Energy Fuels Inc
TSX:EFR
Energy Fuels Inc
Energy Fuels Inc. is a prominent player in the North American energy landscape with its roots deeply embedded in the production of materials vital for clean energy and medical applications. Historically, this Colorado-based company has been primarily focused on uranium extraction, leveraging its robust portfolio of mining and processing facilities across the United States to become the largest producer of uranium in the country. This strategic positioning allows Energy Fuels to capitalize on the persistent demand for nuclear fuel, which is crucial for generating carbon-free electricity on a significant scale. The company operates facilities like the White Mesa Mill, which stands as the only conventional uranium mill in the U.S., uniquely positioning Energy Fuels to not only mine but also process uranium, optimizing its revenue streams and operational efficiency.
In recent years, Energy Fuels has diversified its operations to include rare earth element (REE) extraction, sensing the burgeoning need for these materials in the production of high-tech devices and renewable energy technologies. This transition is exemplified by initiatives to produce rare earth carbonate from its extracted ores, a critical component in manufacturing everything from wind turbines to electric vehicles. Through this diversification, Energy Fuels aims to solidify its role in supporting emerging green technologies while maintaining its stronghold in the nuclear sector. The dual-track approach not only mitigates risks associated with fluctuating uranium markets but also opens up new vistas for revenue generation, anchoring the company's future in the rapidly evolving clean energy economy.
Earnings Calls
Energy Fuels has raised its production guidance for 2025 by 22%, aiming for 875,000 to 1.4 million pounds of uranium, aided by high-grade outputs from its Pinyon Plain mine. Finished goods are expected to soar by 193%, reaching 925,000 to 1.2 million pounds. The company maintains a robust balance sheet with $214 million in liquid assets and no debt. Despite a net loss of $26.3 million this quarter, driven by strategic inventory holding, Energy Fuels is set to capitalize on rising uranium prices, currently around $70, aiming for $80. It is also advancing rare earth projects for potential processing by 2026.
Good morning. My name is Constantine, and I will be your conference operator today. At this time, I would like to welcome everyone to the Energy Fuels First Quarter 2025 Conference Call. [Operator Instructions].
Mr. Chalmers, you may begin your conference.
Thank you, Constantine, and thank you for that introduction. Again, Mark Chalmers, I'm the CEO of Energy Fuels. We are really appreciative of people joining the Q1 2025 conference call today, and it is always a pleasure to update everyone on our remarkable progress on building the largest critical mineral company in the United States. We are also very, very pleased to announce that we've increased our 2025 production and finished goods inventory guidance by 22% and 193%, respectively. And that is quite unusual because many companies are actually going the other direction at this point in time. So we're really excited about upgrading the guidance.
We also are happy to report that we have very strong working capital position of $214 million. We continue to advance our high-grade and low-cost U.S. uranium production, including a record production in April, that was after the quarter of 151,000 pounds at an average grade of 1.64%. And I want to point out something that it's 1.64% in a reserve zone in the main zone of 0.58. So the grades that we're currently mining are almost 3x what we had expected in that area. So very excited about that. And we continue to advance our world-class rare earth and heavy mineral sand projects and capabilities and no debt. So there is a lot going on. There will be a conference replay available after the conference call is concluded on the website. And as always, as Constantine mentioned, there will be time for questions at the end.
Today, I'm being joined for questions by Nathan Bennett, our CFO and we will just tag team that as required. So let's get going. And this first slide, I always say I love this slide, but I love this slide. And again, this is taken not far from where the White Mesa Mill is in Utah. Next slide. I may be making some forward-looking statements, and those are covered on Page 2. Next slide. Again, many of you have seen this before, but I think one of the things that people don't understand that Energy Fuels has really got 3 different core businesses. We have this long history in the uranium business, as people know, and that is going remarkably well. We've added on the rare earth elements and the heavy mineral sands. So you're really getting an investment in 3 companies in Energy Fuels and investment in Energy Fuels.
