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Energy Fuels – America’s Premier Uranium Producer

Energy Fuels

Overview

Energy Fuels Inc. (TSX:EFR,NYSEMKT:UUUU) is a U.S.-based uranium producer and the second largest supplier of uranium within the United States. The United States, the world’s leading producer of nuclear energy and uranium consumer, currently obtains about 85% of its annual uranium requirements from foreign sources. The nation is home to 99 commercial nuclear reactors with five more under construction.

With the only conventional uranium mill operating in the United States and large portfolio of high-quality uranium properties, Energy Fuels offers excellent leverage to rising uranium prices and is in an excellent position to capitalize on the growing need for more domestic uranium supplies.

In 2015, Energy Fuels will clearly emerge as the leading uranium mining company focused in the U.S., in terms of current production, scalability, and resource portfolio, once it completes the acquisition of Uranerz Energy Corporation in the second quarter. The Company will also join Cameco and Areva as the only publicly traded uranium mining companies in the world with both ISR and conventional production.

Investment Highlights

  • Emergence as the largest publicly-traded uranium company focused on the U.S.
  • Focus on the U.S. – the largest consumer of uranium in the World.
  • The White Mesa Mill: The only conventional uranium mill operating in the U.S.
  • Over 5 million lbs. of U3O8 production since 2010.
  • Production of 1 million pounds in 2014 and expected production of 300,000 lbs. of U3O8 in 2015.
  • Current & Near-Term U3O8 Production: Pinenut Mine, Canyon Mine, Wate Project and Alternate Feed Materials
  • Significant Future Scalability: 3 large-scale uranium projects with over 50 million lbs. of combined M&I resources.
  • Roca Honda Project is a true flagship property which can be developed stand-alone or as a “bolt-on” to General Atomics’ Mt. Taylor mine.
  • Increasing uranium production through strategic acquisitions & organic growth.
  • Uranerz Acquisition: Combining Nichols Ranch with White Mesa Mill to become the only ISR & conventional uranium producer focused on the U.S.

Strategic Asset: White Mesa Mill

Energy-Fuels-Map

The White Mesa Mill is Energy Fuel’s most strategic asset as it is the only fully-licensed and operating conventional uranium mill in the United States, and one of only three in North America. White Mesa is strategically located in Blanding, Utah, central to the high-grade uranium mines of the Four Corners jurisdiction of the United States. Over the last five years, the mill has accounted for 20%-25% of U.S. uranium production, averaging approximately one million pounds of U3O8.

The White Mesa Mill has a licensed capacity of 2,000 tons per day and can produce up to 8 million lbs. of U3O8 per year.

The Mill was constructed in 1980 by Energy Fuels Nuclear Inc. In 2007, a $31 million modernization of the facility was completed. The White Mesa Mill uses sulfuric acid leaching and a solvent extraction recovery process. White Mesa also has a co-recovery circuit to produce vanadium from Colorado Plateau ores, and an alternate feed circuit to process other uranium-bearing materials, such as those derived from uranium conversion and other metal processing from third party producers, thus enhancing the Mill’s long term economic viability.

The uranium produced is purchased by utility companies and shipped to conversion facilities as the next step in the production of fuel for nuclear power. The White Mesa Mill also has the capability to produce vanadium contained in certain local ores. This material is shipped mostly to steel and alloy manufacturers.

Energy Fuels Colorado Mill Uranium

White Mesa is strategically located in Blanding, Utah, central to the uranium and uranium/vanadium mines of the Four Corners region of the United States. The mill was constructed in 1980 by Energy Fuels Nuclear Inc. In 2007, a $31 million modernization of the facility was completed. The White Mesa Mill utilizes sulfuric acid leaching and a solvent extraction recovery process. The uranium produced is purchased by utility companies and shipped to conversion facilities as the next step in the production of fuel for nuclear power. The vanadium is shipped mostly to steel and alloy manufacturers.

Energy Fuels Conventional Uranium

Diversifying Production

Energy Fuels to acquire Uranerz

Energy Fuels announced in January 2015 that it will soon acquire Uranerz Energy Corporation and its assets. The acquisition is in line with the Company’s mandate to diversify and grow its production sources. Uranerz controls a large, strategic land position in the prolific Powder River Basin in Wyoming. Uranerz’ began production at Nichols Ranch Processing Facility in April 2014, putting out 197,600 pounds of uranium for the year. The facility has a licensed capacity of 2 million pounds of uranium per year.

