Energy Fuels Inc
TSX:EFR
Earnings Call Analysis
Q3-2023 Analysis
Energy Fuels Inc
At Energy Fuels' Q3 conference call, CEO Mark Chalmers emphasized the company's unique position in decarbonization and electrification, delivering an optimistic message on its future in the critical minerals space. Energy Fuels prides itself on a debt-free balance sheet and a robust working capital of $162 million, bolstered further by a $20 million repayment from enCore after the quarter. The company, which has a significant inventory of uranium and vanadium valued below current market prices, reported healthy gross margin sales and a strategic emphasis on adding value to its products.
Energy Fuels is gearing up for a return to commercial uranium production in early 2024 with four mines, projecting a capacity of around 1 million pounds of uranium per year. The company sold 560,000 pounds of uranium at an average price of about $59.42 in 2023, striking a balance between spot price volatility and long-term contract stability. Moreover, through its uranium inventory management and operational flexibility, Energy Fuels is able to stockpile uranium for optimized production conditions, while continually seeking long-term supply agreements amid rising prices and scarcity.
Energy Fuels is making significant strides in the REE sector by advancing Phase 1 of its separation plant with an expected operational date in Q1 2024. Additionally, a ‘Phase 2’ expansion could potentially scale up to 3,000 tonnes or more per year, dependent on monazite feedstock availability. Steady progress is reported at the White Mesa Mill expansion, with a focus on cost-effective advancement at around $25 million. The long-term REE strategy includes Phase 3 efforts, anticipating the separation of heavy REE oxides by 2027 to 2028.
Evaluating the use of funds, Energy Fuels has identified key capital expenditures for increasing uranium production and advancing rare earth initiatives. Management noted that mining operations would incur variable costs but remained confident about the strong balance sheet covering planned expenses. Energy Fuels is also actively preparing for potential mergers and acquisitions as part of its growth strategy, underscoring a balanced perspective on maintaining a strong cash position while being opportunistic about future expansions.
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Good afternoon. My name is John, and I will be your conference operator today. At this time, I would like to welcome everyone to the Energy Fuels Third Quarter 2023 Conference Call. [Operator Instructions] Mr. Chalmers, you may begin your conference.
Thank you, John. And good morning or afternoon, depending on where you're joining this call from. Yes, and thank you for joining the Q3 conference call and webcast today. As John indicated, my name is Mark Chalmers, and I'm President and CEO of Energy Fuels. Joining me today are Tom Brock, our CFO; and Curtis Moore, our Senior VP of Marketing and Corporate Development. All I can say it has been very busy. Uranium markets are continuing to strengthen, which is bringing more opportunities to the company. And we also believe we are experiencing greater appreciation for all the great things Energy Fuels does in the critical mineral space. Every conference call, I emphasize how Energy Fuels is a truly unique investment vehicle for decarbonization and electrification. If you believe in the energy transition, we are a one-stop shop investment. No other company now has the ability to advance uranium, vanadium, rare earth and potentially even medical isotope production capabilities. We'll continue to maintain and improve a very strong and improving balance sheet with 0 debt. In addition, many people keep asking, it's a great -- it's great that you making profitable uranium sales in 2023, but when are you going back into uranium production? The answer is we could resume uranium production right now if we wished. However, our current plan, we expect to resume commercial scale uranium production early next year, and we'll talk about this more during the presentation. I'll also elaborate on Energy Fuels' financial and operational accomplishments during the quarter and what to expect during the remainder of the year. I also want to remind you that you're controlling your slides to the presentation from your own device, and I'll endeavor to tell you when to advance to the next slide. There will also be, as John mentioned, time for questions at the end of the presentation. For those of you who cannot join us today, we'll have replays of this presentation available for 2 weeks on our website either later today or tomorrow. So let's get going. Certainly, this first slide, most of you, if not all of you have seen it before. But again, Energy Fuels is a company that is focused on the energy transition. And when you look at the critical elements on -- in the world, Energy Fuels currently has or will have the capability of producing 8 to 10 of those critical elements. Next slide. I may be making some forward-looking statements, and they're included in the presentation. Next slide. So again, Energy Fuels is a leading U.S. producer of uranium, vanadium and earth elements, all created to a better world on the energy transition. Next slide. Now I've talked about the periodic table and the changes that we're seeing in the mining and processing industries over the last few years. And Energy Fuels, as we all know, has a long history of uranium, vanadium production but is now adding the rare earth elements and radium. And so the