was a net loss of $26 million and 13 cents a share. And as we start getting to this increased uranium production, the pinyon plane ore and everything, you should see a very dramatic improvement because of the investments we've made and the positioning and the momentum that we're securing there. We did sell 50,000 pounds of uranium at $77 per pound. I think I've mentioned to a number of you that I don't want to sell uranium below $80 a pound. We took a small sale there. But we, again, are focused on cash flow and our margins. and moving the uranium sector to profitability as quickly as we can. We did have a 31% margin on that material that we sold. Next slide. Let's go back to the kind of the wrap-up on uranium. We're actively mining ore, three conventional mines. We're actively processing uranium ore, including alternate feeds and cleanup material at the mill. increasing levels of contract sales, as I mentioned, later this year into next year, and building on that going forward. The cost of goods is going to go down, trending lower, starting in Q4 with the low-cost pinion ore being processed. We will opportunistically look at selling uranium on the spot or in the midterm markets. Again, we'll play that by ear. But we are actively looking for a home for a lot of the uranium that we'll have that will be marketable and sellable at short notice. We are increasing the uranium production up to around that 2 million pounds plus. And as I mentioned, we expect the Pinyon Plain mine to be producing 1.6 million pounds or greater. So you can see we're going to get there with alternate feed and the other feeds that we have from the other mines. We are advancing the permitting on three large-scale uranium mines. We have the Roca Honda on the FAS 41 government list. And we can increase production over time beyond the 2 million pounds up to 4 to 6 million pounds. And we're continuing to do the R&D on the radium recovery, which potentially can be used for medical isotope cancer treatments. Next slide. So we haven't materially changed our guidance on any front, but I do want to point out a few things because I think this slide says a lot, and it's important, certainly for analysts, that as we mine the uranium, that doesn't mean it's instantly processed. So we have guidance of 875,000 pounds to 1.435 million pounds, but I want to point out we did over 600,000 pounds in a single quarter. So if we're mining uranium at full tilt, We can get well past that, but we're keeping guidance where it is right now because we're ramping up our trucking and we're getting our mining fully in place. The alternate feed, we haven't changed anything, but alternate feed still is a very material part of our business, up to 200,000 pounds for the year. The processing of uranium, the 700 to 1 million pounds. I talked about getting the mill ready, the critical spares ready. when the mill's running Pinion Point Ore, 230,000 to 250,000 pounds of finished goods per month when the mill's running. So you can see you run it for four months or six months or seven months or eight months reliably, and you get large quantities of finished goods at large margins. Sales under contract in the small sale that we did earlier at 350,000 pounds, we are going to focus on making spot sales, if it makes sense, or additional contracts to find a home for some of that product. Finished goods, by the end of the year, and again, this could be subject to any spot sales, but between 900 and 1.2 million pounds of finished goods, that is enough for all our contracts this year, next year, matter of fact, all the way through next year, depending on how many pounds we sell under spot. So total inventories at the end of the year, between about 2 million and 2.5 million pounds. Now, if you go up just to the next level above, you can see a big chunk of that is finished pounds, but it's also pin and plane pounds that are yet to be processed. Next slide and last slide, 2025 activities for the rare earths and heavy mineral sands. We are looking at potentially being in a position to commercially produce heavies in 2026 following our current uranium run. But we definitely will have the piloting complete, and we'll be looking at how we can ramp that up and do course. And only Energy Fuels has unique capabilities in how we can respond and do a lot of these things that others can't do because of our unique capabilities at the White Mesa Mill. The phase two rare earth expansion at the White Mesa Mill, which is the complete separate facility, separate from the Iranian Mill, have the capacity of 6,000 tons of NDPR, which is 6,000 tons of monazite, and also the ability to produce DY and TB. And we should have the feasibility study out in a few months' time. We're currently piloting the heavies, as I mentioned. The Donald Project FID could be as early as this year, later this year. Potential offtake sales financing options are being evaluated, including the increased cost and value – not cost, but value of the heavies. Totally our project, we're getting close to finalizing the feasibility study, but also – could well be in a position to make a final investment decision as early as 2026. We're pursuing the final agreements at Toliara that basically memorialize and formalize the fiscal terms with the government of Madagascar. And the drilling at Brazil and permitting of the Bahia project is advancing. We hope to have a resource estimate soon, later, 25 or 26. And front and center is developing a final comprehensive project financing strategy because we have a lot of projects, but we, again, are going to maximize this uranium sector to generate as much cash as possible and take off some of the burn on these other two sectors that are developing rapidly. So I'll stop there and say I'll now open it for questions that anybody might want to ask.

