Dec 22, 2023
Energy Fuels UUUU
Uranium production timeline accelerates with uranium price spike.
Energy Fuels announces that is has commenced production at three mines. During the third-quarter earnings' discussion six weeks ago, management indicated that it was hiring personnel and upgrading facilities at four mines with plans to restart production at one or two of
the mines in 2024. Today's announcement would appear to be an acceleration of previous plans. Management also indicated previously that it plans to produce 1,000,000 lbs of uranium in 2024 and stockpile the uranium until a mil campaign is completed in late 2024 or early 2025 tI is unclear whether these plans have changed in light of today's announcement.
Target Price $10.00
Market Capitalization 1.22B
Shares Outstanding 161.25M
Float 158.41M
institutional Holdings 53.25%
12-Month Low/High $4.85/$ 9.03
Average 90-Day Volume 2510000
Fiscal Year End 12/31/2023
Uranium prices are surging. Uranium prices were below $40/Ib. most of the last ten years causing domestic producers to idle production. Prices started to rise ing 2022 reaching a price in the mid seventies just six weeks ago. Since then, uranium prices have soared to a level near $90/ib. It has been our investment premise that cheap uranium from Kazakhstan sold on spot would eventually dry up, and that when that happened, uranium prices would rise quickly. With utilities (and the government) now rushing to shore up supply, the log jam appears to have been broken.
Energy Fuels is not alone in starting up production, but it is the largest. Energy Fuels and its White Mesa Mil in Utah is in the best position to produce large quantities of uranium quickly. Management believes ti can produce 2 million ibs. of uranium and is licensed to produce 8 milion Ibs. annually. Other facilities boost Energy Fuels total licensed capacity to 10 million. Other producers such as enCore (licensed to produce 3.6 million Ibs.) andPeninsula Energy: (3.0 million Ibs.) have also announced plans to restart operations, but wil most likely be smaller and later than Energy Fuels.
We are reiterating our Outperform rating and our $10 price target. Energy Fuels is not just a uranium story. However, a return ot uranium production and sales at prices above production costs wil be the primary driver for near-term stock price appreciation. We believe the recent strength in uranium prices has legs and that a return to production will be well rewarded.
*This report is from Noble Research. Thought I’d share. And I did not take a position in UUUU to sell at $10.