Q4 2020 Energy Fuels Inc Earnings Call
Good afternoon. My name is on us and I'll be your conference operator today.
And as John I would like to welcome everyone to the energy fuels Q4 at year end 2020 conference call.
All lines have been placed on mute to prevent any background noise.
After the speakers remarks, there will be a question and answer session.
Like to ask a question there and this giant.
Please go ahead, Scott and then number one on your telephone keypad and she would like to withdraw your question. Please price John <unk>. Thank you. Mr. <unk> you may begin your conference.
Thank you Ed.
Good afternoon, everybody. Thank you for joining the Q4 2020 conference call.
And webcast today.
We're very excited to talk about our achievements in 2020 as well as some significant achievements we have made thus far in 2021.
For those of you that cannot join the call today, there will be replace of this presentation. It will be available on our website.
Alright.
And two weeks starting either later today or tomorrow.
We continue to make phenomenal progress on many fronts and.
And we believe energy fuels has emerged as the clear leader of U S critical mineral production.
I'm sure many of you have.
And following our story over a course of a number of years.
And you know that our core business is uranium and we.
We remain the number one uranium producer in the United States in 2020.
We have more uranium production capacity production facilities and resources and experienced and any.
Any other U S uranium producer.
However, in 2020, we announced our entry into the <unk> space, which is a significant complement to our core uranium business.
And we've made incredible progress and chests and single year actually it hasnt, even been a full year it's.
And just a little over 11 months.
Next week, we plan to start feeding about 300 tons of monocyte sands into the White Mesa mill and produced a mixed rare earth carbonate.
Assuming we're successful no other U S company will be producing a rare earth.
Product this far down the supply chain and we're very very proud of that and hopefully our shareholders are as well.
We will continue to build on our relationships with groups like <unk>, Neil and other leaders and the <unk> space.
Energy fuels.
And initially working with each group to build full integration both on the U S and Europe.
And our supply chain and we think we've done that very very.
Strategically and effectively.
However, in the coming years, we plan to develop full integration.
And the U S at the White Mesa Mill, and Utah, providing low cost, both capex and Opex, which we believe will be very attractive.
For responsibly sourced, whereas production to U S users, including those and other parts of the world, including Europe.
In addition, uranium and vanadium prices continue to inch up.
Creasing the value of our significant U S produced inventories and I'd like to.
Emphasized U S produced at our facilities.
And finally, we believe people are finally, recognizing the.
Value and the importance of our industry, leading recycling programs, which further adds to our environmental and corporate responsibility story.
Before I begin I just want to remind everyone that you are controlling to slides to the presentation today from your device and I'll try to remember.
Remember to tell you when to advance to the next slide.
At the end of the presentation, we will open it up for questions on the presentation and both day Friedland, our CFO and general Counsel and Curtis Moore, our VP of marketing and corporate development will join me with.
With the answers.
So, let's just jump in and I'd like to start off by saying mix slight.
So on my slides, we will advance.
Thanks.
And I may be making some forward looking statements.
So.
And those are included at the back of the presentation.
Now I just want to cover the business case and the key highlights of.
Energy fuels core business.
Strategy as I mentioned before we are first and foremost our core business is uranium and I talked about that we have more.
Our assets and resources to respond quicker faster to provide carbon free energy for nuclear power.
The rare Earth element.
And that we entered just a little over a year or close to a year ago, we announced in March.
And that we had.
<unk> launched a.
Full integrated supply chain.
For both your U S and Europe supply in 2021, with Neil and we're very excited about that and the market responded to that very well.
Vanadium.
And we were the largest producer of vanadium and 2019, we still have of vanadium circuit.
Based on a mill and vanadium is used for high strength alloys, and it's getting increasing interest and get grid scale batteries, particularly with renewable battery systems.
And the recycling, which I mentioned, which we're very proud of of the world class industry, leading recycling of both uranium.
And vanadium that we've done for a number of decades.
And then lastly, we're always proud of our financial strength and the fact that we have zero debt and we have.
And very strong cash securities and inventory position.
<unk> currently of around $80 million.
And with a significant portion of that being.
And uranium and vanadium.
We're proud of what we do and we're proud of what we produce.
