Good afternoon. My name is [Ludi] (ph), and I will be your conference operator today. At this time, I would like to welcome everyone to the Energy Fuels' Second Quarter 2024 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session, where you'll be able to ask one question and one follow-up, should you desire. [Operator Instructions] Thank you. Mr. Chalmers, you may begin your conference.

Thank you for the introduction, Ludi, and also, good morning, good afternoon wherever you join this call from. And thank you for joining the Q2 conference call of Energy Fuels today and webcast. We are always excited to discuss our results and significant accomplishments. And we continue to make major accomplishments every day. For those who cannot join the call today, we'll have replays of this presentation. It'll be available for two weeks on our Web site starting later today or tomorrow. Every quarter I say we're making extraordinary progress on many fronts. And certainly, this quarter is no exception. Energy Fuels is likely one of the biggest building success stories on decarbonization electrifications, while we also emerge as a clear leader in diversified U.S. critical mineral production at a time when this has never been more important. We are a unique investment. There is no other company that has the ability to advanced uranium, vanadium, and rare earth production capabilities, while at the same time advancing our medical isotope aspirations, and continuing to maintain a very strong balance sheet of plus-$200 million with zero debt. Currently, and particularly over the past few days, the world has been experiencing substantial equity volatility, and even more so in the uranium space. This volatility, while surprising to me at the moment, is not unique to other times in my career that I or companies I have worked for have had to navigate. It is also one of the reasons Energy Fuels is not 100% focused on a single element, which directly influences our company's strategy to maintain our strength in the uranium market. And while at the same time diversifying into these other complementary critical mineral markets. Energy Fuels is playing a long game here. This is a lesson I've learned over…

We will find those and get those included, and I believe they are up on our website at the moment.

Okay. Well, I'm just pointing out. So, anyways, those listening, I do not see the financials in our presentation at this moment, and so we will follow-up with those at the end of the presentation. Next slide. Well, let's say stay on this slide. So, anyways, uranium sales, we've signed a number of long-term contracts and we've done spot sales. Last spot sale we did was at $86 per pound in July of just recently. And I also want to say that we have four long-term contracts with U. S. Utilities. We just recently signed a new contract at very favorable pricing and we're very proud of that contract that gives us additional strength. So, we continue to look at how we position ourselves with the market and how through a combination of our contracts and spot sales, how we deliver the best outcome for our shareholders and maintaining our substantial cash position. Next slide. Growth drivers. Next slide. On the rare earth front, we're focused on the processing of monazite, recovering as a byproduct of heavy mineral sand, as I mentioned, focusing on NdPr, Dy, and Tb and they also contain uranium and thorium which can be monetized by the company at least the uranium can. It's the facility in the United States able to process monazite into advanced rare earth materials. And we have 40 years of experience basically using solvent extraction to do this. We have our Phase 1 separation plant up and running and commissioned. We're very excited about that. That is already producing on spec separated NdPr in 2024, and we are currently advancing a strategy to engineer and eventually construct a facility, what we call Phase 2 and Phase 3, which was upwards of 6,000 tonnes of NdPr per year and also substantial quantities…

Yes.

I mean, is that the new presentation, the right one?

Yes, I don't believe so. So, let me get you the -- I can certainly do it on a PDF, but I think I'd have to send it to them.

Go back to previous one.

Okay.

Well, look, we'll go back to the previous presentation and I will give the financials verbally off of what I have in front of me. And again, I apologize, I have no idea how that got mixed up. So, go back to where we were at on the economics. Okay. Now, next slide. Okay. And we've talked about this before, why monazite is because we have these structural advantages to recover the uranium from the monazite, which has about the same grade of uranium as our traditional ores, and we have the ability to deal with the tailings, we have the deal to recover the uranium, and we have the ability to remove the uranium and other radionuclides to come up with a pure carbonate, which can then be separated into NDPR as we currently are doing. So, this is a major advantage. Outside of China, as far as I know, we are the only company outside of China that is actually looking to monetize the uranium as we process. So, that's a distinct advantage. If you look at the [leucas] (ph) that are also looking at processing monazite, they are not recovering the uranium and have no intention of doing anything with the thorium. And we have complete intention to recover the uranium and potentially could recover the thorium in due course if the need arose. Next slide. Let's talk about some other growth opportunities. So, we've talked about vanadium in the past. It's another critical mineral. We're currently not recovering vanadium. We have a long history of doing so. It is mainly used for steel hardening and also for grid flow batteries for energy storage. We produced back in 2019, and we have the ability to go back online, as I said. But we're currently not doing so,…