I also want to mention that we have the current capability or will have the capability to commercially recover at least 10 of the critical elements on the list of 50 at the White Mesa Mill, and that is a key differentiator. Next slide. So all of our products are in demand for energy, defense, mobility or health uranium, as I said, long history of doing that. Now we're in large-scale production. The rare earths, we are also the leading producer of NdPr oxide, and we currently have a lot of that product out for validation, and we also have the technology to produce heavy rare earth oxides, which in itself is very, very unique. Heavy mineral sands, again, advancing our world-scale, world-class rare earth titanium, zirconium mineral sands projects globally. Couldn't be more excited about that. And vanadium, we do have a vanadium circuit. We do have vanadium mines.
We're not currently recovering vanadium, even though we are producing it at the La Sal complex as we speak. And lastly, the medical isotopes, we're still forging ahead on the R&D work we have for recovering of radium. Next slide. Now again, if you ask the question, the world is your oyster, well, Energy Fuels can obviously say that we are asset rich. When you look at the assets we have in the United States, certainly, most of them are uranium, the White Mesa mill in that, it's kind of a purpolishly red color where we can do all this processing of these critical elements. And then when you look down in the Southern Hemisphere with the heavy mineral sands projects, the Bahia project, the Donald joint venture, our office in Perth and the world-class world-scale Toliara project, we have an absolutely fantastic pipeline to feed the White Mesa Mill in due course with a number of these critical elements going forward.
Next slide. So this graphic, and we do this graphic to show where the processing of these critical elements actually happen. So certainly, the uranium is mined in the region and processed through the White Mesa mill, and it comes out the back end as U308 or vanadium or at the same time or when we flip the mill over, we can process the rare earths and the rare earths, mainly the monazite and the xenotime can also be processed in the rare earth processing facility, which is the White Mesa Mill and outcomes the rare earths on the back end. The heavy mineral sands don't have to go through the mill, but they're also critical elements, but they also are recognized as such, and that's how we get a list of 10-plus. The rare earths, there are other elements that can be extracted if there's an economic reason to do so.
Now our Phase 2 plant that we're currently doing engineering work and feasibility work on will actually separate that rare earth processing step in the White Mesa Mill into 2 separate processing facilities. Next slide. Again, we continue to grow our portfolio of uranium sales contracts. We have 4 contracts with 3 nuclear utilities deliveries between 2025 and 2030. In 2025, we only have about 220,000 pounds of deliveries, and we have yet to fill those deliveries. We also have entered into an agreement to purchase third-party uranium ore from a company that is not too far from the mill. So our contracts are really light in 2025, and they ramp up to around 800,000 or 900,000 pounds in 2026, but they are all concluded in 2030 on the current contracts that we have.
Next slide. So let's talk more about the uranium highlights. I want to emphasize that some people get confused with what we mine, what we process, the alternate feeds and how that all fits together. So towards the end of this presentation, I have a table that I think simplifies that significantly. So when you look at the conventional mines, in Q1, we mined 115,000 pounds of unprocessed uranium. So it's uranium ore, and that was from Pinyon Plain and La Sal and the Pandora mines, and that's now being stockpiled at the mill. Now when you talk about how much we plan to mine in 2025, we've upgraded this guidance. We're looking at mining between 875,000 pounds to 1.4 million pounds of uranium, and we can process that as we select to do at the mill in due course.
We are still working forward to increase our production up to about the 2 million pounds per year, subject to market conditions. But we're certainly making significant steps that direction as we speak. Now when you look at what's processed at the White Mesa Mill, for Q1, we processed 150,000 pounds of finished goods. We're now saying that this year, our guidance for finished goods processed at the mill is 700,000 to 1 million pounds, and at the same time, we have the optionality to build up inventory, and I'll go into more detail at the end to sell the uranium when the markets support that. We have taken a position to not sell uranium at $63, $64, $65 per pound, and that's a good thing because we actually bought uranium at that price range, and we now have uranium price is about $70 a pound. So just in the last month or 2, the price of uranium or at least on the spot price has gone up by 10%.
Next slide. So again, the White Mesa Mill and the remarkable facility that it is with both the capability to produce uranium and rare earths and never has it been more important to have a White Mesa mill as the only operating conventional mill in the United States. It is the largest uranium processing facility in the United States. It's fully licensed, permitted, producing and has employees there. It has a license capacity of 8 million pounds per year. It has the ability to process and recycle uranium-bearing alternate feeds at very low cost 40 years of operational experience, and we also have the opportunity to assist the U.S. government and the Navajo Nation on cleanup of abandoned uranium mines on the reservation that had no connection to our company, and we're really looking forward to helping the Navajo Nation on that front, hopefully, this year.