Particularly with the numerous.
Clean energy and advanced technologies that can be advanced with the elements that we produce and the uranium certainly for clean.
Clean Baseload energy, which provides about 55%.
U S electricity there.
Earth switches and.
Emerging extremely quickly around the world and the interest on.
Evs and wind power and the advanced technologies that rare supply.
For advanced technologies.
They are talking about multiple fold increases in demand over the coming years, and we think we're in an excellent position and that area.
The Navy and used for steel and alloys, and and we have a long history of producing and ADM, there's increasing interest and it's also.
Critical materials.
And the price of vanadium is increasing so that's also a very exciting space on its own and then the recycling, which we responsibly do.
And the Earth only has a finite amount of resources and we can do that and reduce carbon emissions and then lastly, we're very excited about.
The release of our sustainability report, which demonstrates the significant amendment to health safety environment.
Environmental responsibility and the great things that we have done and we are very excited about the positive contributions that we make to the environment.
And also with the ability.
Ability to do the recycling and potentially eventually cleaning up some of the Cold War legacies of uranium mining that we're on the Navajo nation, perhaps else perhaps elsewhere. So we're very excited about our sustainability story.
2020 highlight.
Highlights.
As I mentioned earlier, we remain the number one U S minor and producer of uranium.
We successfully entered the rare Earth business, we created this U S Europe, where our supply chain that I mentioned with Neil just a month ago or so.
We expect to be producing rare earth products.
And.
And the next week, and then a stage more advanced and other companies.
We have been a leader and the industry charge on government initiatives on uranium.
With the appropriations or the U S uranium reserve.
And the extension of the Russian suspension agreement.
We're maintaining our vanadium option with nearly $1 7 million pounds of finished vanadium and inventory at the White Mesa Bill with the ability to respond quickly with.
Additional Canadian production recycling out of our tailings facility and the price of vanadium has increased by approximately 60% and 2021 alone and I mentioned, the publishing of our sustainability report, which I would recommend to all of our shareholders.
And all of those interested and energy fuels to read that report because it shows the immense positive.
Impacts that we can make with what we do as a business.
And on recycling and with the products that we make these critical materials.
So we believe again as I said earlier that.
We have emerged as a key source of critical minerals and the United States.
And also financial highlights and.
And of the year 2020, we had about $50 million and cash marketable securities or inventory and that included.
Alluded around $22 million of cash and marketable securities and about $27 million and Iranian and Canadian inventory total working capital of about $40 million and we had on operating loss of around $25 million.
<unk>.
Oh excuse.
Excuse me.
I've been forgetting to say next slide so anyways, we're on slide number six.
In addition, since the <unk>.
And of the year, we were able to raise $30 million and cash.
On our ATM at a price of about $5 50.
Three.
Per share.
And that leaves us with cash and marketable securities at this time of around $80 million.
And then if you look at additional.
Rises and commodity prices.
Our current inventories are valued at around 30.
And $5 million Thats, an increase of about $7 million greater than whats on the balance sheet. So if you add all that up the company is well positioned.
With well north of $80 million of cash marketable securities or inventory and as I said earlier also.
So the debt is paid off so we have the financial strength to execute our business plan.
Next slide.
So we should be on slide number seven where you.
Should be on slide number seven and I apologize for forgetting to say next slide.
So again, just highlighting the finance.
The strength and flexibility.
Both the cash securities and inventory nearly 700000 pounds of uranium inventory and nearly $1 7 million pounds of and ADM. Our 2021 guidance is between 30% to 60000 pounds of uranium production.
And we hope to have somewhere in the order of 720, and 750000 pounds of uranium inventory at year end.
And we also plan to produce and.
Around two to 3000 tonnes and mixed rare earth carbonate.
<unk>.
Between 1000, and <unk> hundred tons of Oreo.
If you look over to the right and the other table you can see where the value of our uranium on the books versus the current prices have gone up about 28% and the vanadium has gone up from.
537.
Two 833, nearly 55% or greater and.
And our current market cap with 140 million shares on issue is.
At the.
Share price as of a couple of days ago was around $900 million and.
And as I said.
Growth depth next slide.
So again many of this slide many of you have seen before.
