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" H.C. Wainwright & Co, LLC, Research Division

" ROTH Capital Partners, LLC, Research Division

" B. Riley Securities, Inc., Research Division

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Thank you for standing by. My name is Eric, and I will be your conference operator today. At this time, I would like to welcome everyone to the Energy Fuels Q3 2025 Conference Call. [Operator Instructions] I would now like to turn the call over to Mark Chalmers, CEO and Director. Please go ahead.

Thank you, Eric. And again, Mark Chalmers, CEO of Energy Fuels. I want to thank everybody for joining our Q3 conference call today. And I can say with absolute confidence, the entire team continued to deliver on our promises this quarter, which is rather unusual in today's world when it comes to getting projects restarted in advance. Namely, we had increased sales, increased revenues. We continued our buildup of low-cost and increased our uranium production. So we're lowering our costs as we increase our uranium production. And we're setting the stage for increased gross margins in 2026, and the timing could not be better. We're making remarkable progress on our rare earth segment, including heavy rare earth piloting and plans for commercial production. We've received a qualification for our NdPr production, which is going into major automobiles manufacturers as we speak. We received all government approvals for the development of our Donald joint venture project in Australia, which has significant heavies as well as NdPr. We received a conditional letter of support from Export Finance Australia, more commonly known as EFA, for up to AUD 80 million, and that's with respect to our senior debt project financing for the project. We also completed an upsized offering of a $700 million convertible note on very favorable terms. And post-quarter, we had a working capital balance approaching USD 1 billion. As many of you understand, these accomplishments are not the norm for many in our sector because it is tough. It is tough to produce uranium. It is tough to produce heavy mineral sands, and it's tough to produce rare earths. And we are a company that is playing the long game. We've been doing that for a long period of time. We deliver on our promises. We have the right team…

Thank you, Mark. Well, as Mark mentioned, the company is in very strong financial position right now. On the back of about a $700 million fundraising we just recently did, we intend to use those funds to expand our Phase 2 project at the White Mesa Mill. We also intend to use some of those funds for the Donald project development. Again, it was a fantastic outcome. And really, the funds were very, very inexpensive. It's an inexpensive source of capital. We used an unsecured convertible debt structure that gave us maximum flexibility. The interest rate on that note was 0.75% coupon rate, which is incredibly low. It gave us a 32.5% conversion premium. So the reference pricing was $15.30. The premium with the premium it gave us a $20. 34% conversion rate. The all-in effective tax rate on that note is about 2.1%, again, a very, very inexpensive financing. The nuance of the note was that we put in a capped call feature. The capped call effectively gave us insurance against future dilution and gave us an effective conversion price of $30.70. So it was a very successful offering. Again, we raised $700 million, and it was oversubscribed by more than 7x. The use of the funds is shown there on that slide, the Phase 2 expansion. And if we go to the next slide, it gives you a sense of just how big White Mesa will be. Effectively, we're planning to double the size of the facility to give us individual lines for both processing uranium and rare earths simultaneously. So it's an incredibly impressive project that we're undertaking, and we've got a great financial position to undertake these future plans. And with that, I'll hand it to Nate to talk a little bit more about the financial structure.

Okay. Thank you, Ross. During the third quarter, we continued to strengthen our financial position as we're preparing to develop our long-term projects in the next couple of years, and we finished the quarter with $750 million in total assets. We also increased uranium revenues leading to an improved net loss of $16.7 million compared to the second quarter's net loss of $21.8 million, and we continued low-cost uranium mining at our Pinyon Plain mine. We expect this to continue to improve as we mine and produce low-cost uranium inventory and increase future uranium sales in the fourth quarter. At the end of the third quarter, our working capital was approximately $300 million, which includes $235 million of combined cash and marketable securities with the majority of these marketable securities being interest-bearing securities, treasury bills and bonds. This does not include the $625 million net proceeds from the senior convertible note completed in the fourth quarter, and this will be reflected in our fourth quarter balance sheet. And by the end of the year, we expect working capital to be somewhere between $900 million to $1 billion in working capital. During the third quarter, we sold 240,000 pounds of uranium at a realized price of $72.38 per pound and a gross margin of 26%. We expect similar margins for our fourth quarter sales as we sell and average down our 485,000 pounds of finished uranium inventory that we had at September 30 and as we start to add our approximate 670 pounds of low-cost finished uranium inventory during the fourth quarter as we process those pounds at the mill. As we continue to mine and process ore into 2026, we expect our finished uranium inventory cost per pound to decrease from approximately $50 to $55 per pound to approximately $30 to $40 per pound with our gross margins expected to increase to approximately 50% or above and above. And with that, I'll turn it back over to Mark.