At this time, I would like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad. And your first question comes from the line of Nick Giles with B. Reilly Security. Please go ahead.

Thank you very much, Operator, and good morning, everyone. My first question, you know, obviously there's a ton of excitement across rare earths, and, you know, I have to imagine others are trying to have discussions with agencies like the DOD that I think you hinted to last quarter for potential offtake in funding. So my question is really, what do you feel is the most critical differentiator, specifically in the eyes of those agencies, that gives you a greater likelihood for either offtake or funding and so on? Thank you.

Well, I think when we say we're going to do something, we do it. And we also have the infrastructure to actually do it. You can take people to the White Mesa Mill, and there's a built operable site with 100-plus people working there, laboratories, a phase one separation circuit. You've got product that has been qualified by some of the end users. And you see the number of projects that we've accumulated. I mean, we're not just a one-mine company. I mean, we have Bahia, we have the Donald Project, we have Toliara, we have an agreement with Chemours, we secured the monazite from Florida and Georgia. So what they see is scale, low cost, infrastructure in place, and the skills required to advance. And I think that really sums it up at a high level. And you can go touch and feel it. You know, it's interesting. A lot of people are in D.C. talking about their projects. Well, they don't have any project. They have a PowerPoint presentation. And we actually have a fully constructed site and multiple projects that are advancing, in a lot of cases, permitted to advance. The molecules. We're the molecule machine. And a lot of people are short of molecules.

Mark, I appreciate that perspective. Maybe just to follow up on Can you just walk us through your plans to procure sufficient levels of feedstock as we think about processing as early as Q426? I mean, should we think about this is coming from Chemours, or could you explore, you know, other sources outside the scope of energy fuels?

Yeah, that's a good question, because really on the rare earth front, we're constrained on feedstock. I mean, right now the only feedstock we have is what we get from Chemours, and they, once or twice a year, they send us a few hundred tons, and we're stockpiling. We're getting a fairly reasonable stockpile built up. But there are other companies that come to us and ask if we would be willing to procure monazite from them, and it could be from pretty much any place in the world. A lot of them are shipping to China right now. There are companies from Australia and the United States that are still shipping monazite to China. It's not a good look. So we're always open to looking at what opportunities may be out there to procure additional material and stockpile it at the White Mesa Mill and then run it in due course. So it's dynamic. I don't have a complete answer there. But we're building up inventories. We're still talking to people about buying inventories. But once we get projects like the Donald project, if it passes the final investment decision, it gets built, then we start having world material commercial scales that are coming from our own operations that we can depend on because it will be coming at a regular rate and an expanding rate as we get these progressive projects in line and operating.

Mark and team, Thanks for the update this morning and continued best of luck. Thank you.

Your next question comes from the line of Heiko Ehler with H.C. Wainwright. Please go ahead.

Hey, Morgan team. Congrats on another good quarter. It's been nice to watch you guys transform the farm over the last few years here. Let's talk about pinyon pine a little bit. The site is obviously a big driver for the farm right now. I mean, I searched your press release and pinyon pine has mentioned a couple 20 times in it. You mentioned $23 to $30 per pound in costs earlier on this call. And in the release, you actually break it down 10 to 14 for transport and 13 to 16 for milling costs. Great margin at those prices. Let's talk about what things could move us from the lower to the upper end of this guidance range, if you'd be so kind. I mean, especially on the mining and transport, you've got a 40% range. And is it labor? I mean, you know the milk quite well, so I assume there's only so much variability there in that part.

Yeah, Heiko, I mean, on the guidance, we're always trying to be conservative on our guidance. And, you know, I was trying to hint a bit that if we did 600,000 pounds in a quarter, you know, we can put a lot of pounds out there or send it to the mill. Our biggest limitation has been the truck and trucking from the mill, and we're building that up. We currently have about 10 trucks per day, five days a week, and we're trying to get that up to, well, it will average no more than on an average on a daily basis, seven days a week. no more than 10 trucks per day. But that's really the limitation. I can tell you if there was no limitation on the amount of ore that we're hauling from the mill or to the mill, we could be putting a lot of more uranium down on the ground right now. But what we're doing is as we're producing the uranium, we're also doing the required development work down to the juniper zone as we or advancing the development there so that we can put in additional drill stations and we can do more drilling. So we're trying to keep it balanced. But, yeah, the trucking is the major impediment there, but we're working to resolve that and we're building up momentum on that front. And also it's grade dependent. So you have to have the trucks and you have to have the grade. The average grade we've mined thus far has been about 2%. which is very, very high grade, so you can get about 30 pounds per ton in every truck. And so that's the reason for the range. You know, we hope to beat guidance, okay, but we haven't changed the guidance. And our goal is always to exceed guidance, but until we have all those pieces together, Heiko, we're being a little conservative.

