Good afternoon. My name is Pam, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Energy Fuels conference call and webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, we will conduct a question-and-answer session. If you'd like to ask a question, please press star one on your touchtone phone. If you'd like to withdraw, please press star two. Thank you. Mr. Chalmers, please begin your conference.
Good afternoon, everybody, and welcome to today's webcast. My name is Mark Chalmers. I'm President and CEO of Energy Fuels, and I'm excited to talk to you today about rare earth elements. Also joining me today will be Paul Goranson, our COO. As many of you know, Energy Fuels has been leading the charge with the U.S. government recently, actually over the last couple of years, on getting attention on the U.S. dependence on nuclear fuel products, including uranium, and we've become almost 100% dependent, over a number of the last couple of decades. That should shock everybody because we are the largest consumer of uranium in the world, and, we have almost zero capabilities right now in mining, conversion, and enrichment.
Just like our dependence on primarily the Russians and their allies, we also, in a similar fashion, are dependent on imports for rare earth elements from China. Reducing our dependence on rare earths has become a major initiative for the U.S. government. In the past year or so, Energy Fuels has been approached by the U.S. government and a number of private companies about what our capabilities might be in the rare earth sector. And we spent the last several months looking at that seriously, and we've come to the conclusion that we may be able to offer a significant value in this space. I want to remind people, it's early in the process, but we're very excited about this opportunity. And if successful, Energy Fuels could play a large part in bringing rare earth element processing back to the United States. The next slide.
During the course of the presentations, I'll probably be making some forward-looking statements, and those are included as disclaimers at the back of the presentation and are recently filed with 10-K. Next slide. In addition, we will open up the floor for questions at the end of the presentations. And lastly, I'm always available for a call, and so if anybody wants to call me offline, please do so. Many of you will know the key investment themes for Energy Fuels, the investment themes, but some of you may be new to this call, so I think I'll go through them at a high level. Firstly, we always will be and continue to be a uranium-focused company.
We've been the largest producer of uranium over the last several years, and we have more production assets and capability to increase production quicker, faster when the market, demand signals are there than any other producer in the United States. We've also have a long history of producing vanadium, and we produced vanadium last year when the price of vanadium was higher than it is now, but we have the ability to resume vanadium production very quickly when the need, arises.
As I mentioned, we've been leading the charge with the U.S. government on the focus on reducing dependency on imports of uranium in the United States, and we're very proud that we were the lead kind of company that got focused on the U.S. uranium reserve, where the president is asking for appropriations in the budget cycle for 2021 for $1.5 billion over 10 years. We have been the main leader of that charge, as I said earlier. Also unique to Energy Fuels is we have diverse business opportunities that complement our uranium business proper. We have a long history of producing alternate feed, which is recycling a low-level natural uranium, and we've done that for a couple of decades.
We've been currently starting to do some land cleanup activities, and now we're looking at adding rare earths to that mix of opportunities. Lastly, on the themes, we have the strongest balance sheet of anyone in the uranium sector in the United States, and we're very proud of that. Next slide. Now, again, many of you will have seen this slide before, but our footprint, we have properties and projects leading, going from Wyoming all the way down to Texas. In the little green stars, if you look at the top there in Wyoming, we have two ISR facilities. That is our Nichols Ranch facility, which is on standby now, and we have another ISR facility at the South Texas, which is also on standby. But really, the topic of today is the White Mesa Mill, which is in the Four Corners region. It's that blue star.
It is fully licensed and constructed, and it's the only operating conventional mill in the United States today. If you replicated that project, it would take you at least 10 years to license and several hundred million dollars. As we'll describe today, w e think that we have over 40 years of successful production history with processing and handling radioactive materials at the site, and we think it can be utilized to process rare earth element ores. Next slide. White Mesa Mill. White Mesa Mill is one of our main flagships of the company. I mentioned it's the only operating uranium mill, but it's also the only conventional uranium or vanadium processing facility. Uranium and vanadium, like rare earth elements, are critical minerals. White Mesa is a large facility.
It sits on about 5,000 private acres in Southwestern Utah and has a current processing capability of 2,000 tons a day of conventional ores. The mill is the largest processing or private employer in San Juan County, and about half our employees are Native Americans, and we're very proud of that. The mill has processed uranium ores and other radioactive feeds for about 40 years, and during that period of time, it's produced nearly 40 million pounds of uranium and 50 million pounds of vanadium. If you go back into the 1970s and 1980s, there used to be 30 uranium mills in the United States, and now we have one. The main reason the White Mesa Mill has survived the test of time is because of its flexibility.