whole focus on these different elements in the periodic table is increasing more by the day. And when I graduated from the University of Arizona, I have to say it looks much different to a mining or geological professional today than it did 40 years ago because there's all these new elements that are all focused on electrification and decarbonization. Next slide. So we know that all of our products that Energy Fuels makes or value adds to our high-value product lines, uranium, which is about 20% of the electricity in the United States and 50% of the carbon 0 electricity, and getting increasing attention with the focus on small module reactors and the need for baseload energy globally. And basically, all the forecasts are showing increased rates of demand over the coming years because of that realization. Rare Earth use critical elements and -- for the powerful magnets used in electric vehicles and wind generation as well as other high-tech appliances and Energy Fuels is quickly advancing our ability to separate rare earth elements into separated oxides. I'll talk about that more later. Vanadium, again, is a critical element used for high strength and also looked at and considered a very, very unique element for grid scale batteries. And again, we have the only conventional vanadium processing plant in the United States. The medical isotopes critical for emerging cancer therapies. We're making great progress on that front and getting closer to signing some offtake agreements and hopefully, not-too-distant future. Recycling, and I've said this many times without the ability to recycle natural uranium and vanadium, the mill would have shut down and be reclaimed decades ago, and that's a unique part of our business strategy and particularly weak market periods. Financial strength, significant cash and inventory, and we're always proud to report on our financial strength. $162 million of working capital, which is really quite conservative, depending on how you add that all up. But -- and again, I'll talk more about that, but we are very, very proud to always have a strong balance sheet. Next slide. Just a picture of the Pinyon Plain Mine, which I've told many of you that I actually bolted together that head frame in 1987. Next slide. So a little bit more on our balance sheet, $162 million of working capital at the end of Q3 made up of about $55 million of cash, cash equivalents, $61 million of marketable securities, $30 million of product and inventory, which currently at current commodity prices is almost $20 million greater than that, 0 debt. We have about $1 billion worth of infrastructure that's completely paid for, and we still have significant inventories of uranium, nearly 600,000 pounds of finished uranium, 900,000 pounds of finished vanadium and also 11 tonnes of high purity separated rare carbonate. Now I also want to mention that in addition to that, post quarter, enCore has repaid an additional $20 million on the convertible note that we have with them, leaving a balance of about $20 million yet to be paid off. So they paid off in total, about $40 million of the $60 million convertible note. So again, just further strengthening our balance sheet. Next slide. This quarter, we did sell 180,000 pounds to a U.S. nuclear utility that had a gross margin of about 50%, and was sold at about $58 a pound. And I want to point out that even though the spot price is $73 to $74 a pound, the long-term price is around $62 per pound. So when you sign contracts, you're not going to get the highest spot price at all times, but you do get certainty with floors and ceilings.
More on our preparation of our uranium mines. We are preparing 4 conventional uranium, vanadium mines for production and I want to explain a little bit about this. First of all, La Sal complex. We put in a new building there. We're ordering new mining equipment. We're also getting and hiring miners to refurbish and get ready to start mining at the La Sal complex, which includes the Beaver and La Sal mines. Also the Whirlwind mine, which is in Colorado, we did almost a year's worth of refurbishing of the decline, putting it into good operational shape, just restart mining in the not-too-distant future. And the Pinyon Plain mine in Arizona. We've done a lot of work around the shaft where we put in all the shaft pockets required for commercial production, and we're currently doing a vent hole -- 8-foot diameter vent hole that we're currently advancing as we speak to establish ventilation. So we're doing a lot of work. And as I said, if we wanted to, we could start mining today, literally with a phone call, but we're getting all these projects ready to restart at commercial production when we're ready to do that. I also want to indicate that these mines that we're getting ready will have the capacity to recommence at a production rate of about 1 million pounds of mine production per year, maybe greater than that in 2024. And final production decisions really depends on our contract requirements, inventory levels and market conditions. The one thing that is really unique about Energy Fuels is we can mix and match conventional production, ISR production, alternate feed in our inventories as required, and that gives us unique flexibility in a number of different ways. We can mine uranium. We don't have to process it yet. We can stockpile it. We can process it. And nobody can do this and we can do it at very attractive cost for whatever the requirements are with regard to our contracts or out of future uranium sales. Uranium inventory, I mentioned, we