Executive Summary / Key Takeaways

• Energy Fuels Inc. ($UUUU) is rapidly transforming into a leading U.S.-based critical minerals powerhouse, strategically diversifying beyond its core uranium business into rare earth elements (REE) and heavy mineral sands (HMS) to address global supply chain vulnerabilities.
• The company is poised for significant margin expansion in its uranium segment, with the high-grade Pinyon Plain mine driving down production costs to an anticipated $23-$30 per pound by Q1 2026, and expects to produce up to 1.00 million pounds of finished U3O8 in 2025.
• Energy Fuels is making remarkable progress in REE separation, successfully piloting heavy REE oxides like dysprosium (Dy) and terbium (Tb) at its White Mesa Mill, with commercial-scale heavy REE production targeted for Q4 2026, positioning it as a unique non-China supplier.
• Strategic acquisitions of world-class HMS projects, including Toliara in Madagascar and the Donald Project in Australia, are securing a long-term, low-cost monazite feedstock supply for the White Mesa Mill, with Final Investment Decisions (FIDs) for these projects expected as early as 2026.
• A recently closed $700 million convertible senior notes offering significantly bolsters liquidity, with post-quarter working capital approaching $1 billion, providing substantial financial flexibility to fund aggressive growth initiatives and strategic project advancements.

The Dawn of a Multi-Mineral Powerhouse

Energy Fuels Inc. ($UUUU) is rapidly asserting itself as a pivotal player in the global critical minerals landscape, strategically evolving from its foundational U.S. uranium operations into a diversified producer of rare earth elements (REE) and heavy mineral sands (HMS). Established in 1987, the company has a long history in conventional and in-situ recovery (ISR) uranium extraction, leveraging its White Mesa Mill in Utah—the only licensed and operating conventional uranium mill in the United States. This historical expertise and existing infrastructure have become the bedrock for a bold expansion strategy, designed to address mounting global demand for critical materials and reduce reliance on concentrated foreign supply chains, particularly from China.

The company's strategic pivot, initiated in the early 2020s, has transformed it into a "critical minerals hub" capable of producing over ten critical elements. This diversification is not accidental; it is a deliberate design to capitalize on Energy Fuels' unique advantages in skills, infrastructure, permits, and processing capacity. The overarching strategy aims to create a vertically integrated supply chain for critical minerals, from mining to advanced processing, with a strong emphasis on U.S.-based production and allied country sourcing.

Technological Edge: The White Mesa Mill's Unrivaled Capabilities

At the heart of Energy Fuels' diversified strategy is the White Mesa Mill, a unique asset that serves as the central processing hub for both uranium and rare earth elements. The Mill's technological differentiation lies in its dual-processing capability and its solvent extraction (SX) circuit, which was commissioned for under $20 million. This cost-effective development contrasts sharply with some industry pilot plants that cost upwards of $100 million to achieve a fraction of the Mill's capacity.

The Mill's Phase 1 REE separation circuit is capable of processing 8,000 to 10,000 tonnes of monazite per year, yielding 850 to 1,000 tonnes of separated neodymium-praseodymium (NdPr) oxide annually. This commercial-scale production, demonstrated by the 38 tonnes of on-spec NdPr produced in 2024, is now undergoing qualification by non-China metal and magnet manufacturers. A significant technological leap occurred in July 2025 with the successful pilot-scale production of 99.9% purity dysprosium (Dy) oxide, with plans to commence terbium (Tb) oxide piloting in Q4 2025 and samarium (Sm) oxide in Q1 2026. This capability is particularly crucial as Dy, Tb, and Sm are among the heavy rare earths subject to China's export controls, and Energy Fuels possesses the technical know-how to produce six of the seven such controlled elements.

The company plans to construct and commission commercial-scale Dy and Tb separation capacity at the Mill as early as Q4 2026. Looking further ahead, the Phase 2 REE separation facility, for which a feasibility study is expected by the end of 2025, aims to significantly expand capacity to process up to 60,000 tonnes of monazite per year. This expansion would enable the production of up to 6,000 tonnes of NdPr oxide, 275 tonnes of Dy oxide, and 80 tonnes of Tb oxide annually, achieving a scale comparable to major global producers like Lynas Corporation . Crucially, Phase 2 is designed to operate independently from the uranium processing circuits, allowing simultaneous production without operational trade-offs.

Energy Fuels emphasizes monazite as a "structural advantage" due to its superior grades of NdPr and heavy REEs, its nature as a low-cost byproduct of HMS mining, and the inherent uranium credit. The White Mesa Mill remains the only facility in the U.S. capable of processing monazite into both light and heavy REE oxides, a critical differentiator in the quest for a secure, non-China rare earth supply chain.