Fair enough, fair enough. One can read between the lines here a little bit better now. Completely different question. You have the strongest balance sheet the firm has ever had since I started following it the way it is right now. Arguably, this is even more impressive given your recent M&A. Conceptually, has your internal thought process on minimum cash or minimum working capital changed over the past, call it, 12 or 24 months?

Well, look, we've got a lot of activities, Heiko, and a lot of these activities could require cash in different shapes and form, whether it be an M&A transaction potentially. It could be some of the certification payments required for Toliara, which can take a pretty large load on us. I've always been of the believer to have a very strong balance sheet, because Murphy's out there somewhere. But I think really from a management perspective and a board perspective, the focus has been just to maintain that strong balance sheet, to have plenty of cash, and be in a position that we are not short cash, because the last thing you want to be in this business is short cash, particularly when your success makes you short of cash, depending on what makes you short of cash. Yeah.

Okay. Fair enough. I'll leave it at that and get back to you.

Thank you, Mark and team. Congratulations. Thank you.

Your next question comes from the line of Katie LaChapelle with Canaccord Genuity. Please go ahead.

Hey, Mark and team. Thanks for taking my question. Two days ago, we actually saw some reports out of Australia that the Australian government is considering setting a floor price to support critical minerals projects, specifically rare earth. So that'd be very similar to what the DOD did with MP materials. I'm just wondering in your discussions with you and your partners at ASTRON, have you been in discussions with the Australian government regarding potential funding support for the Donald project or potential floor prices? And then similarly, do you also think you could see similar support from the US government?

Yes, Katie, thanks for calling in. Yeah, this whole world is talking about floor pricings to provide some protection to China manipulation and China costs. Yeah, we have had discussions with Astron. I've had discussions with the Australian government on all these things, similarly to what we've had discussions with the U.S. government. I think the realization is that you will never be able to material breakaway from China unless you have some level of support. And so I'm very encouraged with these announcements and what we're seeing with MP because it just gives an insurance policy that China isn't going to flood the market and put you out of business. So, you know, it's all a work in progress. I mean, really, when you think about it, the floor pricing discussions are fairly recent. You know, they've come out over the last month or so, month or two, but it obviously is getting additional traction. So, Again, I think we're ideally placed, you know, as I mentioned, when you look at MP and Linus, and we're the third largest market cap publicly traded rare earth company out there, and you look at the scale that we have, you know, I mean, I think we're just so well positioned that, you know, the activities we've had, Katie, over the last five years with the acquisitions and the, you know, advancement of our processing just puts us in a very, very unique position.

Definitely. Then maybe one follow-up on potential support from the U.S. government. Are you of the view that the U.S. government will be more likely to allocate funding or support towards the expansion at White Mesa, or do you think they would extend beyond the United States and actually look to potentially provide support on the development projects to Liara and Donald?

Yeah. But I think the U.S. government, in the first instance, prefers to advance and fund projects that are in the United States. But you also have to get back to the realities of the United States. With the exception of mountain paths, you know, there really aren't a lot of quality rare earth deposits in the United States. I mean, you look at the monazite we get from Chemours and Florida and Georgia, it's high in heavies. So I think they prefer the United States, but they recognize they have to have a global footprint. I mean, you look at how they've reached out to Australia in a number of cases, certainly Canada and even into Africa. The U.S. government is interested in securing reliable material scales so that they have some geographic diversity. So, I mean, they prefer, but yet at the same time, the realities are there are not a lot of heavies in the United States of America. unless it comes really from the monazite. And in the case for us, you have the Donald Project in Australia, which is high and heavy. But we think the appetite is there from a number of different angles with the U.S. government to help finance projects globally. And it could be floor prices alone would be sufficient.

Awesome. Thanks, Mark and Dean.