The flexibility that we've experienced with White Mesa Mill over the years is really where the current rare earth opportunity fits in. Next slide. Let's talk a little bit about rare earth elements. Rare earth elements, there are 17 chemical elements, including 15 lanthanides plus scandium and yttrium. Despite their name, they're not particularly rare, but finding economic deposits is hard to find. There are significant rare earth deposits in the United States and around the world. Rare earths are used for a variety of uses, including industrial, energy, military, and defense applications. But it's important to point out that many rare earths deposits contain significant quantities of uranium, thorium, and other radioactive elements. This is the reason why we believe the White Mesa Mill may be uniquely positioned to process rare earths. Next slide.
Because of the critical military and defense applications for rare earths, the U.S. government is very concerned about America's dependence on imports of these critical minerals. According to the USGS, China controls about 90% of the global rare earths market. To the extent that the U.S. currently does produce rare earths, most of these ores are shipped to China for processing. We believe that China uses our free market principles against us and manipulates global rare earth markets to ensure their control, and that has been done in the past. To reduce U.S. dependence on China, President Trump issued 15 determinations back in July 2019. He declared rare earths essential to national defense.
Citing the Defense Production Act, he directed the U.S. Department of Defense to support domestic rare earth production, including potential funding for pilot-scale operations and direct purchase of rare earth elements. We believe the U.S. government support for domestic rare earth production is essential for the success of the industry, particularly competing against the government of China. And now I'd like to turn it over to Paul Goranson to discuss where Energy Fuels may fit into the picture. Next slide.
Thank you, Mark. It's our view that there's a strong potential that White Mesa Mill may be the ideal U.S. processing facility for rare earth ores. First, it is our view that the U.S. has no significant rare earth ore processing because permitting such a facility and to handle and process low-level radioactive waste is lengthy and can be difficult. In addition, significant capital is required to build such a facility. And because rare earth markets are volatile and potentially controlled and manipulated by China, there's the cost of capital can be very high. But the White Mesa Mill may solve some of these issues. First and foremost, the White Mesa Mill already exists. It's licensed, constructed, and in operation today. It has a 40-year history of responsibly managing low-level radioactive materials.
Importantly for us, many rare earth ores contain recoverable quantities of uranium, as we are required to recover uranium along with the rare earths under our existing mill license. In fact, we believe we'll be able to recover rare earths along with uranium, under our license or with routine minor license amendments. Finally, to resolve the commercial issues with U.S. rare earth production, it's our hope that the U.S. government steps up to help insulate U.S. companies from foreign market influence. Next slide, please. This is a photograph of the White Mesa Mill. It's, as I mentioned earlier, in operation today. We have significant infrastructure that we think can be applied to rare earth recovery. From this photograph, you can see that some uranium ore stockpiles on the right and some alternate feed materials waiting to be processed in the lower left.
The main mill facility is in the upper half of this photograph. Next slide, please. Here's another picture of the mill building. Next slide. And here's some of the key points in the White Mesa Mill areas. We have, in the first upper left corner of the picture, we show a truck dumping ore onto the stockpile. We have a significant stockpile capacity at the mill, from the day it was constructed. In the upper right-hand corner is a portion of our current solvent extraction building. We have significant solvent extraction capacity currently in place, and experience currently in place at the mill. In the lower left-hand corner is our current operating SAG mill. It's a semi-autogenous grinding mill.
In the lower right-hand corner is a picture of our counter-current decantation circuit, or CCD circuit. Next slide, please. Rare earth element processing is well understood, and we believe that specialized processes can be bolted on to the White Mesa Mill to recover these metals. There are a number of minerals that contain rare earth elements, including monazites and bastnaesites. I'm not a geologist, I apologize for that. Each rare earth ore stream needs a specialized process. That's where the flexibility we believe the White Mesa Mill provides. It's a flexible facility where existing infrastructure can be used or new infrastructure can be installed.