Adding production from the Nichols Ranch ISR mine and plant in Wyoming will give Energy Fuels both diversified ISR and conventional uranium production from two operating production centres. The combined Company will have six uranium sales contracts extending to 2020, with nearly one million pounds of U3O8 under contract in 2015 for a combined average sales price of $59.19 per pound.

“Diversifying our production sources helps to lower our overall production costs. . . [w]ith our proposed acquisition of Uranerz we’re looking to significantly increase our production scalability especially at the lower end of our cost curve,” stated Curtis H. Moore, Vice President of Marketing and Corporate Development at PDAC 2015.

Acquiring Uranerz and its assets is also expected to deepen the value of Energy Fuels’ already impressive development pipeline which will include the largest NI 43-101 resource base among producers in the United States. Once the acquisition is complete, the Company will be the only integrated mining company with conventional and ISR uranium production in the United States. The acquisition is expected to be completed in late-June or early-July 2015.

Energy Fuels has already established itself as a leading producer of uranium in the U.S. and the premier consolidator of U.S.-based uranium assets. By adding Uranerz to our corporate umbrella, we are creating a multi-source uranium production platform that is better positioned to respond to the dynamic and volatile nature of the uranium market,” stated Stephen Antony, President & CEO.

Current Production

Canyon Mine: Development to re-commence in 2015

In Q2 2015, Energy Fuels will begin moving its mining personnel from the Pinenut Mine to the fully-permitted Canyon Mine in northern Arizona (see February 6, 2015 news release). The transition is currently underway to restart development at the Canyon mine, a very high-grade breccia pipe uranium mine.

The breccia deposits of northern Arizona contain the highest grades of uranium found in the United States, and are among the highest grades in the world outside Canada’s Athabasca Basin.

Currently, surface development at Canyon includes a headframe, evaporation pond, hoist, and environmental controls. As of February 2015, 275 feet of a production shaft had been sunk with work on the remaining 1,200 feet of shaft expected to begin this summer (see February 6, 2015 news release).

According to a 2012 technical report, Inferred Mineral Resources at the Canyon mine are estimated to include 82,800 tons grading 0.98% e U3O8 containing 1,629,000 pounds U3O8.

Scalable Production

Energy Fuels has successfully amassed a diverse portfolio of late-development stage and production-ready uranium properties giving the Company significant future production scalability.

Roca Honda — New Mexico

The Roca Honda Project was acquired by Energy Fuels as part of its acquisition of Strathmore Minerals in 2013. The project is held in a joint venture between the Company (60%) and Sumitomo Corporation of Japan (40%). The project is located in northwest New Mexico within trucking distance of Energy Fuels’ White Mesa Mill.

Roca Honda is one of the largest and highest grade uranium development-stage projects in the United States. The 2015 NI 43-101 Preliminary Economic Assessment and Technical Report on the project shows 1.51 million tons of Measured and Indicated resources with an average grade of 0.48% U3O8 containing 14.56 million pounds of U3O8 as well as an additional 1.20 million tons of Inferred Mineral Resources with an average grade of 0.47% U3O8 containing 11.21 million pounds of U3O8. Project economics include a nine-year mine life and annual production of 2.6 million pounds U3O8.

On May 28, 2015, Energy Fuels announced that it had entered into an agreement with Uranium Resources Inc. to acquire a highly strategic 4,580-acre land position adjacent to its existing Roca Honda holdings. This is a major step in consolidating the properties adjacent to General Atomics’ Mountain Taylor uranium mine. The properties being acquired include significant historical resources and a historic mine shaft constructed in the early 1980’s by Kerr-McGee to within 200 feet of the ore body. These properties have the potential to significantly enhance the project economics of Roca Honda. In addition, Energy Fuels’ White Mesa Mill is the only facility currently capable of processing resources mined from Roca Honda and Mount Taylor (about 80 million lbs. with an average grade of over 0.40% U3O8).