And it is the only facility that can process monazite for production of rare earth oxides in the United States. Next slide. So again, you've seen this slide, but it's been modified a little bit, but the current ore is coming out of the Pinyon Plain mine and highest grade uranium mine in the history of the United States, and that ore is now being shipped across the Navajo nation with our agreement. The La Sal Complex is really a complex of several mines. It's about 11 miles of trend. Ore is also being transported to the mill from the La Sal Complex. And we're also looking at refurbishing a couple of other mines on the La Sal Complex. So the combination of those 2 projects, we plan to mine between about 55,000 tons to 80,000 tons in 2025. We're still doing drilling at Nichols Ranch, our ISR operation in Wyoming, and we'll restart that when the market supports.
Next slide. Now this is an exciting slide here because Pinyon Plain is starting to hit on all cylinders, and we're currently mining the main ore body zone. I already mentioned that in April, we had record production of 151,000 pounds at 1.64%. And I mentioned that the average grade in that zone was about 0.58, 0.59, and we're mining about 1.6. So we are getting extraordinary grades there, and we think that will equate to a larger resource reserve mined because of these extraordinary grades that we're hitting. In addition, many of you would have seen that we announced exploration results on the Juniper ore zone. And the Juniper ore zone is just below that main zone, but it's only 200 feet. It's 200 feet away. And so it's very close. But look at those grades, 13 feet of 7%, 7.5 feet at 7.5%, 9.3 feet at 2%, 17.5 feet of 5.7, including 4 feet of 20%. These are grades that are unheard of in the United States.
And I couldn't be happier to be reporting the success that we're having, and there will be additional drilling happening in the Juniper zone. There's still a lot of runway to continue to add, but we're going to have to drill because you can fit a lot of uranium in a very small area with those types of grades. Next slide. So this will be a bit of an experiment, but we want to take you down into the Pinyon plain ore body, and we're going to try to show you a video. So let's take a look at the video now. [Presentation] Again just to give people an insight of the mining and again, I highlight that the grades have been averaging mined in that 1% to 2% range. When you put that in perspective, I mean, that's like 2 to 4 ounces per ton gold. So this is really high-grade, high-value product that we're getting out of the Pinyon Plain mine.
So let's talk a little bit more about some of the development pipeline. Again, you've seen this slide where we have the Sheep Mountain project in Wyoming, which is fully permitted. And we also have the Henry Mountain project in Utah, Bullfrog, which is in pre-permitting. But also, I'm very pleased to announce that our large Roca Honda project in New Mexico, which is also underground and high grade, but it's about 0.5%, so it's still a high-grade mine by uranium standards, but a very significant project, but it was also selected by the Trump administration on this FAST-41 covered project. So it's been recognized as a national security critical mineral project, and we're really excited to get that designation on one of our projects and our pipeline projects.
So we've been advancing the feasibility study on that for -- or actually, it's the EIS on that. And we think now is an ideal time to get that wrapped up in advance. So we have another significant permitted project. Next slide. So we'll shift gears a bit and go around the world here, talk a little bit about the rare earth production and assets that we have in heavy mineral sands. Next slide. We haven't left the country yet, but just some pictures of the solvent extraction circuit for extraction of the rare earth oxides at the White Mesa mill. And again, this is a facility that the team at White Mesa built on their own without consultants, without people advising them. They came up with the designs for this, and they built a very significant solvent extraction facility and commissioned it for under $20 million.
I know there's companies out there that have pilot plants that are $100 million and do just a fraction of what this will do. I mean some of these pilot plants that are pushing $100 million will do like 1 ton of NdPr per month. And this project, when it has enough feed, we'll be doing like 70 or 80 tons a month. and we built it for $20 million. Also look at the bags of NdPr oxide and bulky bags. It's not in a beaker, and we're doing it at commercial scale. Next slide. Again, we continue to focus on integration as we step down to the supply chain there with the mining beneficiation, crack, leach separation, and we are still very keen to advance into the metal making and alloy steps. And I've always mentioned Deb Bennethum is working for us, from General Motors, she came to work for us, and she's helping us with that back end, and she's been a great, great addition to our team to help us on that back end.