Uranium Resurgence: Fueling the Future, Powering Margins

Energy Fuels is firmly re-establishing its leadership in U.S. uranium production, with a clear path to significant margin expansion. The company restarted uranium production at its Pinyon Plain, La Sal, and Pandora mines in late 2023, with Pinyon Plain achieving viable commercial production by April 2024. The Pinyon Plain mine, in particular, is proving to be a game-changer, consistently yielding ore grades significantly higher than expected, with April 2025 production averaging 1.64% U3O8 against a reserve average of 0.58% in that zone. This exceptional grade, combined with efficient mining and transportation, is expected to result in mining and transport costs of just $10-$14 per pound of recovered U3O8, leading to a total weighted average cost of goods sold of approximately $23-$30 per pound once processed.

The company's financial performance in the uranium segment is set to improve materially. While the weighted average cost of existing finished U3O8 inventory was approximately $53 per pound as of September 30, 2025, the processing campaign that commenced in Q4 2025, incorporating lower-cost Pinyon Plain ore, is expected to drive this down to the $30-$40 per pound range by Q1 2026. This reduction is anticipated to boost gross margins to 50% or above.

For 2025, Energy Fuels expects to mine between 875,000 and 1.44 million pounds of contained U3O8, supplemented by 160,000 to 200,000 pounds from alternate feed materials and third-party purchases. Total finished U3O8 production is guided at 700,000 to 1.00 million pounds. The company plans to sell 160,000 pounds in Q4 2025 under existing long-term contracts, with 2026 sales projected between 620,000 and 880,000 pounds. By year-end 2025, total uranium inventories (finished and contained in ore) are expected to range from 1.99 million to 2.58 million pounds, providing significant flexibility for opportunistic spot sales as market conditions strengthen. Management has expressed a reluctance to sell uranium below $80 per pound, believing the true replacement cost is north of $100 per pound, underscoring their strategic inventory retention. The company is also advancing other projects like Whirlwind and Nichols Ranch, aiming for a sustained uranium production run-rate of 2 million pounds per year, with potential to expand to 5 million pounds per year in the coming years with further investment.

Rare Earths & Heavy Mineral Sands: Securing the Supply Chain

Energy Fuels' strategic expansion into rare earths and heavy mineral sands is fundamentally about securing a diversified, low-cost feedstock supply for its White Mesa Mill and establishing a robust, non-China critical minerals value chain. A cornerstone of this strategy was the October 2024 acquisition of Base Resources Limited (BASE), which brought the world-class Toliara HMS and REE Project in Madagascar into the company's portfolio. The Toliara Project is widely regarded as one of the best undeveloped heavy mineral sand deposits globally, boasting significant quantities of monazite, ilmenite, rutile, and zircon. This project alone has the potential to generate hundreds of millions of dollars in EBITDA annually for generations, with a current mine life of 38 years and significant expansion potential. Following the acquisition, the Government of Madagascar lifted the project's suspension in November 2024, and Energy Fuels is actively working to formalize fiscal and other terms, with an updated feasibility study expected by year-end 2025 and a Final Investment Decision (FID) targeted for early 2026.

Complementing Toliara is the Donald REE and HMS Project in Australia, a joint venture with Astron Corporation Limited (ATR), in which Energy Fuels can earn up to a 49% interest while securing 100% of the monazite output. The Donald Project is shovel-ready, possesses all major regulatory approvals, and is an exceptional source of heavy rare earth oxides, including Dy and Tb. A conditional letter of support for AUD 80 million in senior debt financing from Export Finance Australia (EFA) further de-risks its development, with an FID anticipated as early as Q1 2026 and potential monazite deliveries by late 2027. The company also owns the Bahia Project in Brazil, an exploration-stage HMS/REE deposit, with drilling set to restart in Q4 2025 to support a resource estimate in 2026. These projects, alongside feedstock from Chemours (CC), are designed to provide the White Mesa Mill with a diversified, low-cost, and large-scale supply of monazite, critical for achieving the planned Phase 2 REE processing capacity.

Beyond REEs, Energy Fuels is also exploring the recovery of radium-226 and radium-228 from its uranium process streams for targeted alpha therapy (TAT) cancer treatments, addressing a global shortage of these critical medical isotopes.

Competitive Positioning: A Differentiated Path to Leadership

Energy Fuels occupies a unique and increasingly strategic position within the critical minerals sector, particularly when compared to its direct and indirect competitors. In the uranium space, while major global players like Cameco Corporation (CCJ) boast larger scale and a more diversified international footprint, Energy Fuels distinguishes itself with its U.S.-centric operations and the White Mesa Mill's unparalleled flexibility. This domestic focus offers a distinct advantage in terms of regulatory expertise and a more secure supply chain, appealing to U.S. utilities prioritizing energy independence. Compared to U.S.-focused peers like Uranium Energy Corp (UEC) and exploration-heavy Denison Mines (DNN), Energy Fuels' integrated approach—combining mining, milling, and diversified feedstock options—provides greater operational control and potentially faster production cycles for ready assets.