Thank you. And ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] And your first question comes from the line of Heiko Ihle with H.C. Wainwright. Please go ahead.

Hey there. Can you hear me alright?

Yes, Heiko, I hear you.

Perfect. Thanks for taking my questions, Mark. And welcome to Kim. It was nice to catch up with you last week when we first spoke. You guys are obviously ramping up in a pretty meaningful way. Your two-pronged production profile that you state in that presentation, you're a pretty major market player. And in the meantime, my [fabled] (ph) opinion on U.S. sourced product is not a secret to any of you. Anyways, building on all that, can you give some color on how much pricing power you're seeing from your customer base given the large scale output that you bring into a market that's plagued by geopolitical turmoil. And obviously, the news this weekend potentially may exacerbate that even more, and especially now that you have such a large scale output, what are you seeing at the negotiating table?

Well, I mean I think it's kind of evolved, Heiko, in stages. Like, for example, at the beginning of the Ukraine conflict there was a sort of a rush of particularly U.S. utilities looking to establish long-term contracts with companies like ourselves. And we signed some contracts at that point in time. And then, it softened up a bit. It's still going on. But I think, over time, as you've seen the long-term [true] (ph) market increasing, beginning up to about -- I think it's around $80 a pound right now. And in this most recent contract that we signed in the quarter, was really an excellent contract for us. And I think it reflects what you're talking about, that it is very good terms for our company and where we're positioned. Because, for example, we have the ability in this new contract, it's not like an eight-year contract, it's shorter than that. And we can deliver into that contract because we have mines that are producing right now that we can ramp up without substantial capital investment. So, I think there is an increasing, growing commitment by the utilities to sign deals that are attractive for U.S. producers. But I'd still say that the world, and I say this before, is addicted to cheap, and everybody wants cheap. But I am seeing some signs around the perimeter that shows that there are people willing to pay a bit more to just make sure that they have secured supplies from, like ours, with a long history producing uranium. So, does that answer your question, Heiko? I think it's improving.

Yes. No, what I was going to say, yes, it does. And I'm surprised it's only a bit. But, okay, fair enough.

Yes, I mean as you're aware, these contracts, we can't go into the terms, but I can tell you they are, I believe, quite favorable for the circumstances. But they also -- all these contracts have their own specifics that each utility has their own requirements, and we try to build around that. So, I've been saying that I think that it's improved over the last year or so, year-and-a-half. And I think it's good reason for that improvement.

Okay. Completely different question, and I'm pretty sure the answer is no, but just to double-check. For uranium, is there a maximum inventory level that you are allowed to keep at site?

At the mill, no, I mean you've got make sure that the material is adequately stored, stockpiled, eliminate the dust. But I think going back a number of years, we've had substantial quantities. I mean I'm going to say a million tonnes or something in that order. I'm not expecting to get up to that level in today's case. But as I said, right now, finished goods and unprocessed material, we have north of 900,000 pounds. And since the end of the quarter, that continues to increase, so it's building. But we have that around one million pounds that either be sold or processed. And we're adding to that everyday, as I said earlier.

Perfect, very helpful. I'll get back in queue.

Thank you, Heiko.

And your next question comes from the line of Joseph Reagor with ROTH Capital Partners. Please go ahead.

Hey, Mark, thanks for taking the questions. I guess first thing is, I saw a report on Friday that you guys agreed to temporarily stop shipping ore, I guess, from Pinyon through a Native American reservation. Could you give us any color on how that might impact guidance for the year, if at all? Or is just simply, instead of shipping it that way you go around it, and is that going to result in any cost increase if that's the option?