Again, we'll collect the monazite from these multiple projects, including material from Chemours. So we have diversified supply and feed to the White Mesa Mill globally at scales equivalent to Lynas in due course. Next slide. So also recent news. Certainly, in March, we signed a collaboration agreement with POSCO International in South Korea on a collaboration on providing them with feed materials. We also signed a strategic alliance with Chemours in March, also collaborating on bolstering U.S. critical mineral supply chains. And then in April, we made the announcement that we have the technical capability and skills to produce 6 of the 7 heavy rare earths subject to current China export controls.
Next slide. We'll talk a bit about financials. Next slide. So again, at the end of the quarter, March 31, we continue and are producing low-cost uranium. We're developing this Tier 1 critical mineral and heavy mineral sand assets, and we're maintaining our strong balance sheet, excellent liquidity with over $210 million of liquidity at the end of the quarter, made up of cash, marketable securities, interest-bearing securities, very liquid, $20 million of trade and other receivables and about $35 million of inventory. At current prices, you can actually increase the value of those inventories by about $12 million. At the end of the quarter, we had nearly 600,000 pounds of finished uranium. We continue to add to that. We still have vanadium inventory. We still have some rare earth inventory, and we have 0 debt.
Now the net loss for Q1 of '25 was driven on a very aggressive program of advancing all these projects and also electing not to sell uranium at current prices. As I mentioned, in the first quarter, the uranium prices were languishing spot between $63 and $65. Now they're about $70. And so by holding on to that uranium, that value of that product at spot is 10% higher. And we really still don't have a lot of interest in selling uranium at $70 a pound. The last uranium we sold on the spot was $80 a pound. And that is our goal to get back with an 8 handle on it going forward. We did sell the residual heavy mineral sand products from Kwale, ilmenite, rutile, zircon for about $15.5 million, and we did have a net loss of $26.3 million, about $0.13 per share because other than the sales of the -- largely of the heavy mineral sand products, we didn't try to generate any additional revenue.
Next slide. So again, talking a bit more about the quarter. We're actively mining uranium, as I talked. We're actively processing uranium ores. We're opportunistically buying uranium on the spot market. We bought some for 64, 75, about 50,000 pounds. We'll continue to look at when that makes sense or not. We did enter into that purchase agreement for third-party ore with another party not too far from the mill. We're still increasing our ramp-up to that 2 million pounds of uranium production with existing assets, and we're also advancing these other large-scale uranium projects, which can increase our production up to about that 4 million to 6 million pounds with additional permits and investment. And we're continuing to do the R&D recovery on radium.
Next slide. So again, I think people have struggled to understand how the mining and the processing and the alternate feeds all fit together. So if you look at that top line, which is mined and you look at what was our previous guidance and our revised guidance, it's up from the midpoint of 22%. And again, most people are going down. So if you look at that, that's mine product. And then if you go to the next line, alternate feed. And for example, in our guidance, it hasn't changed for the alternate feed, but 160,000 to 200,000 pounds, that is about 20% of our feed for the White Mesa Mill, and that is a beautiful sweetener in our production profile. So then go down to the third line with the processed pounds, we're saying 700,000 to 1 million pounds, up 278%.
And one of the reasons it's up so big is we are actually looking at not processing some of that ore because of some of the work we are doing on the radium front. So we decided to process some of our uranium feeds, and that's why it jumped. Contract sales, very light for 2025 at around 220,000 pounds. That's down a little bit. That doesn't really upset me because I'm still looking for these higher uranium prices in due course. Finished goods, we plan to have between 925,000 and 1.2 million by the end of the year. That's up 193%. So we're going to have a lot of finished goods. But look at those inventories because not only can we select the time we want to process that ore, we can also store it in stockpile and process it later. We do not have to spend that money if we have it sitting at the mill in inventory.
