Energy Fuels (UUUU) Receives New Alternate Feed Material Processing Contract

October 31, 2016 6:37 AM EDT
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Energy Fuels Inc. (NYSE: UUUU) announced that it has entered into a contract to secure additional quantities of one of its currently licensed uranium-bearing alternate feed materials for processing at the Company's 100%-owned White Mesa Mill (the "Mill"). Under the contract, the Company will earn a fee for processing the alternate feed material and returning finished uranium product to the generator of the feed material. The fee is expected to cover the Company's processing cost and provide the Company with a reasonable margin. As these additional quantities of alternate feed material are covered by an existing license amendment, no additional licensing actions will be required.

This will be a substantial project that was not previously included in the Company's business plan and results in a new source of revenue for 2017. The Company expects the net cash-flows from the processing of this material to be consistent with past arrangements. This new business is also expected to increase the Company's uranium processing in 2017 above previously announced guidance, although the uranium recovered will be for the account of a 3rd party.

Located in southeast Utah, the White Mesa Mill is the only licensed and operating conventional uranium mill in the United States. The Mill is also one of the only facilities in North America licensed and equipped to process and recycle alternate feed materials for the recovery of uranium. Alternate feed materials are materials, other than conventional ores, that contain recoverable quantities of natural uranium. Since the 1990's, the Mill has processed a number of different sources of alternate feed materials, and since 2005, has recovered a total of approximately 1.5 million pounds of U3O8 from those sources. This is an important aspect of the Mill's business, especially during times of low uranium prices.

Stephen P. Antony, President and CEO of Energy Fuels stated: "The Company's ability to process alternate feed materials for the recovery of uranium at the White Mesa Mill, including the fee processing arrangement we announced today, is a very important aspect of the Company's business and revenue stream. The White Mesa Mill is an excellent option for entities that generate significant quantities of uranium-bearing materials, since we are able to return value to them in the form of marketable uranium. This new tranche of material was not previously in our business plan, so the expected cash-flows are timely for Energy Fuels during today's low uranium prices. Finally, we are proud of our alternate feed business, as we are recycling these feed sources and recovering natural uranium which is used in the generation of clean, carbon-free nuclear energy. The Company continues to aggressively pursue additional alternate feed opportunities for the Mill, as an integral part of our business."

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