Yes. No, thanks, Joe. And yes, there's been a fair amount of media on this Navajo Nation concerns over shipments. And to start with, I just want to say that, over decades, with our company or predecessor companies, there's been tens of thousands of uranium haul trucks that have hauled across a reservation with out a single incident, including up until about 2022 was the last shipment. And during that period of time we actually had members from the Navajo Nation go to one of those mines to witness the loading and the unloading at the mill so that they were comfortable with those shipments. Now, these communications that are being made out or put out by the Navajo Nation president, it's unfortunate. But I have to say that one of the reasons they have these concerns is they have this long legacy of uranium issues that have nothing to do with Energy Fuels, nothing to do with us. Most of them were created by legacy arrangements with the U.S. government during the Cold War. But because they have those concerns, Joe, we are working with the Navajo Nation to address them. And if you look at these executive orders and stuff, they talk about the biggest issues for them is they want safe transport of materials across the Navajo Nation, and we absolutely respect that. We absolutely respect that it has to be done safely. We have done it over time. And we plan to sit down with them to make sure that it is safely transported. And I want to say too, we've already gone up and beyond on every level of transporting across the reservation as in the past. I mean we've done more this -- for the Pinyon Plain Mine than we've ever done previously. But…

Okay. And then, just on the point of, is there an alternative route that you guys could use if necessary?

Well, there are and those will all be part of the discussions, Joe. But the route that we have across the reservation is a route that has been studied extensively and it is really the best route and we plan to continue down that path, but let us continue with our discussion with the Navajo Nation because again, we are respectful and there are concerns and let's figure out how to alleviate those concerns.

Okay. And then, the other question I had was, during your prepared remarks, you mentioned a uranium sale in July. Is that in addition to the one in June or were you referring to the one in June?

There may have been -- may have been a typo. There's one sale. There was one sale in this quarter and it was the one for $85.90. And we made 200,000 pounds of sales in Q1 and that was under contract and that was around 75-something a pound and we made a spot sale of 100,000 in Q1 which was around $103 a pound. So, I mean I think it reflects, Joe, the sale that we made in Q2 that we made 200,000 pounds of contract sales and we made 200,000 pounds total over the two quarters and spot sales and the result is if you come up with a fairly reasonable blended cost of both spot and contracts.

Okay, but no sale yet this quarter as of yet?

Well, no, we haven't made any uranium sales in Q3.

Okay, thanks. I'll turn it over.

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

Hi, Mark and Jim. Thanks for the update and Curtis, if you're on there somewhere. Just maybe following up on some of the commentary on where you are with mine development, so it sounds like you're pre-developing Pinyon Plain. For the other assets, can you maybe give us a similar update on where they are development-wise and then for all of them, when do you expect to start stoping?

We expect to start stoping.

Yes.

Okay. Well, I mean, let me just take it step-by-step. Pinyon Plain, we've been doing a spiral incline that goes around the ore body and doing sub-levels and we have, I think three sub-levels that we've stubbed into the ore body and we mine some ore as we develop those sub-levels. And I believe that in the course of the next couple of months, two or three months, will largely have the development of that initial ore body developed from what we call the 1.5 level to the 1.4, so those are two levels in the shaft, and but we can mine right now, Justin, we can mine ore from those sublevels as we speak, but we're going to go ahead and complete that development work, so the entire sort of block is ready to be mined later this year in a bigger way and into next year. So, and then we're starting this drilling, what we call the Juniper Zone, where we have some areas that aren't covered from previous drilling. We're very excited about that because I think there's great opportunities to expand the resource. So, we can mine right now, and we plan to ramp up that mining rate in the coming weeks or so. And the Pinyon Plain mine, just say 750,000 to 800,000 pounds per year, looking out over the next number of years. Okay. So, that's kind of where Pinyon Plain fits in at La Sal and Pandora, we are currently mining uranium, vanadium ores right now and with the view to ramp that up to around 400,000 pounds per year of uranium, but not including any vanadium credits. So, those are happening as we speak. We've got the Whirlwind project, which is fully licensed to go into production and that's not too far…

Got you. Thanks, Mark. And just one on your stockpile levels, given that you will be ramping up mining but also running your processing campaign, do you expect your stockpiles ore levels to be pretty similar to the end of the year or, I guess, at a higher lower level depending on mining and, and your processing campaign?

