Outlook
Energy Fuels Provides Guidance for FY-2016, Update on Conversion from IFRS to US GAAP and Upcoming FY-2015 Results
Energy Fuels Inc. (NYSE MKT:UUUU; TSX:EFR) (“Energy Fuels” or the “Company”) , a leading producer of uranium in the United States, is pleased to provide the following guidance for FY-2016, as well as an update on the Company’s conversion from International Financial Reporting Standards (“IFRS”) to US Generally Accepted Accounting Principles (“US GAAP”) and certain of its upcoming FY-2015 results.
2016 Sales and Uranium Recovery Guidance
The Company is pleased to provide the following sales and uranium recovery guidance for FY-2016.
The Company expects to sell 550,000 pounds of uranium in FY-2016 under its existing long-term contracts.
The prices for material sold under the existing long-term contracts is either fixed or at floors.
6The average sales price under the Company’s long-term contracts is expected to be higher in FY-2016 than FY-2015 levels.
Selective spot sales are also expected to be made in FY-2016 as necessary to generate cash for operations, construction and resource evaluation activities, including continued shaft-sinking and resource evaluation at the Company’s high-grade Canyon Project and the construction of three additional well-fields at the Nichols Ranch Project.
The Company expects to recover approximately 950,000 pounds of uranium in 2016, including 350,000 pounds from its Nichols Ranch Project in Wyoming and 600,000 pounds from its White Mesa Mill in Utah.
This represents a significant expected increase in production over FY-2015 levels.Guidance raised
White Mesa Mill production is expected to be sourced from stockpiled material previously mined from the Pinenut Project (350,000 pounds) and alternate feed materials (250,000 pounds).
4In FY-2017, the Company expects to have existing inventory or expected production to meet all of its commitments to sell 620,000 pounds of uranium under its existing long-term contacts at average sales prices higher than FY-2015 levels.
Corporate events
The Company currently plans to file its Annual Report on Form 10-K for the year ended December 31, 2015 (“FY-2015”) on or before March 15, 2016.
Prior to January 1, 2016, the Company qualified as a “foreign private issuer” for US Securities and Exchange Commission (“SEC”) reporting purposes as such term is defined in Rule 405 of the Securities Act of 1933, as amended.
However, as a result of the Company’s June 2015 acquisition of Uranerz Energy Corporation (“Uranerz”), as of January 1, 2016, the Company ceased to meet the definition of ‘foreign private issuer’ and became a US domestic issuer.
This includes filing of Forms 10-K, 10-Q and 8-K, and preparing financial statements in accordance with US GAAP.
As a result, the Company’s FY-2015 financial statements, including financial statements for FY-2013 and FY-2014, which were previously prepared under IFRS, will be presented in accordance with US GAAP.
Outlook
Further, under IFRS certain impairments of Property, Plant and Equipment were recognized partially in FY-2013 and partially in FY-2014, whereas under US GAAP these impairments are expected to be recognized in FY-2014.
7This is likely to lead to a decrease in net loss calculated in FY-2013 and to an increase in net loss calculated in FY-2014 under US GAAP compared to the net loss previously recorded for FY-2013 and FY-2014 under IFRS.
3The Company expects to report a net loss under US GAAP of approximately $85-90 million for FY-2014 and approximately $35-40 million for FY-2013.
8The different impairment treatment under US GAAP compared to IFRS are expected to result in a reduced net loss in FY-2013 and an increased net loss in FY-2014 compared with the treatments under IFRS.
Update on Certain of the Company’s Upcoming FY-2015 results
Results
The Company is pleased to provide the following selected information regarding FY-2015 results.
During FY-2015, the Company produced a total of 468,000 pounds of uranium, which is above previously reported guidance, including a total of 296,000 pounds of uranium produced at the Company’s White Mesa Mill, of which 72,000 pounds were toll processed for a third party, and 172,000 pounds of uranium produced at the Company’s Nichols Ranch Project after the acquisition of Uranerz on June 18, 2015.
In addition, the Company sold a total of 1,075,000 pounds of uranium during FY-2015, of which 1,025,000 pounds were sold pursuant to existing long-term contracts at an average price of $57.39 per pound, and 50,000 lbs. were sold on the spot market for $37.35 per pound.
Outlook
5The Company also expects to increase its gross profit margin for FY-2015 compared to FY-2014 levels, and to report a working capital position of approximately $30-40 million as of December 31, 2015.
1For FY-2015, under US GAAP, the Company expects to report a non-cash impairment charge of approximately $55-60 million related to the impairment of certain of its earlier acquired mineral properties and all or most of the goodwill associated with the acquisition of Uranerz, due to continued uranium price weakness, general uranium sector weakness, and a decrease in the Company’s market capitalization.
2These impairments, combined with costs associated with the acquisition of Uranerz, an increase in standby costs associated with the White Mesa Mill not processing minerals for a significant portion of the year, and increased development costs associated with the Nichols Ranch and Canyon Projects, are expected to lead to a net loss for FY-2015 of approximately $75-$85 million.
25 boilerplate lines (safe-harbor disclaimer, contacts, call details) are set aside.