Your next question comes from the line of Justin Chan with SCP Resource Finance. Please go ahead.

Hi, Mark and team. Congrats on being where the puck is starting to go early. Strategies coming together. Just a few questions. One is on Astron and Donald. So just to confirm the financial side of things and FID, Can I confirm that so you will essentially make a payment if you both elect to go ahead with the project of 183 Aussie million, and that will secure your 49%, and then that amount is payable towards your share of CapEx, or would your share of CapEx for Donald be in addition to that 183 million?

No, no, the 183 million is really – our buy-in to the project and the equity portion is really what it's geared around. Both parties will have to pay their own debt portion, put a lot on their share, and any additional equity that might be required to obtain financing. But yeah, it's really our buy-in. And Dave, I don't know if you want to add anything to that.

No, that's right. The 183 would basically cover the equity contributions of both parties, and that would be our buy-in. Our buy-in would be paying Astron's equity contribution, and then we would pay our own, and that would all total $183 million. And as Mark says, if that increases at all due to financing needs, that would be paid pro rata by the partner.

So basically our buy-in on that project was about $60 million or thereabouts? Yes. And so far, I mean, with some of the pre-fit work and everything, I think we've invested about $20 million or something around that at this point in time. So, yeah, we're pleased that we have that project, and we have that project permitted, and it's at a good address in Australia and permitted.

Gotcha. So just to make sure I'm clear on this, so that 183 goes into – let's say the Donald Project Co., or does that go to Astron? And then I'm just trying to calculate, like, what the balance to fund is.

Yeah, it goes into the joint venture.

Yeah. Right. So then that 183 is available for both of you?

Yeah, the 183 goes into expenditures by the joint venture in advancing the project.

Right. So you could effectively, as a group, net fund the remainder then? Yes, absolutely.

Okay, thank you. Mark said that's Australian dollars.

Yeah. They're a lot smaller than U.S. dollars. Yeah. Okay, gotcha.

And then could you maybe talk us towards sort of what the next steps are for confirming FID there now that it's got its permits? Is it just investigating offtake? There was a revised capital estimate, I think, less than a year ago. I'm just curious what the next steps are.

Yeah, it's really focused on bankable offtakes, both for the heavy metal sands and the rare earth products is really what it boils down to. And we're looking at that in relationship to the capital operating costs, returns on the project, So that's really the bid is getting the bankable offtakes, securing financing, and, you know, getting the position, the project ready to go into construction. The project is, you know, ready to go into construction right now. If you had all that done, you could go into construction quite quickly. But, you know, it's not over until you get all the money to do the project. It is relative to the rare earth world. You know, it's a pretty small strike rate. I mean, if you look at in U.S. dollars, it's around $300 million for the project to combine both parties in terms of, you know. So, yeah, watch this space, Justin, but we've really got to get the bankable offtakes and be in a position to get the financing to make the fit decisions. Gotcha.

Maybe just a bit more color on that. So is it off takes more on the titanium and zircon products or on the rare side of things or both?

Both. Okay. Gotcha.

Perfect. Thanks. And then on pinion plane especially, I mean, you've been way up performing the reserve grade. The drilling's been encouraging. Just wondering what your timelines are on putting out an updated either reserve or mine plan to help the market kind of start pricing this into the long-term outlook for your company?

Yeah, we've got SLR working on that right now. I don't know, Dave, have you heard the exact timeline on that? I mean, they've got some stuff that's still in the laboratories for analysis, and they're pulling together. You know, what's interesting about the opinion playing, and Justin, you'll appreciate this, is that, you know, what we think we're seeing is that when the original modeling was done, the model constrained on high grades and the area influence of the high grades to be conservative. And what we've seen and what we think we've seen is that we didn't need to constrain it because those high grades actually worked could be projected out for quite a large distance. So that's why we're getting this significant increase. Also, even though we've done drilling in the juniper zone, as I mentioned, over half of that juniper zone still has a whole pile of drilling to do. So I think what you're going to see fairly soon, probably I'm guessing by the end of the year, an update on the resource, and then there's going to be this geologic potential to expand this further. And what you're also seeing is that when you look at some of these grades, like 5%, 7%, you can fit a lot of uranium in a very small space like you see in Athabasca. Effectively, the pinyon plane mine is a miniature Athabasca mine with the grades that we're seeing. And it doesn't take a lot of space to hide a lot of pounds if it's very high grade.