So we plan to have between about 2 million and 2.5 million pounds of inventory or to-be processed inventory, which is up about 14%. Now some people might say, “What does it cost to process the unprocessed inventories?†And it varies. I mean it can vary between $15 to $20 a pound. Sometimes it can be $10 a pound, sometimes it can be $35 or maybe up to $40, but it is very easy and low cost for us to process that inventory. When we want to put it into the market, we can do it quite quickly. Now having these significant inventories is also putting us in a great position that we can flip the mill back and process rare earths, potentially early in 2026 by having enough inventory to meet our contractual agreements and also having material to put out on the spot market if we elect to do so.
Next slide. We talk about the rare earths and sort of the titanium zirconium products. As I said just a minute ago, we may go back into rare earth production in 2026. We're building up inventories of monazite as we speak. We're advancing the Phase 2 expansion at the White Mesa Mill. This is a separate plant, separate from the uranium mill with a capacity of up to 6,000 tons of NdPr per year, equivalent of Lynas. And also recovering about 225 metric tons of Dy and 75 metric tons of Tb per year. And that update will also come up with updated capital and operating costs for that. We are currently piloting Dy and Tb. And when we talked about that we had these capabilities to separate additional rare earths, including these heavy rare earths, we can do that.
So again, remarkable capabilities at the White Mesa Mill. Toliara project is moving towards FID. It should be expected in the first half of 2026. We're continuing to starting to look at pursuing potential offtake sales and financing options. We're also pursuing final agreements to enshrine an agreed fiscal terms on Toliara with the Madagascar government, and we're really excited about that to keep pushing that along. The Madagascar government wants this project. We want this project, and it is an important project for the United States of America on securing world-scale critical minerals.
When you look at our scale of our project of our goals as we move this forward, we can produce between 50% to 100% of 10 critical elements for the current demand of the United States of America. So it is absolutely significant. The Donald project is also moving forward with FID. We're continuing with drilling on the Bahia project in Brazil, and we're continuing to develop our final comprehensive project finance strategy.
That's it. Any questions?
[Operator Instructions] Your first question comes from the line of Katie Lachapelle from Canaccord Genuity.
It's great to see the increase in expected uranium production for 2025. I do, however, want to focus a bit on the rare earth segment. So we've seen your balance sheet improve quarter-over-quarter with some activity on the ATM. But on our numbers, we're still seeing a pretty significant gap between the projected capital cost and your current balance sheet. So how are you thinking about the potential funding stack for the Phase 2 expansion at White Mesa in addition to advancing Toliara and Donald?
Katie, as I said at the end, we're putting together a comprehensive financing strategy. We've already got some debt advisers on Toliara and Donald. We're looking at adding a significant U.S. bank to help us with that. In addition, we're making the rounds across D.C. with places like the DOD, XM Bank, DOE and all that. And as I said, we're looking at potential offtakes, there could be potential people willing to fund in some of these projects. So Katie, it's really going to be from a number of sources. Our strong balance sheet allows us to advance all these projects through this FID process to get all the accurate numbers and estimates for bankable purposes. But I do believe that when you look at the scale and the low-cost nature of what our plan and strategy is when I talk about 50% to 100% of U.S. requirements, we will secure funding.
Now it doesn't mean it's going to be easy and it's complicated, but we plan to have that strong balance sheet, get to these FIDs, and we're multitasking on a number of fronts when it comes to how we're going to finance these projects. I want to point out too, one thing, the Toliara project is so remarkable that it funds itself -- it doesn't fund itself, but it can stand alone as a heavy mineral sand project only without any credits for the rare earth. So it's a really significant project, really low-cost structures, but we still have a lot of work to do.
And then maybe just one unrelated follow-up. You didn't make any uranium sales in the quarter. So 2 questions. Can you provide us with a level that would trigger you to make some additional sales into the spot market this year? And then on the cost side, there were no reported costs for this quarter. So how are your costs tracking right now? And how do you expect them to track through the remainder of this year?
As I said earlier, I really don't like to sell uranium at these prices because I think it's below the cost of replacement. But I'd like to see something with an 8 handle on it or greater. When you look at our costs for the quarter, we're really just ramping up some of the mining. We had the delays with the ore transport across the Navajo Nation. But our most recent estimates are that the combined cost going forward and for the year are going to be between about $35 and $40 per pound, Katie.
Your next question comes from the line of Heiko Ihle from H.C. Wainwright.