Slide number eight.
It is our main production facilities, because we do have three production facilities.
<unk>.
ISR facilities on standby Nickels ranch, and Wyoming, Alta Mesa, and Texas on standby the weight Mesa Mill, and Utah, which is really our flagship it's the only conventional uranium vanadium.
In the United States remaining and it's also where we plan to produce the rare Earth and.
It has a long history of production of uranium and vanadium and soon to be rare Earth, and then and the lower right hand corner is opinion plain mine in Arizona, which is also on standby that and.
A significant high grade momentum mine that we can restart and is probably the lowest.
Cost going forward production costs in the United States.
Next slide.
Now this is a slide that really says it all when it comes to uranium production in the United States.
It shows over the course of approximately 15 years.
And the uranium.
Low Wilson and the companies that had produced the uranium and if you look at in the upper in there where it sort of the.
The gray or the light Blue 25 million that is the production from chemicals U S assets over that period of time the blue.
Is the energy fuels assets, which was <unk> 16.
<unk> 2 million. If you include uranium production of the chemical and the energy fuels assets. It totals about 85% of the total uranium production over 15 years from just two companies. If you add U R energy, which didn't produce 15 years.
16th day.
<unk> was a fairly significant producer.
And the middle of that time period, $2 7 million and uranium one and the red between four companies. It was like 97% of uranium production and the United States came from four companies. So we believe.
Ago, and a very excellent position with a proven history to be producing.
And the prices justify or and or when the uranium reserve.
Gets fully funded.
U S government support now next slide is on slide number 10.
U S government support.
Believe for uranium miners.
Right and and.
Administration support some nuclear energy and critical minerals.
And the uranium reserve has been appropriated and a bipartisan way and Congress were $75 million for 2021, we expect the U S Department of.
And <unk> to manage that process and we expect that the cash.
Companies that should be able to benefit from that or those with proven.
Assets and proven history of production so that graph I showed just before <unk>.
Importantly believe on who has proven.
And their ability to produce uranium.
Also at and.
October of this last year 2020, the Russian suspension agreement was extended for another 20 years that was important to reduce imports of Russia and uranium into the United States, putting cap on certain products.
Energy uranium products.
That could be delivered into United States and also reduce of circumvention.
So anyways.
What I always tell people is that when you look at a.
Turning market, whether it be rare earth.
On uranium ore vanadium.
Emily they pivot on a number of things and small things and getting the uranium reserve appropriated and the Russian suspension agreement extended or two of those things and are moving and the right direction.
Okay and talk a bit more about next slide this on slide number 11.
Nor launching the reverse supply chain that we announced with Neil.
And our production of a rare carbonates and 2021, our short term business plan for this year.
And it started with the purchase of monocyte or which contains uranium that we can recover.
Cover.
From the <unk> company that is <unk>.
Mind and.
Georgia and Florida.
And we're also out currently.
Currently sourcing the possible purchases.
Additional monocyte to buildup supply of monocyte to the white.
<unk> lease and milk.
And we will soon as I said next week start producing and mixed with carbonate at the White Mesa mill.
This initial 300 tons the.
And the initial material that we have the minimal agreement for three years of 2500 tonnes minimum.
Monocyte material per year equates to about 10% of U S requirements. Currently so we hope to build that up to something in the neighborhood of 50% or greater and time and so we have big plans and we're very excited about the role white.
And so we'll have and this.
And this area, particularly in processing and <unk>. So we then will on sell the mixed railroad carbonate and two.
<unk> and existing separation facility at Neal in Estonia, the Soma facility and.
And so really that.
Short term business plan is well underway for 2021, the long term business plan looking to 2023 24, it really is focused on <unk>.
Larger scale and full integration.
In the United States.
And and getting.
Getting there quicker faster and lower cost than any of our peers.
We believe that our plans can be world competitive give.
Give it enough feed and as we move towards full integration.
Next slide so again slide number 12 this shows.
Graphically what I just said.
And we've already achieved those.
Three milestones for 2021, and we look to expand those milestones and increase.
During the course of the year. So what's this space is going to be very exciting for everyone and then.
And then as I said earlier moving to 2023 24, and we're looking for full integration.
The the <unk>.