Yeah, absolutely. Yeah, it's doing great. Just can't wait for –

I guess more data to just price it into the long term. And then just one on, I guess, Toliara and maybe the rare earth master plan here. In terms of, I guess, pressing the button on the phase two expansion for White Mesa, do you imagine that you would, that would be around the same time as FID on Toliara, i.e. you were mentioning you could make that decision next year?

Yeah. I mean, right now, our main focus is on the projects that we have that are fully permitted and can go forward right now. So when you have Donald, you have the ability to receive material from Chemours, and you can receive from others. And then you look at where we are with the White Mesa Mill. Now, we still have to submit our Phase II documentation to the state of Utah for final approval. I don't believe that we may pull the trigger on phase two even without all the permits in place on Toliara. Now, in the perfect world, we'd like to have both, right? But it takes time, and how we phase things is still a work in progress, Justin. But, you know, we want to have the larger scale. We want to have the separate plant and the ability – to process both uranium ores unimpeded and rare earth ores unimpeded as soon as we can. And, you know, we'll just be evaluating how best to do that. So just quickly, the pinyon plane resource update should be December, not to change topics. But we see the expansion of the White Mesa Mill in the United States as something very attractive for whether it be the government, or even private parties because of its ability to produce monocyte. And, you know, we'll just see how that unfolds with the various other projects we have.

Your next question comes from the line of Zach Perry with Robertson Stevens. Please go ahead.

Hey, Mark. Congratulations on having a good quarter. People have really kind of, poked at the financing of rare earths, obviously, as the big geopolitical game, as I've always said. And I hate to have you try to read the mind of the government, but does the U.S. government understand both the structure of your supply chain, what you need to do, and if you get to scale your superior volume and cost structure? Because if so, you would think that you guys would be a very high priority after they sort of walked in with saving MP.

Yeah. Look, Zach, thanks for calling in. I think with the U.S. government, it's part of it's an education process because most of the people in the U.S. government, you know, are not like, you know, rare or technically skilled mining engineers, processing engineers. I mean, they have some of that, but, you know, And, you know, you just have to keep telling your story and showing that you can advance your story. And I think, though, it is resonating with them that there are a lot of stories out there, but there really are only a handful of legitimate stories. I mean, a lot of them are more hopes and wishes and we can do it if you give us money stories. And we're not that. So I think that they're getting more up to speed with how this market interrelates and the importance of each step. And I think they're also aware that they can't have, you know, investment in a single project, that they have to have multiple projects. Because, as you know, Zach, a lot of projects will fail or underproduce or may never produce. So I think they're getting up to speed. But what's remarkable is how keen they are to reshore a lot of these capabilities and get world-scale molecules. And not just world-scale molecules for the Defense Department in the U.S., but, you know, countries like Canada and the European Union, even places like Japan, they need molecules too. And you don't have those mines in Japan. and you don't have those mines in Japan. So it's kind of a global issue. So I think they're getting it more, but it's been a learning process, and it's been a learning process for a lot of people.

Got it. And could your timeline be sped up if the government, you know, pushed fast forward on their support?

Look, money can speed up a lot of things. But, you know, you also have to look at the practicalities, too, because you have things like, you know, how much can you speed up the permitting, how much can you speed up the construction, and, you know, long lead times and things like that. So, yes, it can be sped up. The question is how much. But what's interesting and unique for us is, for example, we have the Phase 1. It's already constructed, and we have Donald permitted. So we can speed up at least to the capacity of phase one for the lights and potentially the heavies quicker than others can. So that's a unique position that energy fuels can do uranium. It can do the rare earths at the phase one scale and or in the future at the phase two scale. So we have stepping stones that others don't have.

Got it. Thanks. And then real quick on uranium. Congrats on proving incredible cost structure. Now, the uranium market has sort of been in a Mexican standoff for, I feel like, a couple years in terms of pricing. Pricing has gone up a lot, but we haven't seen true contracting at what you would expect, high prices needed to create increased supply. And obviously, I think that's what you're waiting for. What actually finally breaks down that standoff where you actually see contract pricing come in at volume at a price that we might think clears the market?