have about 600,000 pounds of finished inventory, but we have nearly 400,000 pounds of raw materials yet to be processed uranium. Next slide. So on the rare earth element production, we're currently awaiting our next shipment of monocyte from Chemours. We expect that later in Q4 or early Q1 on '24 and we'll start processing that once we receive it and when we're ready to start commissioning our Phase 1 separation plant, which is expected to be operational in Q1 of '24. We started building, expanding the SX building at White Mesa by modifying it and adding existing or additional solvent extraction capabilities to that existing SX building, and we expect to have capacity of around 800 to 1,000 metric tonnes of separated NdPr oxide per year early next year capacity given adequate fee. So the development work at the mill is well advanced. Major components have been ordered and are being installed and we expect that to be the cost of doing that, about $25 million. We also showcased what we're doing at the mill at Open House in October. We had about 200 people show up for that and it was really a great event, including Miss America showing up and gave a really wonderful speech to the group about the positive aspects and expanding aspects of nuclear power going forward. Next slide. We are also advancing what we call Phase 2 separation project. And that basically can be as big as we want it to be, depending on what we think the future looks like for securing future feeds of monocyte. It could be 3,000 tonnes or greater per year. We are also expecting to advance the Kraken lead circuit, ahead of the SX circuit of Phase 2 to allow the simultaneous production of rare earth and uranium separately at the mill site. Engineering for Phase 3 and commissioning and piloting is going to start on the actual piloting. It's going to start later this year, and we still expect to have the capabilities of doing the separation of heavy oxides in that 2027 to 2028 time period. The Brazil project, Bahia is advancing. We're having a new sonic drill rig delivered to the site this month. The next phase of drilling is going to commence soon after that. We've done some initial bulk test work on production of a heavy mineral concentrate we're waiting results and we're starting community and stakeholder engagement. Next slide. Not a lot has happened lately on the vanadium sales. We did do some sales earlier this year, and we sold it at about a 37% margin. And again, I just want to emphasize that the company has the only conventional vanadium circuit in the United States, also a critical element. We still have about 900,000 pounds of finished vanadium in inventory and we have the ability to recover more vanadium from our tailings or our conventional mines when we decide to do that. Next slide. So this slide just highlights a bit more about our significant liquidity and our strong balance sheet, the $162 million. And as I said, that does not include the $20 million paid by Encore on the note post quarter, and it also does not include the value of our CUR ISO investment or current inventory value. So again, we define working capital based on GAAP principles. So we are, again, very strong on all fronts, no debt.
Also the inventories we have of uranium and vanadium and when you value our inventories at current market values, you could get a substantial upgrade in the value of those finished goods and those inventories. I mean just look at, for example, the uranium on our books is on our books for $29 a pound. Current price is $73. It's up over 150%. Vanadium prices have come down a bit, but still pretty steady on what our value is on the books. So let's just look at what the 2023 guidance looks like, we will sell or we have sold 560,000 pounds of uranium at an average price of about $59.42. And as I said, you're never going to catch the spot price. If you try to catch the spot price, you'll never have any long-term contracts. So we sold uranium to the U.S. reserve for about $61 a pound earlier this year, and we made 2 sales to our U.S. utilities, 80,000 and 180,000 pounds in separate deliveries. We're continuing to prepare at least 1 mine to go in production, it's probably going to be more than 1 mine. As I said, we can start any time, but we're waiting until we're completely ready to start at commercial levels and optimal levels.
We're looking for additional long-term supply agreements, which we think certainly with the price of uranium going up and the scarcity of uranium that there will be other contracts to be had on the market with utilities. We're not doing any uranium production in terms of processing uranium in 2023 for finished goods. We are processing uranium and keeping it in solution at the middleware processing rare IRFs, and we're continuing to build up our alternate feed inventories. And when we start producing uranium at the mines, we'll be stockpiling uranium when we go back into commercial production. We plan to process later this year, early next year, about another 600 tonnes of monocyte to commission the circuit and we'll continue to advance and commission this Phase 1 circuit that I've already mentioned late, probably later in Q1 2024. We're still looking for rare earth offtakes, the HIA project I mentioned, we're advancing that, and we are aggressively looking for M&A opportunities in both the rare earth space and the uranium space globally. So that's the end. Next slide. This beautiful sunset in San Juan County, Utah. I now open it up for any questions anyone would have of myself, Tom Brock or Curtis Moore.