Their supply chain and the United States of America.
And into Europe, with our relationship with Neil net.
Next slide slide number 13.
Talk about vanadium, certainly vanadium was area that had significant interest and that 2018 19 period when the price of a navy and went up to about $30. A pound I mentioned, it's mainly used for high strength alloys.
But it is getting increasing attention for.
Grid scale battery technologies for mainly renewables. It is a critical minerals I mentioned and the U S and Canada and we were the largest producer of and <unk> in 2019, we produce at very high purity vanadium, we still have substantial inventories valued currently at around $14 million.
At 833 current prices and.
And we also have the ability to produce another 153 million pounds of vanadium from our tailings quite quickly if the market supports it.
Going back into production and as I said, the price of and Aegean has gone up substantially this year.
Alone. There is also a and Aam's section 232.
Net.
Could give us some substantial relief potentially.
And the vanadium space as well net.
Slide.
So slide number 14.
On the uranium recycling the vanadium recycling.
That would otherwise be a loss to disposal energy fuels being the only operable mill that can do this kind of work.
And we have a long history of doing that that over the course of a couple of decades, we've recovered somewhere in the order or the assets and recovered some of on the order of about six.
Me and pounds of uranium.
Put that into context that would produce the same amount of electricity of a coal train going from L. A to New York and almost all the way back to L. A.
So that is a substantial recycling effort.
Which has reduced a substantial amount on.
And admissions because of what we could do and how we could do it at the White Mesa mill.
In addition, the vanadium and recovered from our tailings facilities would be enough.
And to build about four and a half Golden gate breaches. So no other company can tout the recycling that.
We do on uranium and vanadium and again, we're very proud of it.
Next slide.
So this is the last slide.
And really just sums up it really.
And leading U S producer of critical minerals.
We have unmatched ability to scale up.
Uranium production from proven and assets that are fully paid for.
We have more capacity more experience.
We're moving at lightning speed with our MX rare Earth carbonate production, we're at and advanced stage beyond any other company and when it comes to processing and the United States.
States and as I said also earlier these initial material from the growers.
The company that we're securing is around 10% of U S demand.
Uranium reserve is progressing the U S government supports critical minerals I think that the.
The public and.
And the world supports the need for having.
Adequate access to critical materials, we have this recycling program, we can participate in the cleanup of the Navajo nation, which is something that I.
Very.
And a very dear to my heart that I would like to participate the cleanup those legacy.
<unk>.
Mind that were mined in the <unk> and <unk> no relationship to energy fuels, but we can help contribute to clean up those mines now.
We are well positioned financially with zero debt and we have the vanadium inventory and production option to go back and and vanadium production.
Potentially fairly quickly if the net.
And prices continue to increase so we're in a really excellent spot.
Thank you for your interest and energy fuels and.
And we will now open it to questions.
If there are questions from anybody who's listening into the call.
Thank you ladies and gentlemen, we will now begin the question and answer session should you have any questions. Please press star followed by one on you touched on film Youll hear threet on Brown acknowledging your request and Youre questions will be bold in the order. They receive should you wish to decline from Chipotle Ross's. Please press star followed by.
Two if you're using a speaker phone. Please lift your handset before pressing any keys one moment for your first question.
Your first question comes from Joseph Reagor with Roth Capital Joseph Your line is now open.
Hey, Mark and team thanks for taking the questions and.
That's on all you guys have accomplished.
And such a short time.
And thank you Joe.
So.
First on on the uranium side.
Can you give us any additional color on and I understand if he can and can't on the uranium reserve and the timing you think that we might see that that 75 million actually gets spent.
Spent what the process is like as far as getting your inventories approved to even.
Make a bid for this and how.
Do you see those dynamics working out.
Look at it.
It's still not completely certain on what.
The timing is and exactly how.
The mechanics would work when it comes and uranium and reserve.
Certainly pushing for that too.
Two to be laid out.
And when you look at our company and uranium producers of America, working with the government and.
Particularly the dose to try to help them come up with workable solutions. So I don't have a lot of information at this time Curtis do you want to add anything to that.
Yeah, I mean, it's there is the $75 million that's been allocated for for this year.
<unk> energy is the.