White Mesa also has a distinct advantage of having a 40-year history of processing and handling other ores alternate feed streams that present similar health, safety, and environmental issues that could come with rare earth ores. The mill already uses a number of processes required for rare earth recovery, including solvent extraction, tailings management, leaching, precipitation, et cetera. Finally, we wanna make it clear, we're not looking to get into the rare earth mining business. We are evaluating potentially becoming a processing facility for third-party ores or other uranium-bearing streams provided by others that contain rare earths. We intend to enter into a toll processing, joint venture, or other similar arrangements with these third parties to process the rare earth ores at the White Mesa Mill. Mark, I'm gonna hand it back over to you. Next slide.
Thank you, Paul. Okay, while Energy Fuels has significant processing experience and expertise related to uranium and vanadium and alternate feed materials, we believe it is important to team up with experts in the rare earth element area. That is why we have engaged with ANSTO. ANSTO, many of you probably have heard of ANSTO in the past, but a lot of you may not. ANSTO is a research and consulting group based out of Australia, and I have worked with them over a number of occasions over the last couple decades. The closest analogy to ANSTO is it's kind of the Australian version of the US National Laboratories, like those at Los Alamos, Oak Ridge, and Idaho.
ANSTO has considerable experience with a number of things, but primarily uranium and rare earth processing, including design, testing, evaluation, minerals, flowsheet development, pilot and demonstration plant design and operation. We will also look at other consultants as is necessary. Next slide. Now, the main focus of this webcast is on the rare earths, but I wanna say a few words about uranium. I also wanna reiterate that we are first and foremost a uranium production company, and we think rare earths is a nice complement to some of our existing activities. Certainly on the uranium front, things are getting interesting because of the COVID-19 virus. Just about every day now, you're hearing about another mine being shut down around the world because of COVID. Kazakhstan announced that they were gonna cut production by about 20%.
That represents about 10 million pounds of production. Cameco made the announcement they're gonna suspend operations at Cigar Lake, and then after that, they said indefinitely. That's the world's largest uranium mine, and having it shut down equates to about 1.5 million pounds of less uranium production per month. Namibia is also extending their lockdowns, and they produce around 16 million pounds a year. So if you add that all up, those cuts are huge, and it's really taking a bite out of the forecasted 146 million pounds of production for this year. Our conservative estimates are that those cuts are knocking out about 1.5-2 million pounds of uranium produced in the world per week.
So if this goes on for a number of months, it is gonna make a substantial dent in uranium production in the world. But not only that, if you look at it, since the 1930s, there is no uranium production in North America, including the United States and Canada, or conversion. So again, that should shock people because this is the first time in, what, 70 years that we haven't had a uranium production in North America. Next slide. I'd like to talk a little bit about uranium prices, because fortunately, for once, they're going up and going up pretty quickly. Uranium price has increased about 25% in the last month and a half, and they're the highest prices we've seen in the last 4 years.
Price is still below the cost of production for most mines around the world, but it is encouraging, as I said, to see them going up for a change. We believe most uranium mines, particularly in the Western world, need prices above $50 to be sustainable, and new mines need far greater than that. Next slide. Okay, this is just the last slide to kind of wrap things up. There is no company like Energy Fuels out there in the space. We're the leading U.S. uranium miner. We have these diversified business opportunities. We have more uranium production capability and resources than any other U.S. miner. We're the only primary producer of vanadium in the United States. These other revenue sources, like alternate feed and legacy mine cleanup, are significant, but we also think they have the potential to expand in time.
And we think rare earth elements has the potential to be very complementary to our core business in utilizing our facilities at the best advantage to our shareholders. We're also extremely proud about our strong balance sheet. No other U.S. miner has the balance sheet that we have by far, and that balance sheet is improving with increases in uranium and vanadium prices because we have substantial inventory. We're gonna continue to lead the charge with the U.S. government. We think that we should be the largest beneficiary if the U.S. uranium reserve gets appropriated for that $1.5 billion I talked about earlier. And we'll continue to work with the Nuclear Fuel Working Group, and we're also very active with the Russian Suspension Agreement, which currently expires at the end of this year.
So really, the last thing I want to say is that we're gonna always be working to make our luck in this space. And it's kind of like fishing. Sometimes you gotta have a few poles out there in the pond with different bait on them, and we have a number of those, as we've discussed today. So now I look at, like, to close out the presentation, just open it up for questions for those of you who might want to ask questions from Paul or myself.
Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star one on your touchtone phone. You will hear a three-tone prompt acknowledging your request, and your question will be pulled in the order received. If you'd wish to decline from the polling process, please press star two. If you're using a speakerphone, please lift your hands up before pressing any keys. One moment for your first question. Your first question comes from Colin Healy with Haywood Securities. Please go ahead.
Hey, guys. Thanks for taking my question. Just wondering a bit about the budget that you're allocating to the studies with ANSTO, first of all?
Well, look at Colin, we really don't have a formal budget for what we're willing to spend, but as you know, we've got this strong balance sheet. We've got plenty of cash. But, you know, we're gonna start this process out, you know, based on its merits, and we have the ability, certainly, to ramp that up as required. So, I mean, with ANSTO, as I said, I've worked with them for many years, and, you know, we've got a full mill at the mill, or full lab at the mill, and, we're gonna just go on a as-needed basis at this point in time.
So, are they gonna be carrying out some of that work at the mill as well as back in the labs in Australia? And I guess, also, have you kind of set out, like, kind of first key deliverables or milestones? I'm just wondering, you know, what, what's the first work that they're gonna do and what it's gonna look like.
Yeah, look, the first work that's gonna be done, it's gonna be done at our, at our facility at White Mesa with our laboratory. We do have some materials from, you know, different places from, you know, around the world that we'll start testing. And, you know, basically, we're gonna do work with, at, at our facility, and we'll reach out to ANSTO as we, we need support.
Okay. Yeah, that kind of my next question was just about identifying rare element deposits that would be suitable or might be ore sources. Have you found like a number or identified a number within the U.S. that would be suitable?
Yeah. Look, we're not gonna get into specifics, but we've had, as I said, a lot of inbound calls from a number of different parties from around the world. And we're currently in the process of evaluating, you know, how that best, you know, could mate up with White Mesa and our, you know, facility.
Okay. And how does sourcing the rare earth element or potentially outside the U.S., how does that sit with kind of the government support for making it an essential element or critical material?
Look, I think the government would like to be fully self-sufficient, but, you know, we do have a lot of other, you know, allies around us, like in Canada, and in Australia and, you know, other parts of the world that are friendly trading partners with us. So, you know, I think we're gonna look at all opportunities, Colin, at this point in time, what seems to make sense. You know, I said the White Mesa Mill is a very large facility, and, you know, we know we'll have to, you know, modify the facility depending on what kind of streams that we have. But, you know, we're gonna be open for the opportunities. We don't see any, you know, impediment right now, at least from the government perspective, but we'll be looking at all options available to us.
Okay. Yeah, I understand it's very, very early stage. Last question from me. Just wondering about the, you know, you mentioned the, the front end processing capacity of the, of the mill. I'm just wondering, based on the deposits that you know of out there, is that, you know, an appropriate capacity for the amount of feed that you would expect to get? Or, you know, how does, how does the mill crushing capacity, how is that is that appropriate for a economic rare earth processing operation, or, or would you expect that it's high or low?
Look at the White Mesa Mill itself is, you know, set up for uranium ores, you know, at up to 2,000 tons a day. So, you know, look, there's a lot of common infrastructure, like your tailings facilities, our laboratories, our licenses, you know, our stockpile capabilities and things like that, that definitely can be used. And there probably are parts of the mill itself that can be used. But, you know, a lot of these rare earths, you know, you're looking at fairly small quantities, so we'll just have to look, and depending on what the sources that are available, what the mineralogy is, we'll have to figure out, you know, what additional equipment we'll need or if, you know, we have to scale things down, as is prudent.
Okay. Yeah, thanks. I know it's early days. Just wanted to field those questions. Thanks, guys. I'll step out.
Your next question comes from Joseph Reagor with Roth Capital Partners. Please go ahead.
Hey, Mark and team. Thanks for taking my questions. I guess, trying to continue on some of the prior callers' questions, have you guys like, you know, vetted, like what, you know, potential specific entities have, you know, ore that's close enough to make it worth shipping there? Like, how far down the line are you guys on that?
Well, as I said, we've been talking to, you know, various parties at high levels, so we don't have any specifics right at this point in time. So, but I think that one of the, you know, the real appeals of White Mesa is that, you know, as we said, that most of these rare earth elements have, you know, uranium, thorium, and other radioactive materials in it. And we're at a, you know, certainly can advance, you know, somebody needing to process or wanting to process, you know, much quicker because of those capabilities being licensed to take that type of material.