Thank you, Nate and Ross. Look, these last few slides are a bit repetitive, so I'll try not to repeat too much. But look, we plan to retain our status as the largest uranium miner and processor of uranium ores in the United States. There was a time where people questioned if we were leaving the uranium business. Well, we're not. We're still going to be #1 in the U.S. We're processing ores. As discussed, the White Mesa Mill is running with Pinyon Plain alternate feed materials and some LaSalle material. We're increasing or have the ability because we have not overcontracted. We're looking at opportunistic spot sales and other opportunities to add to our contract sales volumes, and we'll have a material amount of additional uranium to do that, whether that be later in '25 or in '26. The cost of goods sold is decreasing, as Nate has mentioned, with the addition of the Pinyon ore. We're increasing our ability to produce uranium of 2 million pounds plus per year. And we could probably do that with Pinyon Plain alone without alternate feed, without LaSalle complex and other projects. So we're very comfortable in saying that. The margins are expected to improve material with lower cost and increasing improved uranium prices. We've talked about the 3 conventional mines that are currently in production. We're getting a number of other mines ready for production. Some of those are already permitted. Some are not, but we're advancing the ones that are not fully permitted to get our ability to produce 4 million to 6 million pounds per year, particularly once Phase 2 is completed and the mill is able to be dedicated 100% to uranium production. And we're still continuing advancing the R&D work on the uranium recovery. Next slide. And…

[Operator Instructions] Your first question comes from the line of Heiko Ihle with H.C. Wainwright.

Conceptually, for the Donald project, I mean, you got the final government approvals. You got the $80 million from EFA. You actually discussed that earlier on this call. We might see the FID as soon as next month. But I mean, just again, conceptually past that, you got the balance sheet and liquidity to put whatever number is needed really into this. Why are we not doing that? And I know the time line is quite accelerated, but I feel like we might be able to shave 1 or 2 quarters off of that now.

Yes, Heiko, it's ready to go. I mean what we're looking at is, as you know, there's this huge interest in getting these materials like from the Donald project in the United States, particularly the heavies. And we're just looking at our options potentially with offtakers for that project. And we're working through what that can look like. We've been talking to and basically out seeing what the opportunities could present. And I think there's also this opportunity when you look at that project and you look at these higher prices that are being placed on non-China material, there can be premiums there. So we're really looking at what those are and to help us make the best informed decision there. And that's really what we're doing is we're shopping around to see what interest in those products that are out there, whether it be private or even government agencies that might be interested in those products.

And it wouldn't make sense to essentially skip that into the secondary step and just move forward now while you're looking for that?

Yes. I mean, Heiko, we're going to -- we're looking at all these opportunities in a holistic way. Yes, we have the capacity to do that right now. And so we're just looking at all our opportunities on how we best go forward. I don't know, Ross, if you want to add anything on that front?

Well, look, I agree. I think we're waiting to try to secure some offtake agreements. We also have a number of different options on financing, and we're just trying to run those to ground, Heiko, and do the best thing that's -- do what's best for shareholders on utilizing the money that we have in the bank right now.

And then just one quick clarification on your preliminary guidance for next year. It says there you expect to sell between 620,000 and 880,000 pounds with the long-term uranium sales contracts. Where is that delta between the 620,000 and the 80,000 come from? Is that a timing? Is that a pricing issue? What exactly could make it go from one end to the other end of that range, please?