And as the agency is going to be leading the charge on this we would expect them to issue an RFP a request for information.
That will ask and industry stakeholders, such as ourselves how they think that how we think that the reserve should be stood up.
Our urging them to make sure that they get this program stood.
Stood up this year and start buying uranium this year.
The purpose is to support the established uranium producers like energy fuels and.
And yes, we're excited to see that happen and we're also.
Going to be arguing that they should be able to buy U S orange and inventories from producers like us because it would put.
Some capital and our pockets to allow us to ramp up production on some of our sites.
Okay. Thanks, and then.
On the railroad side.
Are you guys seeing any other opportunities you have this one source right now, but have you guys talked to a number of other companies how fast can you scale.
Scale. This any numbers you can give us or ballparks on on timeframe to to make this a real sustainable business like long term.
Yeah, well, we're talking to a number of parties.
And on all steps of the supply chain here, including a.
Key to the White Mesa mill.
No.
Alright.
I don't know exactly how it unfolds, but I can tell you there's very keen interest.
And we're now is another option outside.
Outside of China.
In the United States, with Mike Mason, and making significant.
It's very quickly and very purposely.
So as I said, it's our goal to go from that sort of this initial say 10% of U S.
Demand up to 50% and and I would hope that we could do that and a few years and a few years I'm not talk.
Strike, a decade and talk on a few years, we still need to be and are positioned to two two to build out the full integration because that gives us.
The best economics to do that Joe.
But again.
I think youre aware that when you look at the demand for rare so the forecasts.
And demand for rare Earth.
I think there's going to be a real need for both the white Mesa mill to be contributing and the big way here.
And I think there'll be significant support for people, who need those and products.
Okay. Thanks, I'll turn it over.
Okay. Thank you.
We have a following question from Colin Healey with Haywood Colin. Please go ahead.
Hey, guys and thanks for taking my question and I'd reiterate what was just said congratulations on what you guys have done for the for the stock and for the company over the last year.
I guess first of all do you think.
And that you'll be putting out anytime this year, some some capex estimates surrounding.
Advancement of the <unk>.
And the rare Earth initiatives.
And when you talk about your long term business plan and and the different different value added products that you could potentially produce.
Do you think do you think well see anything in terms of.
Economic studies.
Yeah Colin.
We're planning to start doing some scoping work.
Soon on.
On what it would cost too.
And to build out these other steps and the integration process and.
Be able to provide the market with a better guide.
<unk> on what we think our cost structures will be and the products that we will do.
We do plan to.
Focus initially on the MVP R and the lights, but we also think that we will move forward and heavier because a lot of the feed streams and the monocytes and have a quite substantial.
Our quantities of heavies and them as well.
As I mentioned we.
We believe that our capital strike rate is going to be very attractive very attractive because we have and existing.
On a facility we have.
5500 private acres, we've got a lot of the infrastructure in place.
<unk>, including the laboratories and shops and <unk>.
The tailings facilities and whatnot. So we think it's going to be very attractive and if you've listened and any of the interviews. It Constantine carrying Annapolis is made with knee OA citizens.
Some of the most cost effective cash.
Capital.
Production for rare Earth.
And he has ever seen and his whole career so.
Yeah, we don't have accurate numbers at this point in time, but they will be very attractive I can say that with confidence.
Okay, and I guess between between now and then as far as your agreement with with Neil goes you know taking about 80%.
A sense of the total rare earth contained and the supply that you've already secured.
Have you do they have the ability to take more or.
Have you found another.
Separation facility or are you and negotiations. So if you do secure more or you'd be able to quickly.
Uh huh.
Potentially turning that around and ship it rather than keep it and inventory.
Yeah, well look at it at this initial agreement with Neil it's capped.
Yeah, well it depends on what the market is at the time and Neil has their facility and Estonia.
And they're looking at.
Maxing out that capacity, which they currently havent done, but they've also been discussing potentially expanding capacity in Estonia. So looking at where we're going to keep our options open.
As I said, we would.
And you ultimately want to have a substantial amount.
The materials.
So it's a white makes it fully integrated four.
Usage in the United States, and North America, but again, we just have to take it a step at a time.
Okay and.