Mark, it's actually [indiscernible] on behalf of Heiko. Just a quick question on Pinyon Plain. It seems like things are going pretty well. Could you maybe give us any color on if there's been any unforeseen supply chain issues throughout the process? And have any idea of how much money you plan to spend at site during Q2?
Well, look, there haven't been any issues at the site since we signed the agreement with Navajo Nation. One of the issues has been just getting the trucks pooled up to haul the ore to the mill, which we're working to resolve. We indicated that for Q2, we already had this 150,000 pounds mined, and that's continuing on. I mean we got text from the mine this morning. It's actually going higher than that. So as I said to Katie, homogenized basis, we're looking at that $35 to $40 a pound. The mine is largely developed. So a lot of the expenditures there are just focused on producing ore and shipping it to the mill.
I guess to touch on the earlier question, we like seeing you buy uranium below $65 a pound and with a great cash balance. Do you anticipate converting any more cash in the inventory Q2 and beyond? And is there possibly a mental maximum price for doing so?
I wish I bought more at $64. But yes, we're going to just play it by year. I mean, well, if we're giving you our going forward cost at $35 to $40, that gives you an idea of what we can put it in a drum finished goods. But again, we're going to always look at mix and match. And if we think we can pick up some product at a price that we can turn around and sell, we'll consider that.
Your next question comes from the line of Justin Chan from SCP Resource Finance.
My first one is regarding -- just reading through your 10-Q, you noted that part of the logic for bringing forward uranium processing is you're thinking of doing a rare earth processing campaign next year or freeing up the mill for circuit changes. I was wondering if you could just give us some more color on what your current thoughts are for next year on the rare earth side of things? And what are the key moving parts?
Exactly. As I said, if we have this inventory, we can elect on how to process uranium or rare earths. So our thoughts is to go ahead and build up our inventory, which we can do very quickly with the product out there to process, have this other inventory that we can process later with the switchover of the mill if we need to. And then looking at in 2026, we're still getting material from Chemours, but we're also looking at other sources of feed of monazite. And right now, we're getting a lot of inbounds from the U.S. government saying, “What can you produce rare earths now? Why can you produce now?†And you know what, we're the only ones that can produce now if we want to.
And in addition to our ability to also do these heavy rare earths, we're trying to position ourselves so we can show that we have this incredible flexibility, that this flexibility allows us to be and produce whatever they may need. And if they need a samarium or whatever, we can actually do that. We can't just wiggle our nose and do it, but give us a few months or 6 months and some support, and we have remarkable flexibility on that. So Justin, this gives us that opening to be able to do either. I mean if we decide we want to keep producing uranium, we'll do it. If we want to switch over to rare earths, we'll do it.
So maybe just reading between the lines, probably the key determinant right now is perhaps some signal from the government absent a huge price issuance or NdPr or something like that?
Yes. I think that's correct. I mean if we get a signal from the government, we want to say we're going to deliver in the United States, in Utah.
And on Toliara, could you give us an update on how things are going in country? And what the next 12 months looks like between now and FID in terms of -- so we can track progress over the next 4 quarters?
Look, I've got Tim Carstens here. Tim, calling you on the spot here. He's here. I might go bring him in.
So it's sort of 3 key focuses at the moment at Toliara. One is, as Mark mentioned earlier, it's finalizing the agreements to lock in the fiscal terms with government, and that's all making good progress. The government is amending its large mine investment regime at the moment in good consultation with us. So I'm comfortable with the direction that's taking. On ground, we're doing a lot of work with governments on community, I won't say sensitization, but more just sort of making sure that we've got full community on site. We've got the various engagement and dialogue structures in place, tripartite dialogue structures between ourselves, government and communities to make sure any issues are addressed adequately that we avoid the influence of the opponents of the project that aren't really motivated around the project. But as you know, from the past, have attempted to use the project as, I guess, a football for their own objectives.
So we've been working really closely with the government in managing that. Got a really good position on that now. And on-ground work is now starting to happen as we head towards FID. So that being one of the challenges we've experienced over the last 5 years is well in hand now. On the project side, there's quite a lot of work that needs to be done over the next 12 months or so as we head towards the FID, quite a bit of geotechnical drilling that needs to be done, particularly in relation to the bridge and the port facility. They're kind of long lead time items for that.