[Operator Instructions] Your first question comes from the line of Heiko Ihle from H.C. Wainright.
And also thanks for taking the tour a couple of weeks ago. Your balance sheet is very solid. Let's talk a bit about the use of funds. Can you break down some of the larger things that you're going to have to spend money on in the next 12 months or for the end of 2024?
Yes. Heiko, some of the major uses of capital are on increasing uranium production in terms of more mining. I mean a lot of the development work, as I mentioned, with regard to like the vent hole shaft work, all that is getting close to being completed. So basically, for every tonne we mine, there will be cash consumed for the mining. In addition, we're looking at finishing up the Phase I. Now it's around $25 million, and a significant portion, probably half of that has been spent thus far. We're looking at securing or purchasing additional monocyte that is a work in progress, the permitting. But I think the biggest uses are certainly restarting the mines, also advancing our rare earth initiatives. But yes, we have a strong balance sheet to cover that.
You would be able to quantify any of these line items will you?
Heiko, I can quantify more depending on -- I'd rather do it offline, but I mean, for example, each tonne we mine of ore is going to cost us somewhere between $100 to $200 a tonne for every tonne that we buy in. I know that doesn't include processing. But I don't know Mr. Brock, you're on there, and you've been working with the some of the budgets for 2024. Is there anything you'd want to add to that in terms of expenditure?
Yes. I think you're spot on there, Mark. Heiko, Tom Brock here. We continue to work through the budgeting process for 2024. We're pretty in tune to what's coming down the pike, if you will, based on our business strategies for '24 and beyond. But as Mark mentioned earlier, what are the outliers here is M&A activity and our success there?
Yes. So you've got the operational activities that you also have to look at what potential M&A activities we could have that also could potentially consume cash.
Fair enough. I was trying to set up a slightly different question, but I think I want to ask it anyways. I mean you got $54 million of cash, you've got $70 million of marketable securities. Obviously, there is costs ramping up, starting up all that stuff. I mean at $162 million in working cap, we're probably beyond any limits of anything that could be really done in a logical way. And I get that you want your balance sheet to be strong because who knows what the future holds. But is it fair to say that working cap in excess of $100 million, $120 million, $140 million, $150 million is more than enough than we think we're really going to need?
You never have too much cash, Heiko. But really, we're looking at this in a couple of aspects, as Tom hit on. We're looking at it at what we need for our -- currently, our business strategy when it comes to the uranium and [indiscernible], but we're also looking at in terms of M&A activity.
So there's 2 pieces of that. And we're not being shy on sort of the potential scale that M&A could be. And so we're trying to make sure we have plenty of powder here to give us the biggest chances of success on all fronts.
Fair enough. It's been a great year for the company to keep up to get work.
Your next question comes from the line of Joseph Reagor from ROTH MKM.
Mark and team, trying following a little bit on what Heiko was asking about the budget next year. Do you have a range you think your like all-in costs might fall into for uranium once you start the milling campaign?
I have to be careful as you can gather on giving exact numbers because we don't have exact numbers. But I have said this at our lowest -- well, our inventory is around $30 a pound of finished goods. The Pinyon Plain Mine, we expect it to be somewhere between $35 to $40 per pound. . When we look at a combination of Pinyon Plain, these other mines are restarting alternate feed material, we believe it will be under $50 a pound, and very competitive world competitive in terms of how we can mix and match. As I said, the inventories, the alternate feed, production from Pinyon Plain and other operations. So it's going to be -- I can say this pretty -- I believe it will be well under $50 per pound.
Okay. That's helpful. And then I didn't hear you -- I know you mentioned ISR, but I'm assuming you're referring to Nichols Ranch. Any thoughts there on when we might see a restart? Is there a certain price you need for a certain period of time? Or is it just it's certain number in the Q? Like how do we think about that project?
We're -- I think I mentioned it before, when you look at the ISR projects, when you produce a pound of uranium from conventional mine, you can mine it, you can stop that day, you can stockpile it, you can process it. There's a number of steps you can make as you're sort of building your book for production at different steps. With ISR, once you produce a pound from ISR, you're basically committed to that production for 10 years plus through restoration, and it's harder to stop that process. So we're really looking at when we get the absolute, the demand signals with long-term contracts supporting that longer-term approach. I mean, currently, our market contracts go up to about 8 years, but we're really looking for that. So we like the way that we can be modular with our conventional mining assets and our alternate feed at this point in time, but we're certainly looking for a restart when the time is right. But we think that in our circumstances, the restart of the conventional mines makes more sense at this time.