When do you think we'll see kind of on some numbers, if you're if you're sending a pending carbonate.
It's too Neil.
Do you think that you'll be capitalizing those processing costs, and and and sales or do you think you'll be showing through in the revenue in Q2 and three this year.
Look and I haven't really got that far I don't think we will capitalize.
On the day freely and you can chirp and if you want to.
But certainly look at we hope we can give more flavor you know this.
And this year.
As as the program evolves.
We are going to be doing the this initial rare earths from Kim ores on it and a couple of campaigns. So we've got this initial campaign.
And we'll have one later in the year. So day Friedland do you want and make any other comments with regard to that.
No I think you captured it and our expectation right now is we'd probably be expensing. These initial costs and then and then and then determine where and where it goes from there.
Okay. It sounds like.
And if youre expensing costs, and we'll get to see the revenue against those costs. Okay. Last question for me is there a price hurdle you mentioned vanadium price that are doing better and.
And you've got I think 1.7 million pounds and inventory their price hurdle for vanadium, where you eat aggressively tried and marketed or offload that whats the strategy with that inventory.
We don't really have a price hurdle, but.
But when they when it starts getting up towards $10, a pound and that starts getting interesting to us I mean, certainly the increase from $5 up to and the mid eights as it got our attention already so we don't.
Really have any.
Any any real plans on exactly you know Theres no magic number there.
We do think though having.
Inventories, particularly when you look at things that are as volatile as the medium that you really have to have that inventory to capitalize on that volatility and a positive way.
So yeah look we'll just see how it goes but we're excited that it's moving up and the right direction and we.
We think it's one of these and other critical materials.
It's starting to get a lot more attention and the importance of the role it can play.
No.
And.
And it's sort of initially boutique sector called critical materials.
Sure. Okay. Thanks, very much guys and I'll, let them and I was asking the question.
Thank you.
Your next question comes from Peter Trapp with by Frost Capital Peter. Please go ahead.
Yes, Hi, Mark.
It's amazing what you've accomplished here and 11 months, let's say.
It's really quite impressive.
My question is.
Focused on slide number 12.
Which is your slide on the rebuild.
Supply chains.
And the short term.
Cash and three company Shmuel, you guys and neo.
On.
The medium term.
The way its presented and.
And I understand where you're going longer term.
Presenters and such a weighted it looks as though there was nothing more than a short.
And fix.
Short term fixed to get stopped processed and and Estonia, Oh, why do you figure out.
And how to do it all in.
And Utah and.
And I wondered whether neo views.
The joint venture the same with the same.
Wei as it appears on this chart.
Or whether in fact, there's.
And there's a bigger plan.
For the three of you tube work together.
And more closely.
Yes.
Good comment Peter I think look and we view our relationship with.
As a long term.
Partner and the rare Earth business.
And again when you start looking to 2023 24, we're not exactly sure how that is going to eventuate, we still could be shipping material too so Matt.
And that time period.
Yeah.
Neal it is.
And it's it's a three year deal so look at where we're gonna be remain kind of open to how this evolves.
But certainly the relationship with.
With Kmart and Neil.
And just kind of put us on the map with the credit credibility and the pedigree.
The green of existing producers of these different steps.
No.
And with strong capabilities and track records of doing that successfully so yeah don't read too much into that lower line.
Because it is subject to evolution and evolving over time, but.
We do.
And B that you know Neal has a very important role and the supply chain around the world.
Yeah, Hey, Mark if I could if I could jump in here and this is Curtis.
That lower slide that Laura chart. There is really meant to represent what a U S supply chain would look like.
<unk> said I think we would expect to have a relationship with me over the long term but.
And that flow chart was meant to represent what a U S supply chain wouldn't look like a U S only supply chain.
Yes.
And it makes sense because.
Okay.
I mean like the top producers separators produces as opposed to just miners.
And I think that they add.
A huge amount.
Yeah.
Substance wise and credibility.
Two of the joint venture so.
That's why I raised the question.
And so the other criticism just an observation.
Yeah, that's that's fair enough, Peter and you know as as as I said you know it's.
We believe that the relationship and it's been good for lots of reasons and you know people you know tend to criticize.