We're busily building the team at the moment. As you know, our approach is to bring on a lot of the operational people early and embed them in the project. So people like our GM operations are already in place, and they're starting to assemble their team to sort of drive our input in project execution. So that's coming together quite well. Quite a significant spend over the next 12 months, as you would expect for a project of this scale. So yes, at this stage, we're well on track for an FID, as Mark said, in the first half of next year.
Is there a plan to put out updated CapEx and, I guess, high-level economics? And roughly when along that time line do you think that would be?
Yes. We're in the process of completing that now. The intent is to release a full updated DFS in -- I think it's due in June, maybe early July, which will form the basis of the next phase of execution of the project. So that will get released to the market with a full update. And also the basis of the debt funding, so that will become the debt funding model.
That's June, early July this year, like in a couple of months?
Yes, a couple of months. So we're in the final stages of that now.
Your next question comes from the line of Zack Perry from Robertson Stephens.
Quick question on the rare earth side. At scale and how you define that, what is your cost structure relative to other projects around the world? Obviously, if you have the feedstock and you look at the future, what would you be your cost structure, not just in the United States, but relative to other projects around the world?
Look, we're finishing all of our studies. But at scale, we believe if we're not the lowest cost, we're going to be the second lowest cost in the world is what we believe. Now how China fits in, but certainly, outside of China, we're going to be a low-cost producer, and we will be producing in the United States. And a lot of that is driven on the fact that the contribution of these various projects, particularly Toliara with the scale of Toliara and the low-cost structures at Toliara is going to provide us with a supply of monazite significant, about half of the mill's capacity -- and it could be more in due course if we want to upgrade it effectively for free. So that's a pretty good start, Zack.
So it sounds like you're very low costs without Toliara and you basically get almost free feedstock, assuming Toliara is profitable on heavy mineral sands on it. Is that a way to think about it?
Yes. It becomes an accounting exercise of how you want to account for it. But yes, no, these pieces, as you said, at scale and that's a big part is at scale because, I mean, Phase 1 at the mill is about 1,000 tons of NdPr per year. The expanded Phase 2 is 6x that. So that makes a difference in terms of the fixed variable cost in terms of how you go forward. Just coming back to your point about the free monazite. I mean, Toliara just as a mineral sand project, so completely excluding any monazite revenue, in terms of revenue to cash cost ratio, it's about 4:1 revenue to cash cost. It's pretty much the most profitable mineral sand operation or will be profitable mineral sand operation in the world, excluding monazite. So that's one of the real strengths of that as a project and how it contributes to a relatively low-risk way for Energy Fuels to develop rare earth capability relative to anybody else because you've just got that protection.
So with that, assuming the U.S. government wakes up and if they're going to get in a trade war with China would want to get your product up and running, how quickly could you get a separate REE line up and running, assuming if the government showed up and said do it tomorrow? What's the time frame to actually get up and running if you have full funding and everything?
Well, Phase 1, a couple of months. That will do with NdPr. And we're currently piloting the Dy and Tb. We've been telling the government that some of these specialty products, if they want 1 or 2 or 3, it probably take us 6 to 12 months. But we are looking at like a Phase 1b, which is the addition of other circuits to recover some of these other products if the government wants them, that we can provide them with a custom-built solution for that. When it comes to the Phase 2 mill, we've been talking about our Phase 2 rare earth plant of having it up and running in 2028. And that's where it is on the current scale. But it isn't impossible to think that the government might not want to fast track that.
But we also have to make sure that, that ties in with the mines and when these mines are up and producing. So there's a little bit of a juggling. One thing that's interesting is there are sources of monazite out there in the world that people are looking at sending to us because they believe it makes a lot of sense for them to send it to White Mesa. So we're still exploring some of those options and opportunities so that we have larger run of rare earths and being able to, again, process the rare earths at the mill or the uranium and being flexible. So yes, we're just keeping our options open on how we go, Zack. But there's a number of pieces to this that we can orchestrate as required.
Your next question comes from the line of Noel Parks from Tuohy Brothers Investment Research.
So I just wanted to check back on the Navajo Nation cleanup. So the process of unlocking the dedicated funds for that, is that something that would involve any financial commitment from Energy Fuels on capital or operating side? And if so, just wondering about the scale of it. Is it just a few thousand in G&A or something larger?