It's really the flex up or flex down, is what that is, Heiko.

So it's purely your choice.

No, no, that's a selection of the contracts. So I know some companies have said they're not going to do flex up or flex down. We have. It doesn't really bother us too much because we're -- a lot of these things are evolving as things progress. So that flex up, flex down. We're still looking for homes, whether it be spot, midterm, other contracts for the future. So if you look at -- if we're up at 2 million pounds of uranium production, thereabouts, 1.5 million, 2 million, and we've currently got that kind of contract portfolio, you can see we have a lot of headroom there for doing other arrangements as we see fit.

Your next question comes from the line of Joseph Reagor with ROTH Capital Partners.

So I guess first thing on the rare earth separation plant at White Mesa, I know you guys have floated a cost of $300 million to $500 million, but there hasn't been a lot of like ranges put on IRR or NPV for this project. When do you think we'll get those numbers? And then as we're leading up to that, is there a range you're comfortable putting on that so we can start to try to build these into our models?

Well, Joe, first of all, thanks for asking the question. We're really on the cusp of getting a number of these feasibility studies completed. One is for the Phase 2 separation plant. We're also completing the feasibility on the Toliara project and also getting the final investment numbers for Donald. And with that publicly disclosed, you're going to have all the information you need to figure out what all those costs are going forward. When it comes to the Phase 2 processing plant upgrade, we are adding -- we've added -- since those earlier estimates, we've been adding a lot of additional infrastructure including the ability to recover heavies. And so some of those costs are going up, but the actual facility is actually becoming more capable to do more things. So we expect to have, again, all these studies completed by the end of the year and then the dots can be connected with certainty because they will be done by third parties or signed off by third parties, fresh and updated to give you the most recent information to make your calculations on.

Maybe a follow-up to that then. Would it be fair for us initially to assume that the economics are roughly similar to what we see for this kind of thing historically, where CapEx and NPV are roughly equal and IRRs are in the high teens, low 20s?

Look, I don't want to really overspeculate until those studies are completed. But we believe that what our plan, our strategy with the multiple assets we have is going to deliver a very low cost compared to our peers option for producing these multiple rare earth oxides and some of these other critical elements. So we're very confident that our focus on monazite is going to be a very attractive and low-cost opportunity for our shareholders going forward.

One other thing on the uranium production side, you guys kind of gave guidance for Q1 only. And is this to say that mining at Pinyon Plain is going to wrap up and then the mines to go back on care and maintenance or just that you're not comfortable giving a guide yet for next year?

The main reason that we've only given guidance into part of 2026 is that we have a rare earth plant as part of the White Mesa Mill in that Phase 1, where we share the mill. And we're also doing trade-offs on how much rare earths we have to process versus uranium versus our ability to stockpile. For example, when we process the Pinyon Plain or, we're going to keep mining Pinyon Plain, we'll put it out in the yard, and it will be stockpiled for future processing. And that may be extending that run in 2026, but we're also giving ourselves the option to be able to recover both lights and heavies later in the year, if need be. So that is the reason why we haven't gone too far out, but we will have, and we do have -- frankly, we do have enough mining capacity and pounds that are coming out of those mines to keep running that mill if we elect to do so on uranium only.

Your next question comes from the line of Nick Giles with B. Riley Securities.

Maybe starting on the uranium side. You mentioned blending Pinyon Plains higher-grade ore with LaSalle's lower-grade material through early '26. So can you quantify the margin differential between Pinyon Plain as a stand-alone campaign versus the blended approach? And then just given Pinyon Plain's superior economics, I mean, why wouldn't it make more sense to process higher-grade ore from that asset now while spot prices are above kind of the $75 level and preserve the LaSalle material for potential toll milling arrangements further down the road?