So, you know, it is early days, and as I said, you know, we're at the very beginning of the process, but we're very excited about the excitement that we've been receiving from people outside our organization. I mean, one of the reasons that you know, we decided to go this way is you know, looking at you know, our licenses and the excitement from others, that they may have a potential opportunity of a well-sited location that can get them you know, to market quicker and faster and at you know, potentially lower capital costs.
Okay. And then, you know, kind of bigger picture, you mentioned this, China kind of has a habit of doing whatever they have to, to maintain their 80%+ market share across most of the rare elements. Is part of your guys' process to try to find opportunities here where you can be, you know, call it less than 10% of world supply so that, you know, you don't become a target for them?
Well, you know, as I said, it's too early to talk about what size of the market that we, you know, we may try to shoot for. But, you know, I think that, you know, particularly in our position, you know, where we're diversified, you know, uranium is our primary business. We've got this facility, we've got vanadium, we've got some of these other things. You know, we can be probably a little bit more flexible than perhaps others that are 100% dependent on just the rare earths themselves.
But we think that, certainly, and more importantly, in this last few months or something, there's been this higher awareness created on dependence of, you know, critical materials wherever they come from. So, you know, as I said, we're not at the point where we're saying we're trying to be in 10% or 20% or whatever it is, but we think we could be a substantial contributor, you know, in this area, because of the things we discussed in the presentation.
Okay. Then shifting gears quite a bit. On the uranium front, you guys have constantly been trying to work to help with some of these uranium cleanups on Native American land. Any progress there, or is this the COVID-19 situation basically backburned all those opportunities?
Well, we currently have one project that we're working on. It's not on the Navajo Nation. It's not far from it. But, we've been helping a private entity take some of their low-level ores from that site, and we've been taking that for a number of months now. The COVID has put sort of a stop on our work with the Navajo Nation, but we do have a test project with the Navajo Nation that we're working at, you know, basically doing it for free. The Navajo is gonna ship material to White Mesa, and we're excited about that because, we want the Navajos, the EPA, and the public to be comfortable with, you know, we can, we can really do a major contribution here in helping clean up some of those sites. That's something that I'm personally very committed to because it's where we can really use that facility to clean up some of those legacy sites to everybody's benefit.
Yeah, agreed. And then one final thing, you know, on the balance sheet front, you guys raised some capital earlier this year. You know, how much cash do you guys have right now? And, you know, like, how long of a runway does it give you, you know, as we look to try to, like, just get through this period?
Well, you know, as I said, at the end of 2019, we had over $40 million of cash, trading, tradable securities or inventory. We raised another $19 million. We have also seen an upgrade in our inventory values because of uranium prices. But look, we're in really good shape, and we think we're, you know, very good shape for the next couple of years.
Okay, great. I'll turn it over. Thanks.
Your next question comes from [Jay Kim] with Alpine Global. Please go ahead.
Hey, guys. It's [Jay] from Alpine. Can you help me out with a couple of things? What was the total number of pounds of uranium? Was it somewhere around 130 million pounds?
Well, what that we processed in the past or what we have in inventory? What are you talking about?
Which you, that you have in the ground, effectively. Minable in the ground.
It's about the resources, I think, Paul, are what? About 130 million pound resources, that's what we have in our books, at least, and that.
Yes. It's about 130 to 140 million pounds. I don't have a specific number sitting in front of me.
Okay. So if we just look at a 130 million number, I mean, effectively, at a $180 million market cap, an investor is paying $1.38 for the uranium in the ground. Right? right.
Correct. Yeah, correct.
I realize there's manufacturing and processing costs, but effectively, just looking at it as a uranium bank, you know, spot prices at $25, $30, $40, you know, market rates on contract in the $30s-$50s. I mean, if someone were to go out and acquire uranium assets, w hat would if you have the balance sheet, what would you buy mineral assets for?
Well, that's a big question because there's so many different factors in that, [Jay], as you can probably imagine. But, you know, look, when you look at trying to find new uranium, you know, at $1 or $2 per pound, you have to. You know, that's not a lot of money to find new uranium. But, you know, we think that a lot of our assets are the best in the U.S. or, you know, that have been found over the last 40, 50 years.