And he comers into the space that you don't have the expertise and knowledge or.
And the ability to get there anyway, and Ah and a quick and effective way and I think we're proving people wrong and partly because we have teamed with the right types of people to get us there without.
And a bunch of mistakes.
Okay. My second question is.
Are you at Liberty at this stage to discuss.
More fully.
If if there are.
Other sources of motors, I sense to which you might have access.
I'll make on dealing uniquely with schmalz puts kind of monopolistic situation and.
I'm wondering if.
They're on.
Further.
Sam's or substances that you can use.
We'll keep the ship more.
And as fine, but keep them you know kind of interested on a competitive price.
Yeah, well look.
And as I said on initial agreement is the 2500 tonnes a year for three years came on this has.
Indicated that they may be able to flex that up.
Two two and a half fold.
But there are other people that are showing up.
And at the door with a Mont.
Monocyte here and the United States.
Either currently or something that could be developed in the future. We're also getting inbounds from overseas of people that have monocyte.
So yeah look and again, Peter we don't know exactly how it unfolds, but we're very buoyed with the inbounds that we've received.
Not just you know on the front and but you know various other steps and the process, including.
Some end users you know Ive mentioned on a few.
A few of my calls where we have been contacted by a significant automobile manufacturer.
And so all these things from the beginning to the very and it's getting a lot of notice so you.
But exactly how it unfolds, we don't know, but we do know the.
Chinese were able to successfully.
You know moved to monetize integration fairly quickly when they announced it a few years ago and they've done well with it and you know it's just our objective to do something similar.
Okay. Thank.
Thank you and again congratulations on what you've accomplished.
So in short period of time, it's quite impressive.
Thank you Peter.
Thank you.
Our next question comes from Todd Robbins with five mile Dodd. Please go ahead.
Okay.
Thank you again mark.
Can you.
And I understand what the economics will look like.
And as you start to ship the <unk> thousand 600 tons of rare Earths to Neil.
And I know you're early on and the negotiations with them but.
How should we be thinking about the economics of those sales.
Yeah.
Well.
Yeah look at it I understand where it's it's you know it's not may be completely transparent and you know where you are and the early days, we're dealing with fairly small quantities, but look we look we believe that.
And when you look at it and at the project level down at the mill level that we can be.
Help us effectively.
Cash breakeven.
At the mill level, plus or minus but with the current uptick and in rare Earths prices, we think we might even well be able to make a few million dollars a year on these initial quantities now.
And remember once we produce a carbonate.
We have you ship it to do it's Tony here.
Which is a cost and then Neil basically buys it on a formula.
And so they were able to secure this this.
Material.
You know on a formula so it's not completely optima.
<unk> by any stretch of imagination.
But what we do believe is that the.
And the economics are particularly when you add the integration component are very compelling and very competitive.
At current price is extremely compelling.
But even at lower price and so so we think that the monocyte paas.
Pass and advantage our cost advantaged in the value contained rare earth and the monocyte and not just the lights, but the heavies and we believe it will be will compare.
Imperative as we scale it up and as we secure the ability to do some day integration and at White Mesa. So so.
And there isn't really.
Over time, you really have to have a level of integration.
To.
And the profitability that we want to get too but.
It's early days, let's let us take a step at a time, but we're very excited about the compelling economics, we believe that and our approach will have in the space.
Okay.
And again and in the case of Mark and the case of further integration as you start to move forward to finish rare Earth element.
Is this a process that you feel comfortable that you can achieve or is this something that you hope to be able to achieve.
We think we can achieve it.
We think we can achieve it we're going into this with the view that we are going to move forward with integration at White Mesa.
And.
And a fairly quite aggressive way as I said, we hope to be scoping.
And we hope to be looking at building up the feed supplies to justify that integration.
We believe that the.
People that we've already teamed with with people like Neil and Constantine and his team Bronco Kelly Jack lift and.
We look at the people that we're reaching out to.
<unk> four scoping studies that have had decades and decades of history of dealing with monocyte dealing with the full integration are exactly the kind of people that we need to make sure that each step we take as a step forward and not a step backwards, while it doesn't mean that you can't sometimes take a step.
<unk>, that's a slight but we're going to be very focused on having the right people and the right place.