Yes. Well, as I said, we're saying we're going to get up to that 1.1 million to 1.4 million of newly mined material by the end of the year. The mill can out process us on that. The mill can outstrip that. It's got 8 million pounds of production capacity. And so, our goal is to run these mines as aggressively as we can within reason, add to what we have out there, and clean up what we can. If we have to make a pause with the mill for three months or six months or whatever, we'll make that pause and we'll continue on with other work we can do in the rare earth space, potentially, and then we'll be ready for another restart of the mill. So, it's kind of a dynamic environment, Justin, and how we replenish what we process and what we mine.

Okay. Thanks a lot, Mark. I think that was my question and follow-up. So, thanks very much for your time and I'll free up the line.

And your next question comes from the line of Matthew Key with B. Riley Securities. Please go ahead.

Hi, good morning, everyone, and thank you for taking my questions. Most of mine have been asked, but I guess I wanted to touch base a little bit on M&A. Obviously, you've been very active on the rare earth side, but how do you view M&A in the uranium space, say, could there be potentially opportunities down the line that could interest you? Thank you.

Yes, Matthew, I mean, we look at M&A based on whatever makes sense, okay? I mean, we're this company that is interested in multi-elements, and that includes uranium. So, we are, yes, we have been aggressive on the M&A, on the critical mineral front, the rare earths, the monazite, both in Australia and overseas in Africa, that would still work in progress. But we have not ignored opportunities for M&A in the uranium space. So, I just want people to understand that we are not looking at current possibilities that may make sense for us. And even, I can say that even in places like the La Sal Complex, we've actually acquired certain claims and whatnot in the vicinity of our mines to kind of fill in a few of the gaps. So, it's been dynamic on the uranium front. Sure, there's been more activity on the rare earth front in the last few months, but we don't necessarily say that that's always going to be the same. That we will look for the opportunities that make sense for our company on whatever front M&A takes us to be a long-term, stable, profitable, critical mineral, including uranium, production company.

Got it. Thank you. Thank you for that. And you mentioned that you're updating the rare earth EFS right now to include the increased capacity of monocyte and NdPr. When should we expect those kind of updated numbers to be published? And could you maybe provide initial ballpark for the CapEx there, assuming the higher scale? Thank you.

Yes. Well, I think the initial study at the 3,000 tonnes was about 350 million. I mean, we've got a lot of the design criteria completed or largely completed for what we call Phase 2 at least for the NdPr. We are looking for engineering companies to help us there. So, we've got a really flying start there. So, and exact timing of when all that will be done. I think it can go fairly quickly, but I don't really have an exact time on that. But it's a very high priority for the company and for me personally, to advance that as quickly and as efficiently as possible. And I do want to say this though, is that when you get an engineering study like we had, that we published the 3,000 tonnes of NDPR that was relatively recently completed, on a 350 million. I'm very proud of what the guys did in the Phase 1 for $16 million. So, engineers are engineers, and we use these studies to guide us to get financing and whatnot, but we have some pretty resourceful people and operate in a very good jurisdiction with a very committed workforce. So, I'm hopeful we're going to get some excellent results on all these studies because of the track record we already have. But right now, I'd just say that we've got most of our design criteria nailed down, getting an engineering company on board and having them help us package this to be able to get back to the market. So, I'm going to speculate six months or something like that, but it could be more or less, but I'm just going to throw that out.

Got it. I appreciate the color. That's it for me. I'll turn it back. Thank you.

And your next question comes from the line of [Zhuang Chang with BIP] (ph). Please go ahead.

Hello, Mark. Thank you for taking questions. Good job with the results. My focus on growth projects and capital allocation framework, can you speak about the Madagascar state for Toliara? And the follow-up question would be, how do you plan to fund your capital expenditure on the growth project? Thanks.