Okay. Fair enough. And then one final thing on contracts versus inventory. As you guys look out to 2024 with this plan to potentially start milling in the latter part of 2024 or early '25. How do you think about your inventory as far as like available pounds that you could sell if pricing were to spike versus what's under contract? Like how much is that gap left? And how much of it would you be comfortable selling in the right circumstances?
Well, I guess it comes down to in the right circumstances. We look at the inventory that we have, has given us a lot of optionality on all things like not only when we mine uranium, how much we mine. And when we process, we plan to mine more uranium than we have under contract, and that gives us ability to play that market when the time is right. So I don't have an absolute answer for it, but we'll always look at what we think makes the most sense for our shareholders.
Your next question comes from the line of Justin Chan from SCP Resource Finance.
Okay. I couldn't tell which one was the mute. I think I got it wrong. Can you hear me now?
Hearing you fine, Justin.
All right. Great. Sorry about that start. I guess my first question is on -- just in terms of mining volumes when you start out to get an understanding of how to model that and what that will look like. Do you expect to produce a steady volume of tonnage that either matches your contracts or is a higher number? Or will mining be similar to processing and campaigns, you stockpile or you choose to process it? Just trying to get a sense of that cadence.
Yes. Justin, as I said, we're looking at being able to be in a position in 2024 to, at the very least, mine around 1 million pounds or greater per year. And then depending on how the market matures, we can increase that to 2 million pounds of uranium production per year with limited capital. And then we can go up from there, but then we start having to spend greater quantum of capital.
I mean, generally speaking, we like to be contracted for, I'd say, in the order of at least 50% of our production, Justin. It could be more, it could be less, but some more in that kind of order. So we're planning on about 1 million-plus pounds per year. And as I said, it depends on how we want to mix and match with inventories from $30 per pound to Pinyon Plain and other sources, how we mix it, but it's very competitive. I said it was under $50. It could be in a range of $40 to $50, depending on how you mix and match to serve the requirements that we're doing. But again, I don't want to be held down to that because of a conference call like this, but it's very competitive. We're very comfortable with our price structures compared to the rest of the world.
Got you. But if I were to -- so just based on that, once you start off at that kind of 1 million-pound number, you would anticipate, let's say, if market conditions don't change, you kind of produce around that level. and then at some future point, you could increase it.
Correct. Correct. We got to get the flywheel going. I mean some of the things that like just getting miners rehired and trained and whatnot takes time. So we're comfortable we can get to that 1 million-pound level quickly. Like in 2024, we don't have to process that ore. We'll stockpile it, put it at the mill, keep it at the mine site, but it will be all along the rate of about 1 million pounds until we decide to go greater than that.
Okay. Got you. And then in terms of -- on the rare side of the business, as you ramp up the separation circuit, do you have enough material right now to, I guess, allow you to ramp up? Are you comfortable with your inventory levels there?
Yes. Justin, we've been challenged on monocyte quantities. As you're aware of, we received material from Chemours, and they've under delivered. We're still working to resolve that with them. Yes, to get to that 800 to 1,000 tonnes of NdPr per year is still subject to securing of adequate feed. I've said we've been talking to a number of parties in that regard. Now one thing that's working in our favor is that the price of rare earths has come down quite materially since a year ago or so. And that's helping create more urgency with others to supply material to the mill. But that is certainly subject to securing the feed to get to those quantities, and that's around 8,000 to 10,000 tonnes a year of monocyte to get to 8,000 to 10,000 -- 800 to 1,000 tonnes of NdPr tonnes per year.
Got you. And then just maybe a question towards that. And -- at [indiscernible], I guess, can you talk me through what you expect your time lines are. So there's more drilling in Q4. Would that drilling round give you enough to declare a resource? Or do you think you -- would you anticipate more drilling next year before you put out resource?
Yes. We're hoping to put out a resource as soon as we can. It's a large land area, and you can appreciate that when you have a large area, you can't drill it out in any short order. So we are looking at putting out a resource at least on some areas in the next -- within the next year. We're ramping up the permitting there community consultation and whatnot. So it's still going to take a few years to get to producing concentrate. But we do, we plan to ramp it up as quickly as we can. .