To do the absolutely highest standard and each step of the way to come up with the best economic outcome here.
When do you see yourself, making that step in terms of capital commitment.
Yes.
Again, it's too early to say, but.
And when you look at our little timeline, there that says.
2023 24.
We still believe that those are reasonable timelines did to start having that integration.
Back on potentially on the ground. So we think again, we can move quicker faster because of the existing facility.
Existing permits that are in place. The fact that we're in a in the state of Utah is very supportive for this type of and processing and mining and.
So I don't know if Dave Friedman and if you have any other comments that you'd like to add to that feel free to chime in.
Yeah Mark.
I don't think youll have much to add.
The weighted lease a mill and there's a lot of them.
And one of the similar equipment that where.
And we need to fully integrate for errors designed for a range of vanadium we.
And we can work off of that.
We will evaluate any permitting additional permitting and that may be required, but we think it's all achievable within that timeframe.
Thank you very.
General and.
Okay.
Yes.
Thank you, ladies and gentlemen, as a final reminder, should you have any questions. Please press star one.
There are no further questions.
My apologies it looks like we have a following question and from Iran.
Very much with Nash partners Ron. Please go ahead.
Good evening.
My question is pertaining to the number of shares and the company I know you did some at the market sales primarily last year are you still at a point and time, where youre still.
Considering.
At the market sales.
And the raise capital with all the capital that you seem to have.
Hello.
We always.
And to maintain our ability to raise capital as required.
When you're looking at our cash position is very.
And now right now, particularly with the inventories and the upgrades that we're seeing on the value of our inventories.
If we start looking at things like.
Full integration, that's going to cost you know additional funds.
Above and beyond probably what we have.
And Treasury right now and we will look at you know the ways to do that if we decide that we're going for full integration.
You know and and and there's different ways to finance that type of and and look and we don't we don't have exact numbers, but it's kind of we kick around numbers between 100 million.
And and maybe up to 250 million for full integration. So we always want to keep our options open and we did refresh our shelf for a $300 million recently. So you know, we're just going to see how it unfolds, but but I think it's important.
And that people understand that.
And that because we're starting with a facility that's fully paid for it's a crack and leach facility that that.
Looked at Linus as is.
Going to spend to build a new facility in Australia for around three 400 me and just with the crack and Leach facility.
And you look at the.
You know and some cases, maybe over $1 billion spend and other projects and the world.
You know if you look at what we're talking about at least and orders of 102 hundred $50 million.
You can see that it's a it could be a very attractive strike rate from a capital perspective. So so look we're going to leave our options open.
To do what we need to do but our focus is going to be.
Two to achieve a multibillion dollar company. If you look at the lineup at $4 billion.
And you look at mountain pass it seven or $8 billion, our focus is to become a multibillion dollar.
Our company and if that takes and requires us to raise a 100 or $200 million to do that we think that's a good use of funds.
To the benefit of the shareholders.
Very good thank you very much.
Thank you there are no further questions at this time you May proceed.
Okay, well look at and closing.
First I apologize for not advancing the slides are telling you and advanced at the beginning of the presentation, but I think as you can tell we're very excited about.
And what we're doing and.
And how we're doing it.
And and we really are plans are big.
We will be aggressive but not reckless.
I think that we've surprised the market, particularly rare earths market on how quickly we've advanced and with the people that have teamed with us.
One.
My biggest sales agent is Constantine.
Echoing how excited he is with the relationship with energy fuels, and Neil and I I I just want to reiterate that we really appreciate that relationship and what could hold and the future there so anyways.
Again, as I said and closing we're thinking big here, let's see how 2021 progresses, but we think we're off to a great start and we're looking for big things and the next couple of years and fulfilling a material chunk of the rare Earth business.
And integration.
In North America are very quickly so anyway. Thank you very much and and any of you that are on this call are listening to this call you can always reach out to myself.
Sure Curtis more at any time, we're always available for.
You know basically.
Asian Communications on.
These kind of events, so feel free to do that if you'd like to do so we'd be happy to talk to you. So that's it and thank you very much.
Ladies and gentlemen, this concludes your conference call for today.
Participating and ask could you. Please disconnect your lines.