The agreement that we did with Pinyon Plain, we agreed to 10,000 tons. We'd haul it and take it for free with the option that can be expanded later on. There really is no capital investment required. But last I checked, there was about $2 billion in trust for the Navajo Nation to clean those sites up. And so one of our goals working with the Navajo Nation, we put out this offer for the free material so that they can be comfortable and see how it actually works. And so there's no cost to us. We can take it right now. And we'll probably start taking some of that material, that 10,000 tons this year. It's really about them deciding which site would they like us to take it from. Again, that material contains uranium. We can process it. We get free feed.
Well, the initial 10,000 tons, we're hauling it to the mill. So there's a number of different ways this can roll out. We have had with the new administration discussions with the EPA and the Bureau of Indian Affairs and the Navajo Nation. And they are keen about working with Energy Fuels, keen because they know we can do it right now, like a lot of things right now. And there's not been a lot of action on the Navajo Nation on this cleanup. And this is just a perfect way that we can work with the Navajo Nation with this ore haulage contract. They can see how the ore is hauled across the Navajo Nation. And also, they can see the good we can do helping them with some of these cleanups that have been stagnant for 50 years.
And talking about the potential catalyst of the government deciding it does want to move forward with some of the minerals that you could produce. Do you have any sense of the interaction when it comes to looking for, I guess, funding overall for the various projects in the company? Because I think of government financing, good terms, but tends to move slow. Is it possible that there could be like a larger package that could help with White Mesa, help with the critical minerals there, help with Toliara? Or do I really need to think of them as just sort of entirely separate thrusts?
We're actively talking to the U.S. government on every front right now, multiple groups. And we're making proposals to the U.S. government on multiple fronts. They can be large or they can be small. We want to tap into whatever makes sense. But you're right, a lot of the government funding takes time and is slow. So you've got to look at the balance between commercial options, government options, how those fit together, how prescriptive they are in getting those funds. There's a number of different variables. But no, we're actively working with the U.S. government and providing them options just as I've discussed in this presentation. And if it makes sense, we're there to deliver.
[Operator Instructions] Your next question comes from the line of Richard White, private investor.
You mentioned you have an ore purchase contract with a third party in the region of the White Mesa Mill. I was wondering, do you have or are you anticipating a buying schedule for the other small miners in the region who could get into production?
Well, it's no secret that Western has put out a press release that we're buying their ore. What we find and you can appreciate this, that going back 20, 30, 40 years, there were a lot of mines that could feed into a buying schedule. And now there aren't that many, okay? So we've taken an approach that if somebody has a mine that's fully permitted in compliance, just come visit us and see what they've got. We want to know the quantities and the grade, and we'll just work out a special arrangement if it makes sense to us to go forward. So to put out a blanket buying schedule, there's so few people, it's too difficult because the variables like the grade and even the metallurgy in some cases, is it uranium, vanadium ore or what is it? But yes, if somebody has a mine, I would say, give us a ring, give Curtis a ring, and we'll see what can be worked out or not.
There are no further questions at this time.
I'd like to turn the call over to Mr. Mark Chalmers for closing comments. Sir, please go ahead.
Well, again, thank you, everyone, who joined this call or listens to the replays in the next few days. It's an exciting time for Energy Fuels. These pieces are starting to come together on multiple fronts. But I also want to say that some people have questioned our conviction to the uranium business. And I think that the numbers that are starting to come out with our uranium production and the scale and the cost show that we're not out of the uranium business. We still have a lot of work to do.
Pinyon Plain Mine, which I built in 1987, took 38 years to go from when I built it to getting the ore to the pad at White Mesa is really paying dividends. And as I said, I think it's the highest grade uranium project I've seen in my career. Dick, if you're still listening, I know we worked at the Schwartzwalder, which was had some high grades, too, but not at this kind of scale. So yes, it's an exciting time, and we're pulling it together. I think we couldn't be in a better place with the critical mass we have. We're not a pretender. We're out there to deliver an outcome that's extraordinary. Thank you.
Thank you for participating in the Energy Fuels conference call. Please reach out to the company directly for any additional investment questions. This concludes today's conference call. You may now disconnect.