I think it's just the beginning, but I think that the utilities are starting to see where a number of new producers are failing to deliver on time and are struggling. And we've seen that starting to emerge over the last year. And a lot of the discussions we have with utilities is that they need more product. In our case, they flexed up on some of our contracts because they're short of material from new producers that are not producing. So, I mean, there is a pretty active market right now. I mean, we're getting quite a few RFPs coming in. And, again, the term prices are $80 or even higher. So you do have a higher term price than the spot, which I think reflects that the utilities believe that the price is going to be higher, and the ceilings are going higher, and the floors are coming up. So I think all the pieces are in place to, you know, see these improvements in the spot price and the term price going forward.

Your next question comes from the line of Noel Parks with Tui Brothers Investment Research. Please go ahead.

Hi. Just a couple.

You know, I just wonder, and I apologize if you touched on this earlier, but could you just talk a little bit about, you know, there's still all the excitement with the SMRs, versus the different projects for restarting existing legacy reactors. And could you talk a little bit about sort of a reality check on the legacy versus the SMRs and their impact on uranium demand? Because I feel like they tend to get sort of discussed as a little bit lumped together. So any thoughts there would be great.

Yeah, no. Look, the quickest way to increase demand is restart a reactor that's already built. And I think that's surprising people because you're seeing even reactors in the United States that are being restarted. I mean, look at Japan. Japan shut down all these reactors after Fukushima, and they're restarting them. So the demand is going to increase quicker with restarts because, you know, given the six months or a year or two years, they can restart and they have to be reloaded, and you see that, you know, where they have to go out and buy the uranium. SMRs are ways off, quite a ways off. And so I think the disconnect is that it's just that, that the existing – it's really no different. If you have a permitted mill, you can do something with it. If you don't have a permitted mill, you can't. So when you look at it from the mining or processing side of things, So, yeah, I see the restarts as immediate demand, and you can bank on that, particularly when you see big tech companies putting the money into the restarts and the utilities signing an agreement. That's the way to get the demand up quicker. And SMRs are a work in progress, and you're looking out probably at least 2030-ish or so before that starts to become a real factor. But it takes time for all these things. It doesn't matter if you're mining or you're doing nuclear power plants. It takes a lot of time to get the permits and to build them. But I'm really encouraged with what I'm seeing with restarts.

Great. Thanks. And just to clarify a bit for me, so is there a time horizon? And I know I'm asking you to predict the future, which is always hazardous, but Do you have a sense of a threshold where perhaps the SMRs, some of those going to FID, their plans become more concrete where the market starts to sort of backfill a bit and start thinking about what premium, what sort of time premium really should be built into SMRs? the price to sort of make sure that, you know, wherever the demand's coming from, that any given party, you know, can lock in supply and not be the last one trying to crowd through the door. And any sense of an advance of, you know, the S&R going live that you could see the pricing ripple into the market?

Yeah, look, I think that, you know, the best way to get a handle on that is, you know, you go to TradeTech or UX and they have forecasts that are a lot more scientific than I can give you over the phone or on this call. But I do see this, and after being in the business for coming up on 50 years, I don't know how we're going to fill the demand with new uranium projects. And I think when you look at existing projects that are becoming mined out and have to be replaced, whether it is anywhere around the world, You know, if you start to double the demand for nuclear fuel products, you're going to have to double the mining of new uranium. And people haven't explored for uranium for decades in any material way, and I don't know where it's going to come. So I think all these pieces, including, you know, the restarts, SMRs, but also the build rate in China, I don't know where they're going to get all their fuel from.

Your next question comes from the line of Gary Steele. Please go ahead.

Good morning, Mark. Hope you can hear me all right.

I do, Gary. Thanks for calling in.

Absolutely. Absolutely exciting quarter beyond belief after having watched the company for many years. What a treat. A couple of questions. With all the press and excitement around this Ramico thing up in Ranchester, Wyoming, and of course, Mountain Pass. Is there anything you can share or would be at liberty to share regarding any synergies or opportunities with those two projects?

I have to think about that, Gary. I think, again, we go back to this differentiator being monazite, monazite sands, very high-grade, good distributions of NDPR and heavies, and the economics. So, I mean, our strategy is different than theirs. And, you know, for me as a mining engineer, grade is always keen when you're processing things. So, yeah, I mean, I don't really know the synergies between the groups other than we will have probably likely more heavies than any of them. with the projects we have and the monocyte deposits we have. But, you know, everybody in the rare earth space is getting attention right now. And I do think that the realities of the cost of production and the grade of these deposits is really going to, you know, something that's important in the scheme and the economics going forward. And we know with what we've done thus far and the monocyte that we've received and the project we have, that we're gonna be a low cost producer. So we're focusing on being low cost producer and the others will have to do their studies and make sure they can process and do the things that they say they're gonna do.