Yes. Look, it's a combination of things. I mean the Pinyon Plain is obviously absolutely our lowest cost source, with the exception of on occasion with some of the alternate feeds can be lower. And we look at how -- what feeds we have to process, we have the ability or will have the ability in 2026 to run just Pinyon Plain ore alone. We've made some modifications in the mill to do that. But also when we look at like towards the end of this year, we have -- and we need to do some blending to cut the grade down to some extent. The LaSalle complex -- and right now, we're not recovering the vanadium, okay? So when you look at the LaSalle complex, Pandora, our costs are, say, in the 70s, low 70s, recovering just uranium, but not recovering the vanadium. The vanadium gets put out the tails. We can bring the vanadium back at a later date. And so when you blend in those costs with Pinyon Plain and alternate feed, we can still come up with a very, very attractive combined production cost at those sites. But I believe that where we are with our processing is we're going to push the Pinyon Plain as much as we can. We'll complement alternate feed and La Salle, looking at that blended cost, but we're also likely going to be gaining inventory of mined unprocessed material this year and going forward, we should have a material amount of unprocessed ore at the mill that will be ready for processing at whatever rates we really choose up to complete design capacity of the White Mesa mill as we get Phase 2 rare earth circuit online in due course.

Maybe switching gears. You've signed the MOU with Vulcan could lead to an offtake agreement for downstream magnet production. I mean I think we'll be getting something on the product validation front in the near term. But can you just remind us what really the critical steps beyond that validation would be and kind of how that plays into commercial production decisions later in '26?

Yes. Well, these various groups that are looking for are oxides Initially, it's about the validation. And after that, it is working together to come up with potential offtake arrangements, pricing, whatnot, which we really aren't at that stage yet. I mean we are in some initial discussions on those fronts, but we haven't really advanced those. So as you are aware, between POSCO, Vulcan, and we're talking to others, it's pretty dynamic at this point in time. And -- but we haven't really secured any binding agreements for offtake at this moment.

[Operator Instructions] Your next question comes from the line of Tatiana Lauder with Merger Markets.

I just wanted to speak to the excitement around the Toliara acquisition. And the statement earlier that you guys are always looking at value-accretive opportunities. I wanted to ask what those opportunities might look like and what your forward-looking appetite to expand via acquisitions on any part of the uranium supply chain would be or if there's any excitement around some bolt-ons, divestitures or JVs?

Yes. Look, we look at every opportunity on its own. I mean we've expressed our desire to do further integration and from one aspect, but we're also looking at having additional feed and diversification of our feed as we go forward. So I think what you're seeing is when you look at the market and the people that are in the business, whether it be heavy mineral sands, rare earths or uranium, they're seeing our -- the strength that we have, the momentum that we have, and it's really a unique market. The world is wanting an integration story of scale. And that is what we're building. And there are companies that routinely come to us and trying to see how they can potentially join with us in different ways. It could be a number of different options on how they might be able to join us. And so we look at them on their merits. So all I'm saying is we will look at each opportunity opportunistically and see how that fits with our strategy and go from there. But I think that when you look at the market cap that we have and the momentum we have, it's very attractive for a number of these parties that are kind of isolated in a small portion of the business, and they don't really have that critical mass. And I'll ask Ross to say a few things on that front, too, if he--

Yes, Tatiana, it's a great question because there's so much activity going on in the market right now. I'd say we're looking at probably 2 dozen different opportunities on our plate that are very potentially opportunistic. And so to Mark's point, I think we're going to remain opportunistic. We've got a lot on our plate with our own assets. But that being said, we're always going to look for unique and good opportunities to bolt on to what we have. So there's no shortage of those, and the key is finding ones that are going to be accretive and good value for us. And I would just add that, that both in uranium and rare earths tied to mineral sands. So monazite is really critically important.

It sounds very exciting. Were most of those 2 dozen opportunities just around traditional mining or anything around uranium extraction or other parts of the supply chain?

They can be anything really. I think as a general rule of thumb, I'd say most of them are more rare earth oriented, but they can be different things. I mean, again, we've got the infrastructure, we're processing uranium. There's people that would like to have us purchase their ore, the same thing and whether it's monazite producers, heavy mineral sand producers, they're just seeing that momentum and capacity that we've established over the last few years.