Okay. Well, thank you. Well, so let me start with all our projects. All our projects will move through final investment decisions that will be reviewed based on their merits with the most recent information, whether it's in the United States, it's in Australia or it's Madagascar or anywhere else, okay, Bahia. So, we'll go through with the best information available to decide which projects should go forward on their merits. When it comes to financing those, I mean, we do have a very strong balance sheet, and which puts us off to a very good start. We have some companies coming to us that are interested in potential off-takes of some of these projects that could help finance them. We believe that due to the criticality of the critical elements that are produced from these sites, that they are perfect targets for non-recourse financing, whether that's support from U.S. government, Australian government, or other governments that are interested in a diversified supply chain that's not dependent on China. So, a lot of it will be based on a case-by-case basis as we go forward. But I think the starting point is having our strong balance sheet, which gives us the flexibility, making sure we get to a final investment decision that makes sense, talking to various people that are interested in working with us on offtake, and looking at non-recourse financing to get these projects in place. But our plans are, are extraordinary when it comes to what kind of capacity that we are building up with these initiatives we have in place and I am not really concerned about getting those financed if those projects are in place and the final investment decisions warrant development and we have all the permits and licenses to do so. I'm not overly concerned about that. But we will look at a relatively strong component of debt, balanced with a decent equity contribution and offtakes to get those financed. But they'll all be done on a case-by-case basis.

Thanks, Mark. Just a little tiny follow-up, I'm not sure if you picked it up, but I mentioned about the status of the Madagascar negotiation. And the last one would be, like you mentioned about government funding and all that, and offtakes for strategic reasons, any conversations going on? Thank you.

Yes, look, the update on Madagascar is there are still continued negotiations to come up with the MOU with the government on this stability agreement and final approvals with the parliament Madagascar to go forward. We still believe that the stage is set on those fronts, but nothing is certain until all these steps are completed. But the Madagascar government has passed a new mining code, and the stability agreements are routinely being applied with other companies in the country. They're getting a lot of pressure from the World Bank and others to start economic development in the country. And we think that the alignment of base combined with Energy Fuels puts us in a much stronger position in due course to get successful outcomes to all of those things. So, that's kind of where it is with Madagascar, but it does have and has had a checkered history, if you know, but we think that the stars are aligning there and we're looking very optimistically to the future. When it comes to we have been having discussions with various other government entities on possibilities for finance. We have had discussions with other companies that are interested in potential offtakes. I'm not going to go into detail there, but we're getting a lot of attention from other parties that are watching our moves with keen interest. And we plan to continue those discussions while we advance these things. I mean, again, if you look at any of our projects, by the time you initiate a final investment decision. To start the final investment decision, it takes six months to a year before that process is completed. So, you do have some time as these pieces come together. And as I said, the first project in the wings here is the Astron project that's initiated. We've initiated the final investment decision work as we speak.

Thank you. And that is all the questions that we have at this time. I would like to turn it back to Mr. Chalmers for closing comments.

Yes, thank you for that. Yes, firstly I apologize for the sort of the scramble on the presentation. I mean, the contents are effectively the same. As I mentioned, our financial highlights, we had -- even though we had a net loss that was offset by uranium sales. And as I mentioned, the ability to kind of selectively create and add revenue from our existing contracts and spot sales will continue. We are strong balance sheet, as I mentioned, no debt. We also have building revenue from the uranium business with mines that are in production. And so, we're in a really, really great position from that front. I've never been more excited with the activities that we have as a company. The volatility of the market, I understand that's difficult for investors. It's difficult for the company. We don't like to see the volatility, but it's not our first rodeo. I've been through this a lot of times, and I'm confident that with all the attributes that we have as a company, and our strength and our experience and the moves that we're making will result in a, I believe an unusual story and success story when it comes to critical minerals. So, thank you for your time, your effort, your investments in many cases in the company, and all I can say is, we'll look forward to giving further updates in due course.

Thank you for participating in the Energy Fuels conference call. Please reach out to the company directly for any additional investment questions. You may now disconnect.