Uranium miner, Energy Fuels Inc, achieved production guidance of 950,000 pounds of uranium for 2016 as it posted increased revenues in its first quarter and says it aims to lower costs.
Revenue for the three months to end March, 2015 was $18.0M compared to $7.6M in the same period of 2016. The net loss increased to $8.8M versus a loss of $1.2M a year ago. This was due to the $7.4 million in investments the firm is making for future production that it must expense, including shaft-sinking at its high-grade Canyon mine, construction of wellfields and an elution circuit at Nichols Ranch, and construction of leach tanks at its White Mesa Mill. In the quarter, 350,000 pounds of uranium were sold at $51.36 per pound, contracted price.
As such, we have made the decision to save cash in 2016 by planning to delay previously announced capital expenditures, including well-field expansion at Nichols Ranch, Wyoming until higher market prices return. While this decision is expected to lower production at Nichols Ranch by 50,000 pounds this year, White Mesa Mill uranium recoveries are now expected to be higher than originally forecast. Therefore, they hope to maintain their previous guidance of 950,000 total pounds of uranium recovery in 2016.
They expect to lower their portfolio-wide cost of production with the pending acquisition of Mestena Uranium, and its ISR production in South Texas.
While long-term uranium market pricing is currently lower than the pricing contained in their four existing contracts, upon only a modest uplift in current long-term prices, Mestena will provide Energy Fuels with the potential to sign uranium sales contracts which meet targeted operating margins for the Company.
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