Energy-Fuels-Roca-Honda-Map

Roca Honda areas in red; areas with hatch marks are what Energy Fuels is acquiring and the unhatched red areas are existing projects

Sheep Mountain — Wyoming

The Sheep Mountain Project is located approximately eight miles south of Jeffrey City, Wyoming on a land package totaling 4,475 acres. The Sheep Mountain Project includes the Congo Pit, a proposed open pit development, and the reopening of the existing Sheep Mountain Underground mine.

Permitting and licensing of the project is well-advanced. The project has a Resource Estimate of approximately 12.9 million tons of Measured and Indicated resources at an average grade of 0.12% U3O8 (30.3 million lbs. U3O8), including 18.4 million pounds of Reserves.

Energy Fuels intends to redevelop Sheep Mountain using both conventional underground and open pit mining methods with uranium produced in a new heap leach extraction process.

The current plan calls for production of 1.5 million lbs. per year, and a mine life of the open pit of 15 years with an additional 5 years allotted for mine closure and reclamation. The estimated mine life of the underground operation is 11 years. The heap leach facility will be designed to accommodate both the mined material from the open pit and underground mine operations over the entire operating life of the two operations (see 2012 Updated Preliminary Feasibility Study). There is also a nearby uranium mill, which is currently being maintained on standby.

Henry Mountains — Utah

The Henry Mountains Complex is a contiguous group of uranium properties which includes the Tony M/Southwest Deposit, the Copper Bench/Indian Bench Deposit, and the Tony M Mine. The 2012 NI 43-101 Technical Report on the Complex shows approximately 2.5 million tons of Indicated resources with an average grade of 0.27% U3O8 (12.8 million pounds U3O8) and approximately 1.61 million tons of Inferred resources with an average grade of 0.25% U3O8 (8.08 million pounds U3O8).

The Tony M portion of the Henry Mountains Complex is currently on care and maintenance. The high-grade Bullfrog deposit is currently being permitted.

La Sal Complex — Utah

The Beaver and Pandora Mines (two mines within the La Sal Complex) were in production as recently as late 2012, at which time they were placed on standby. The La Sal Complex includes four uranium/vanadium mines (La Sal, Beaver, Energy Queen and Pandora) connected by an extensive network of underground workings. The Complex is located in the La Sal Mining District along the La Sal Trend which runs east/west for about 20 miles. Ore is processed at the Company’s nearby White Mesa Mill.

Daneros — Utah

The fully-permitted and developed Daneros mine was in production until October 2012, at which point it was placed on standby. The Daneros Mine is located in Utah’s White Canyon Mining District from which historic production totaled more than 11 million pounds of uranium. Daneros contains approximately 156,600 tons of Inferred resources with an average grade of 0.21% containing 661,000 pounds of uranium (December 31, 2013). Ore is processed at the Company’s nearby White Mesa Mill.

Wate – Arizona

The Wate Project is a high-grade breccia pipe deposit located in Northern Arizona. Energy Fuels acquired a 50% interest in the Wate Project in 2015 from VANE Minerals. Uranium 1 holds the other 50%.

The Wate Project, which sits on Arizona State Land, is in an advanced stage of permitting. A mineral lease (which includes a mining permit) is expected to be issued later in 2015 or 2016. According to a 2015 Technical Report, the Wate Project contains approximately 1.12 million pounds of uranium contained in approximately 70,000 tons of Inferred Mineral Resources with an average grade of 0.79% U3O8.

The Company expects to place the Wate Project into production following the Canyon mine.