In the rare earths market, Energy Fuels is emerging as a critical non-China alternative. While MP Materials (MP) and Lynas Corporation (LYC) are significant players, Energy Fuels' unique ability to process monazite in the U.S. and handle its associated radionuclides sets it apart. The company's focus on monazite, a superior REE mineral with high concentrations of magnet REEs (NdPr, Dy, Tb), provides a low-cost byproduct feedstock from its HMS projects, giving it a significant competitive edge. The market is already reflecting this differentiation, with Benchmark Mineral Intelligence reporting European prices for Dy and Tb significantly higher (276% and 264% respectively) than Chinese prices, indicating a strong appetite for non-China sourced materials. Energy Fuels' planned Phase 2 REE capacity, comparable to Lynas's scale, further solidifies its position as a major global contender outside of China.

The company's strategy directly responds to China's dominance, which controls nearly 70% of global rare earth mining and 90% of processing, and its increasing use of export controls as a geopolitical tool. By building a robust, integrated supply chain from allied sources to U.S. processing, Energy Fuels aims to mitigate these risks for Western industries. Indirect competition from alternative energy sources like solar and wind, or advanced nuclear technologies, could impact long-term uranium demand. However, the surging demand for electricity from power-hungry AI and data centers is creating a new impetus for reliable baseload power, positioning nuclear energy favorably. Energy Fuels' diversified portfolio, encompassing uranium, REEs, and HMS, provides a hedge against volatility in any single commodity market, offering a more resilient investment thesis than single-product competitors.

Financial Strength and Strategic Funding

Energy Fuels has demonstrated a commitment to maintaining a robust financial position to underpin its ambitious growth strategy. While the company reported a net loss of $65.17 million for the nine months ended September 30, 2025, and a $48 million net loss for the full year 2024, these figures are largely attributable to significant investments in project development, transaction costs from strategic acquisitions, and a deliberate decision to withhold uranium sales during periods of weak spot prices. For instance, the 2024 net loss was influenced by over $10 million in one-off transaction costs related to the Base Resources acquisition and the Donald JV formation.

Despite these losses, the company's liquidity remains exceptionally strong. As of September 30, 2025, Energy Fuels reported working capital of $298.47 million, including $93.96 million in cash and cash equivalents and $141.30 million in marketable securities.

A significant post-quarter event was the closing of an upsized $700 million aggregate principal amount of 0.75% Convertible Senior Notes due 2031 in October 2025. This offering, which included a capped call transaction boosting the effective conversion price to $30.70 per share, is expected to increase the company's working capital to nearly $1 billion, providing substantial financial flexibility. The net proceeds from these notes are earmarked for critical REE initiatives, including the Phase 2 expansion at the White Mesa Mill and the Donald Project, as well as general corporate purposes. The company also utilized its At-the-Market (ATM) program, raising $60 million in cash from early 2024 through February 2025 to advance its Tier 1 mineral assets. Energy Fuels maintains a debt-free balance sheet prior to the convertible notes, emphasizing a conservative financial approach to fund its aggressive, yet carefully planned, growth.

Risks and the Road Ahead

While Energy Fuels' strategic vision is compelling, investors should be mindful of inherent risks. Political instability in Madagascar, as observed in October 2025, could impact the Toliara Project's development timelines and the finalization of fiscal terms. The convertible notes introduce risks related to debt servicing, potential dilution from conversions, and counterparty risk associated with capped call transactions. The uranium market, despite recent improvements, remains vulnerable to secondary supplies, excess inventories, and non-market activities by state-owned enterprises. Furthermore, the nascent Targeted Alpha Therapy (TAT) initiatives face technological and market uncertainties, and the commercial viability of radioisotope recovery is not assured.

Conclusion

Energy Fuels Inc. is executing a transformative strategy, evolving into a diversified critical minerals leader uniquely positioned to address the Western world's growing demand for secure and sustainable supply chains. Anchored by the White Mesa Mill's unparalleled processing capabilities for both uranium and monazite-derived rare earths, the company is rapidly scaling its low-cost uranium production and advancing world-class heavy mineral sands projects. The strategic foresight in acquiring and developing assets like Toliara and Donald, coupled with innovative heavy REE separation technology, establishes Energy Fuels as a crucial non-China supplier. With a significantly strengthened balance sheet, the company is well-capitalized to fund its ambitious roadmap, aiming for substantial cash flow generation and a pivotal role in powering the future of energy, defense, and advanced technologies. Investors should recognize Energy Fuels as a long-term play on critical mineral independence, driven by a proven ability to execute and a strategic vision that aligns with global geopolitical and economic imperatives.