Your next question comes from the line of Mike Heim from Noble Financial Markets.
Okay. Great. We've talked a couple of times about the mill campaign in '24, '25. I just want to make sure I understand that. Is that simply just talking about getting things started? Or are there upgrades to the system or other type of costs that might come into play that we should talk about?
Well, the '24 time period is really focused on using the mill for the Phase 1 cracking, leaching and separation into oxides. And that's that $25 million-ish for basically completing the extra SX and the existing excess building. That's really it when it comes to -- when we go back into uranium production at the mill, there really isn't any major capital work that has to go in for that. but we have to flip the mill over so it can produce uranium and vanadium when we elect to do that. So no major capital outside of the, say, $25 million for the FX building for the rears. .
Okay. And then maybe a question on the rare earth specifically, the cost for the rarest carbonate. It couldn't help notice that the cost per tonne dropped 30% year-over-year. Is that just a reflection of ramping things up? Or are there other items that make that -- I guess, what I'm looking forward, is that a reasonable number to use going forward?
The -- one of the problems we have with the carbonates, the quantities are so low that we -- it doesn't really reflect the cost in absolute terms because the quantities are so small. So we really got to get it up to get a better cost. Tom, are you on the line, you can answer any question in terms of the rare earth processing costs?
Yes. I would agree with your comment there, Mark, that the fact that we're not fully utilizing efficiently the process for rare earths at this point in time, you're going to find a lot of fixed costs that are not being necessarily absorbed or leading to a higher cost per production. So to answer your question, I would not use that as a go forward.
Meaning that it could even get better as production ramps higher?
Correct.
And then I guess that the...
Yes. If you looked at -- Michael, if you looked at like processing 500 tonnes in a year and you need to be up to 1,000 or 10,000 tonnes or something, you can see where there's pretty small quantities to get real material numbers on. So yes.
And then finally for me, I just want to ask 1 question about the M&A that kind of was a little bit new. And I certainly don't expect any exact comments, but can you talk about what type of things you'd be looking to gain through M&A? Is it facilities? Is it reserves? Is it technology? What type of things would you be looking for?
The main thing we're looking for, take the rare earth is what we call pounds in the ground, it's really tonnes of monazite in the ground. And the main thing there is that if you look at the heavy [ merrill ] sand business even a few years ago, monocyte was just a waste stream and wasn't counted to attribute any value into those operations at all. It was even a negative value. And so we're trying to secure as many of our own sources of monocyte as we can and at least a few jurisdictions so that we basically own what we bring into the mill. Now that doesn't mean that we're not going to purchase or partner or joint venture in different ways to also bring feed into the mill. But the real key here is to control and have mines that are dedicated to our project going forward because we think ultimately, that will lead to the lowest cost in rare production.
Now on the uranium front, anything that we might look at in terms of M&A on the uranium front, would really be how do we get improved synergies with either other blocks of land close to our projects or other projects close to our projects to get better synergies from a uranium perspective?
[Operator Instructions] Your next question comes from the line of David McAusland.
Okay. I was a shareholder in Minas and also Medallion resources. They both are -- especially lines has been involved in a long time and the processing of monocyte for the rare earth elements. And Medallion was doing a lot of research on various methodologies associated to that process. I do have -- are you using -- I don't even know if I can call it a conventional FX module right now. Or are you still -- and there's only 1 or 3 of my questions possibly. Are you looking at less cost-effective ones -- less cost-intensive ones that are more exotic as far as getting your REE out at a lower cost at the plant level?
We're really looking at proven -- using proven technologies, caustic crack for the extraction of the uranium and the thorium and we're using solvent extraction because we have a long history of using solvent extraction at the White Mason mill. And so we're using sort of traditional approaches to processing of monocyte. Now our main advantage is we have the ability to deal with the radio nucleides, with the tailings facility and recover uranium where others is a bigger problem. So we are focused on existing technologies that are proven, technologies that were...
And I can't give you enough credit for that because, yes, you are already situated to be in the REE business. And I saw this 4 or 5 years ago, and I actually held your stock a little bit then. But of course, your uranium is also going to be possibly extremely more important coming forward here as some of the green energy dreams become not so productive. But -- and rare earths, I mean, they're so important as far as super magnets go. I want to ask, how are you paying -- this Bahia property is huge. Has it produced any material amount of monocyte concentrate to date?