Management

Stephen P. Antony – President and Chief Executive Officer
Over the last 33 years Mr. Antony has held senior positions in both the technical and managerial sectors within the mining industry. In the mid-1980’s he entered the uranium business with Mobil Oil’s Mining and Mineral group, during which time he developed the reclamation plan for Mobil’s El Mesquite ISL operation in south Texas. He joined Energy Fuels Nuclear, Inc. (EFN) in 1986 as the company was growing to become the largest U3O8 producer in the US, peaking at more than five million pounds annually. Mr. Antony served as director of Technical Services for the company where he authored many of the feasibility studies for the expansion of EFN’s highly successful Breccia Pipe Mine projects in the Arizona Strip. Subsequent to his employment with EFN, Mr. Antony held a brief position with Power Resources, Inc (PRI) as Vice President of Business Development. He then consulted to Cameco Corp. on due diligence prior to their acquisition of PRI, which Cameco undertook as part of their strategy to become a significant uranium producer in the US. Mr. Antony was most recently Chief Operating Officer of Energy Fuels, responsible for the daily operations of the Company, including all aspects of uranium property exploration, ore production and mill processing. He was appointed President and CEO on April 1, 2010. Mr. Antony, is a registered professional engineer, and is a graduate of the Colorado School of Mines, and holds a Masters of Business Administration (MBA) from the University of Denver.

Harold R. Roberts – Executive Vice President and Chief Operating Officer
Mr. Roberts is Chief Operating Officer for Energy Fuels. He was previously the Executive Vice President – U.S. Operations for Denison Mines Corp. Prior to his employment with Denison, Mr. Roberts was the President of Energy Fuels Nuclear, Inc. Throughout his career Mr. Roberts has held various positions related to operations oversight, project development, and permitting of mining operations. Mr. Roberts obtained his Bachelor of Science degree in Civil Engineering from Montana State University in 1975, and is a Registered Professional Engineer in several western States.

Gary R. Steele – Executive Vice President, Corporate Marketing
Over a 39 year career, Mr. Steele has held a wide range of management positions in both the technical and commercial areas of the mining industry. A coal industry veteran with over 20 years experience, he worked in engineering and operating roles, both underground and surface, and was Director of Utility Marketing for a large Powder River Basin, Wyoming, coal producer, negotiating fuel supply and transportation contracts with major US utilities. He was also designated a member of the corporate M&A due diligence team. This mining experience was followed by 15 years in the investment management business, and the establishment of Steele Capital Advisors, an advisory firm managing investment portfolios for private clients, and specializing in mineral industry opportunities. Mr. Steele joined Energy Fuels in 2006, and is responsible for economic and project evaluation, and utility marketing at Energy Fuels. Mr. Steele is a registered professional engineer and an engineering graduate of the Colorado School of Mines. He also holds an MSc. in Mineral Economics from the Colorado School of Mines.

Graham G. Moylan – Chief Financial Officer
Mr. Moylan is an experienced finance professional and brings to Energy Fuels many years of combined experience across mining, capital markets, finance and accounting in both Canada and the United States. Prior to joining Energy Fuels, Mr. Moylan was a Director with Dundee Capital Markets’ investment banking group for seven years, gaining significant financing and M&A transaction experience within the uranium sector. Prior to joining Dundee Capital Markets, Mr. Moylan was employed by KPMG LLP in their New York and Northern Virginia offices. Mr. Moylan began his career with IBM Canada in their finance group in Toronto. Mr. Moylan is a licensed Certified Public Accountant (Colorado) and has Honours Bachelor of Arts and Master of Management and Professional Accounting degrees from the University of Toronto.

David C. Frydenlund – Senior Vice President Regulatory Affairs, General Counsel and Corporate Secretary
Mr. Frydenlund is Senior Vice President Regulatory Affairs, General Counsel and Corporate Secretary of Energy Fuels. Mr. Frydenlund’s chief responsibilities include all legal and regulatory matters relating to the Company’s activities. His expertise extends to NRC, EPA, State and Federal regulatory and environmental laws and regulations. From 1997 to July 2012, Mr. Frydenlund was Vice President Regulatory Affairs, Counsel and Corporate Secretary of Denison Mines Corp., and its predecessor International Uranium Corporation (IUC), and was also a director of IUC from 1997 to 2006. From 1996 to 1997, Mr. Frydenlund was a Vice President of the Lundin Group of international public mining and oil and gas companies, and prior thereto was a partner with the Vancouver law firm of Ladner Downs (now Borden Ladner Gervais) where his practice focused on corporate, securities and international mining transactions law. Mr. Frydenlund was also an adjunct professor, corporate law, at the University of British Columbia Faculty of Law from 1990-1994. Mr. Frydenlund holds a bachelors degree from Simon Fraser University, a masters degree from the University of Chicago and a law degree from the University of Toronto.