And how soon do you anticipate going back out to the market? I know you guys just did the $700 million fund raise that was oversubscribed. How soon should we expect to see you guys going out again to raise more capital?

Look, we're in a strong position right now. And you look at our balance sheet, you look at the convert, you look at the building revenue from uranium, we're in good shape. So I'm not going to speculate on how soon we're going to go out to the market again. But again, we're only going to go out to the market whenever that is, when we think it makes sense. And we think it made sense to go out to the market on the convertible, and it was a real successful execution. We're very proud that we were -- Goldman Sachs took the lead on that, and we couldn't be happier with the outcome.

Your next question comes from the line of Eric is a retail investor.

So I had a broader question. Given that this current administration is a lot more active about making strategic investments in critical mineral producers, including the Pentagon's equity stake in MP or the DOE's investment in Lithium America or the even more recent Westinghouse partnership. I was just wondering if you guys were in talks with the administration regarding any sort of strategic partnerships? Yes.

Yes. Look, that's a loaded question. But I think everybody in these critical minerals sort of sectors, whichever one they are, are in D.C. talking to the administration on what support might be available or not. Look, we're no different. I mean, we spend a lot of time in D.C. We're not prepared to speculate on what the U.S. government may or may not do. But I do believe that really, we've been driving our own bus. We've secured multiple projects. We're producing a lot of the elements that the government is interested in, whether it be uranium, the rare earths, even some of the heavy mineral sands elements are also critical elements. And we are just basically moving forward on our own strategy. Does that mean that might be attractive to a government agency or potentially private entities that are interested in securing U.S. processed non-China material, I think it does. And that's where I'll pretty much leave it at that. So I just think we're positioning ourselves. We're playing the long game, and we'll see where we go from there. But yes, there are these investments that are going on. And just look at the assets we have and where we kind of fit into the picking the chain or food chain when you start looking at MP, Lynas, ourselves and others.

Your next question comes from the line of Nick Giles with B. Riley Securities.

I just wanted to really go back to your long-term contracting philosophy on the uranium side. I mean you have fresh capital. Utilities are out there discussing supply concerns. So I think you're uniquely positioned to sign baseload contracts that would really derisk production. So can you just speak to what percentage of 2026, 2027 production capacity you could target for term business? And what would be the remaining spot exposure?

Yes. Look, again, a tough one to fully quantify. Generally speaking, with my experience in this business, if you're not highly leveraged, I generally say 50% of both one or the other is not a bad place to be because you're either 50% right or 50% wrong, and you're not overcommitted. And we obviously are not overleveraged here from a debt perspective with our projects at the moment. So -- but we also want to make sure that we don't have to put too much material on the spot market because it's really not really -- it's thinly traded, and we recognize that we don't want to hold back the spot price. So it's something that we discuss frequently, and it's how to position what new contracts that we're willing to commit to. I believe that the price uranium has to continue to increase because of the true cost of producing a pound of uranium currently isn't at that, say, $80 per pound-ish. Yes, we're just going to play it by ear. But also at the same time, as I mentioned earlier, we currently use the mill to process both uranium and rare earths. And we're also looking at how if we decide or elect to process more rare earths and we're not going to process uranium that we don't overleverage ourselves in terms of too many long-term contracts. So it's that balance that we're looking at. But I think you can safely assume we're going to have 50% of our production contracted in some form, maybe a little bit more, but not less.

There are no further questions at this time. I would now like to turn the call back over to Mark Chalmers for closing remarks. Please go ahead.

Well, again, thank you, everyone, for your interest in Energy Fuels. It's been an exciting time for Energy Fuels. I mean you've looked at our share price and how it's appreciated over the last number of months. I think people are finally getting our strategy and the importance of our strategy. I don't think that we could ask for better timing when it comes to the realization by governments around the world that we've become overly dependent on Russia, China, and we plan to continue to execute. And so watch this space. We are focusing for the stars and doing things that are extraordinary.

Ladies and gentlemen, this concludes today's call. Thank you all for joining, and you may now disconnect.