Energy Fuels (TSE:EFR) reported a $52.2 million third-quarter loss as unrealized losses on marketable securities weighed on results, while its uranium business remained profitable and the company advanced plans for a rare earth supply chain.
The company recorded $29.2 million in total revenue and had approximately $932 million in working capital at Sept. 30, Chief Financial Officer Nate Bennett said on the earnings call. The net loss amounted to $0.20 per share and was driven primarily by $35.3 million in noncash unrealized mark-to-market losses on securities.
Energy Fuels closed its acquisition of Australian Strategic Materials, or ASM, on Aug. 28 and continues to pursue its proposed purchase of magnet maker Vacuumschmelze, or VAC. CEO Ross Bhappu said the VAC deal is expected to close in early 2027, subject to regulatory processes.
Uranium Sales Support Results
The uranium segment generated $28.7 million in revenue and $17.9 million in gross profit, a margin of approximately 63%, Bennett said. Energy Fuels sold 320,000 pounds of uranium at an average realized price of $88.90 per pound. Its weighted average cost applicable to uranium revenue was approximately $34 per pound.
Bennett said the realized uranium price increased 10% from the second quarter and 27% from the first quarter. The segment posted positive operating income for the third consecutive quarter.
Energy Fuels mined 385,000 pounds of contained uranium during the quarter but did not process uranium at its White Mesa Mill, which was idled for planned maintenance and to rebuild stockpiles. The company ended the quarter with approximately 2.4 million pounds in combined ore, mineralized material, in-process and finished uranium inventory.
Bhappu said grades at the Pinyon Plain mine were below expectations, prompting the company to add an overnight crew. Bennett said the mine’s average grade nevertheless improved to 1.04% from 0.71% in the second quarter and that management expects further improvement as mining advances.
Bennett said Energy Fuels had reached the low end of its full-year processed uranium guidance and remained on track for the low end of its sales guidance. Management was hopeful the additional shift and higher grades would help the company reach the low end of its mining guidance.
Bhappu said the company had essentially completed its long-term contract sales for the year and was targeting total 2026 sales of 1.5 million pounds. He also said Energy Fuels anticipated restarting the mill for uranium processing around Dec. 1 and operating it through approximately the first quarter of 2027, before potentially shifting to rare earth processing.
Rare Earth Expansion and Acquisitions
ASM brings an operating metals and alloys plant in South Korea into Energy Fuels’ portfolio. The plant has existing neodymium-iron-boron alloy capacity of about 1,300 tons per year, with an expansion to 3,600 tons expected to be commissioned in early 2027, Bhappu said.
Bennett said ASM’s financial contribution would likely remain limited in the near term as the company completes the expansion. Bhappu said the plant could generate positive cash flow and EBITDA, but he did not expect it to become a major contributor until White Mesa supplies become available.
At White Mesa, Energy Fuels approved construction of its phase I-B and I-C heavy rare earth expansion. Bhappu said the project, targeted for early 2028, includes a mixed rare earth carbonate circuit intended to allow simultaneous processing of uranium and rare earths.
The proposed VAC acquisition would add finished rare earth magnets to the company’s operations. Bhappu addressed a dispute involving a customer of VAC’s Sumter, South Carolina, facility, saying Energy Fuels knew about it before signing the acquisition agreement and reflected it in the deal’s structure and economics.
“Our internal valuations and projections excluded current and future revenue and EBITDA from this customer and the related offtake,” Bhappu said. He added that the purchase price could be adjusted depending on the arbitration outcome and that the company was discussing available Sumter capacity with other potential customers.
Donald Financing and Capital Plans
Energy Fuels received conditional commitments for 180 million Australian dollars of a proposed AUD 200 million senior debt facility for its Donald joint venture project. Bhappu said the remaining AUD 20 million commitment is expected from commercial banks, and the company hopes to make a final investment decision by year-end.
Donald’s construction is expected to take approximately 22 months, with first production anticipated in late 2028 if construction begins late this year or early next year, Bhappu said. The project is intended to supply feedstock to White Mesa.
Looking at 2027 spending, Bhappu said approximately $100 million for White Mesa’s phase I-B and I-C expansion would largely be spent next year. Donald would also require significant capital following an investment decision, with some funding expected from debt facilities. Bennett said Energy Fuels has $60 million remaining to earn its 49% interest in the project.
Energy Fuels also disclosed an updated $500 million prospectus supplement for its existing at-the-market equity program. Bhappu said the program gives the company flexibility to issue shares selectively and that management intends to remain disciplined in its use.
About Energy Fuels (TSE:EFR)
Energy Fuels is a leading U.S. -based critical materials company, focused on uranium, rare earth elements (REEs), heavy mineral sands, vanadium and medical isotopes. Energy Fuels, which owns and operates several conventional and in-situ recovery uranium projects in the western United States, has been the leading U.S. producer of natural uranium concentrate for the past several years, which is sold to nuclear utilities for the production of carbon-free nuclear energy. Energy Fuels also owns the White Mesa Mill in Utah, which is the only fully licensed and operating conventional uranium processing facility in the United States.