No, no. It's really an exploration project. It was quite well known by a number of the heavy mineral sand producing companies. It's -- yes, so like 60 square miles, but it was well known, but it also has good monocyte grades. And the monocyte grades, historically, were looked as a negative and now they're looked as a positive. And so that's why we secured Bahia as 1 of our acquisitions. And as I said, we're actively looking at securing other acquisitions that are kind of along the lines of Bahia. But certainly, anything that's more advanced than the exploration stages is appreciated.
Right, because you don't want to be politically hosted to maybe an uncapitalistic government, okay, if you do have a very productive mine site in a critical field like Green Energy, right? I mean, Mexico has already nationalized their lithium properties apparently, right? But -- so yes, it would be definitely good to supply. And -- so -- but this property doesn't have not the vanadium, but zirconium like some of the monazite properties do.
Yes. It's a traditional heavy mineral sand deposit with titanium, zirconium.
Okay. And you've done economic analysis as far as what you think it might be to get a concentrate made in Brazil and shipped up to your plant?
We're still working through those pieces and steps. But we have looked at it with consultants previously. We have done some sampling in testing in their early stages. And basically, the people that were helping advise us, thought it was a good project. But yes, you've got to take all the steps to get there. And we're trying to do more in.
I can't give you enough credit for doing this. I mean, you know about Old Molycorp, I guess, has known -- that mine has reopened. So fortunately, we have a little bit of REE production here in the United States. But we need more, we need more. We definitely do. And this is -- this is if our society continues to go forward in an industrial way, we're kind of going backwards right now, in my opinion, and there's all kinds of problems done in the world that are going to affect markets going forward. But no, I -- for some reason, I looked at your stock the other day and I saw this project. I can't give you enough credit for getting involved in this, and I hope it really works out well for you.
So thank you. We hope it works out well as well. And we plan to make it work out.
No, it's a natural fit for what -- for uranium processing because there is frequently a decent amount of uranium or radioactive materials in monocytes when you already deal with those, okay? And I don't know about thorium. I mean there's people have been talking about going to thorium as a nuclear plant fuel for a while, it just doesn't seem to be happening. And I don't know if there's that much story. And then the monocyte down in Brazil. But yes, it looks like -- and I don't know whether -- how well disseminated the monocyte it is and you're going to finding some of that out as a drill, I think -- but hopefully, you'll either find the pockets or they would be well enough disseminated but still rich enough to make this be a good source of monocyte for you, so. You don't have to rely on somebody else who can sell it to somebody else, if it's yours, you control it, so.
Correct. That's the key. It's controlling some of these projects to dedicate them to our requirements and our infrastructure.
Right, right, right. And I wish a lot of luck on the uranium side too. I mean, we haven't built in a nuclear plant here, I don't think, in a long time and there's resistance to that or we all know why. I mean what was in Japan, I mean I put duct tape on my windows 2 days after I heard about what happened there to 1 -- but in any case, if we're going to try to get away from fossil fuels, which ultimately we might have to I'm not a green energy. I'm not a climate changer. I think it's a scan. But for political purposes, political control purposes and taking over of economies. But in any case, we got to keep moving forward and trying to find ways to get more out of the energy we have and it takes a decent amount of energy to make electricity. But if we can use rare earth magnets that you get a lot of more force out of it than conventional electric motors than boom, it's a plus. So anyway, thank you very much.
There are no further questions at this time. I will now hand the call back over to Mr. Chalmers. Please continue. .
Okay. Well, thank you, John. Yes, looking in closing, thank you for your time and your interest in Energy Fuels. As I said, we are a unique story, being able to do all these different things that others cannot do because of the uranium, contain uranium and the radionucleides, low-level radionucleides. And as I said, whether it be the rare earth or the uranium, particularly uranium, we can mix and match between existing inventories and whatnot to build price -- competitive pricing to fit a number of different requirements, and that is in itself very unique, and it's very competitive. So we believe we have a very bright future. I always say that we're going to be aggressive but not reckless. We plan to continue to have a strong balance sheet to put us in the strongest position possible for our new uranium production, our new rare earth production and processing and M&A as and when it is -- it makes sense for our company. So we want to be in a strong position. We want to deliver exceptional results as we go forward in this whole critical mineral area. So thank you very much, and that concludes the conference call.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.