Sure. Another totally separate question. I assume that your uranium runs and your rare earth runs have to be done separately and involve a clean out and turn around between runs. Is that accurate?

Yeah, we're trying to be flexible here. Right now, it just conceptually, you know, we talked at 2 million pounds per year or thereabouts. That's about an eight-month run or nine-month run. And we can have a window between that run, a uranium run, and the next uranium run and a rare earth run. But we're going to be flexible because we can generate really exceptional margins on the uranium. We've got to have enough rare earth feed to justify a run, but it does take time to switch over. I mean, the mill, you don't just flip a switch. It probably takes a month to retrofit and take certain equipment out of the tanks and whatnot, about a month each direction. So we want to minimize that as much as possible, but we really want to make sure that we're really focused on our best margins for our shareholders going forward. But we have the ability to do both. But it isn't a switch until we have phase two. Okay. Phase two will be completely separate, and they can both run independently, and then we will not have to do that.

So phase two will add new front end to the SX circuit so that you can run both materials independently from one another?

Correct. Completely independent. And, Gary, you know this. The mill has not been ran at capacity for a lot of years. And I think that our best years are ahead of us because I think we are going to need to run both our facilities at or near capacity going forward, including the Phase II plant.

And your final question comes from the line of Aaron Bedakin with Ulta. Please go ahead.

Mark and team, thanks for taking the call and congrats on all the progress this quarter. I'm glad you brought up the benchmark ex-China pricing. It's really exciting and something that I've been looking at too. I'm just wondering if you could share how those prices and how those changes have impacted your off-date conversations.

Well, the benchmark prices came out a week ago or, you know, so it's... you know, recent, okay? But what's interesting, I did get a text message this morning from another forecaster and said they think they're low, okay? That they are actually higher. No, I haven't verified that. So, I mean, I think it kind of goes back to this whole story on these foreign prices, that people are realizing that you've got to pay more if you're going to compete with China, right? And I have to admit, it surprised me when you had, you know, 350% more with this first publication. So, I mean, it's certainly not going to hurt them. And, you know, we think that, you know, this whole concept you have to pay more is a reality. And I think that's gaining traction. I think the MP deal, you know, proves that the government thinks you have to pay more. And let's see where it goes. But, you know, the Australian government talking about floor prices, I think everybody's just realizing that there's got to be a different market. Otherwise, you're truly not independent.

Thank you.

Okay. I just want to thank you all for calling in, for watching the webcast. We very much appreciate your participation. I just want to remind and let everybody know that our management team will be attending several upcoming industry and investor conferences. I'm just going to run through a couple of them very quickly. It will be the Citi 2025 Natural Resources Conference, Enercom Denver Conference, U-2025 Global Uranium Symposium, the World Nuclear Symposium 50, Jefferies Industrials 2025, the H.C. Wainwright 27th Annual Global Investment Conference, the Pain Institute Critical Minerals Symposium, the E-Uranium Summit, and the Power Up BNP Paribas. So thank you again, and we'll try and get all of that information uploaded onto our website so everybody can follow along. And now Mark will just say a few closing words.

Yeah, again, thank you for those of you who joined. I think that really the closing words I have is we've been playing a long game. We're not playing short games, flash in the pan games. We've been focused on uranium for decades, or at least the assets have. But when we added the rare earths, I mean, we started a journey about five years ago. We held to that. There were criticisms from people that we shouldn't be getting into rare earths, critical minerals. And it's interesting because a lot of them are calling me up now and saying, wow, that was great. Yeah, we're happy you did that. So, We are focused on continuing the journey to build a world-significant, cost-competitive critical mineral company that has 10-plus critical minerals that can be produced commercially and at scale. And really, I don't know anybody who's done that, so it's been a unique strategy. We're starting to bear the fruits of that. And even with our uranium peers, year-to-date, we've been the best-producing uranium share company This year, year to date, and even when you look back a year or even start looking back over five years, we have outperformed our peers in many cases in the uranium space. We're performing well in terms of our peers in the rare earth space. So, you know, this is not an accident. It's a strategy that we've been committed to and will continue to be committed to. So thank you very much.

Thank you for participating in the Energy Fuels Conference Call. Please reach out to the company directly for any additional investment questions. This concludes today's call. You may now disconnect.