You know, and it's, you know, uranium is pretty hard to find. But, you know, it depends. But, you know, you have to look at all these things like, you know, where is it located? You know, is it underground? Is it surface? You know, what does it cost to process it? But it's expensive to find uranium, and if you could find it for $1.50 a pound or whatever you calculated off of those, the numbers that we gave, you know, gave you with our market cap, you'd be lucky to replace those pounds, for sure.
Yeah. So, yeah, I'm just kind of looking. We get the story and understand the dynamics and the spot pricing and the U.S. sourcing. But it just seems to me that, you know, paying, you know, the valuation of the company relative to the 130 million pounds of proven reserves of uranium, I mean, it's kind of a no-brainer to emphasize when you do the math.
Yeah, and [Jay], if you look at it, you know, not to get into too much detail here, but if you look at the costs that people paid for acquisitions in an improved market, you know, it would have been $5-$10 a pound or something in that order, you know, in a stronger market. So, yeah, we're at very low valuations in terms of relatively, you know, market cap versus resources at this point in time.
Yeah. And the finished resources, the finished uranium you have for sale, what would that be on a gross dollar basis nowadays around spot?
Well, well, look, we've published we've got about 510,000 pounds of finished uranium currently in inventory at White Mesa or other places. So, you know, take whatever price you want. You know, if it's 500 times 30, that would be $15 million of uranium. We're still producing small amounts of uranium from some raw Alternate Feed. We plan to build that up. It may increase up to around, say, around 700,000 pounds, we think, by the end of this year. So, you know, material amount of uranium, and if the price uranium goes up pretty substantially, as I said, it makes a huge difference to our working capital.
And so beyond, you know, there was questions beforehand, but when you look at cash the burn, you really have roughly against spot prices today, another $16 million of nearly instant liquidity available to you.
Yes, largely. Correct. But don't forget, we also have vanadium. We have about 1.6 million pounds of finished vanadium product as well, too. So look, that gives us a lot of optionality because we think there's more upside to uranium prices than downside. Vanadium has been beaten up, you know, it's still creeping up a little bit, but not moving too substantially. So look, it gives us a lot of different optionality in how we manage the business going forward, depending on, you know, what's happening in the market and with commodity prices.
Yeah, and the final question on the rare earth side, I mean, you know, this has happened before. I think Trump last year, one of his only actions was securing rare earths. I mean, you know, we've seen this scenario play out before, what, 10, 12 years ago with Molycorp. And you know, the threats made by China about withholding, you know, molybdenum and vanadium and other essential minerals.
You know, do you think this time around, we're gonna learn from the lessons of the past, and that it's not good to have essential building blocks controlled by a foreign entity, and this time around, you know, we are, as a country, gonna have a different, more sensible attitude towards securing certain said items? And what on the process. Yeah, I hope so, too. But, the margin structure, since you're just gonna be doing processing, are you looking at, you know, taking a fee per ton, or are you looking at taking possession?
Just wondering, you know, theoretically, as it walks through the balance sheet, through the PNL and the cash flow statement, you know, how I should be thinking about it. Is it just like a rev split and just royalty-esque, if you will, or you're gonna take, you know, hard tonnage and take a certain amount of risk to sell the finished goods?
That's, that's too far down the path at this point in time. Look, historically, when we've toll processed, different materials, including alternate feed, it could be a mixture of a fee. It could be, you know, a split of the product, or some combination thereof. But, right now we wanna make sure that, you know, people that are in the rare earth business understand that, we're open for business, and, you know, we'll work with, whoever shows up at the doorstep, to come up with a, a good economic outcome for the, you know, the parties that are involved. And, and so we're open to what that might look like. You know, our, our view is that toll processing is, is kind of the direction we think we'd like to go. Certainly if there's people out there that wanna look at using the facility, it's all negotiable.
Okay, great. Thank you. That's it for me.
Your next question comes from Howard Brous with Wellington Shields. Please go ahead.
Mark, Paul, hope both of you are well and sequestered appropriately.
We are. We're all talking from our houses.
Fair enough. The reference to one of the prior comments, the 130, 140 pounds, [audio distortion] is that correct as a proven reserve?
Yeah. Yeah, in the order. I don't have it in front of me, Howard, but about 130 million pounds, yeah. They're resources. Most of those are resources, yeah.
But those, those are proven reserves?
No, T here's some reserves, but mostly resources, yes. Measured, indicated, and inferred.
Right, that's why I was asking the question. What is your current capacity at the mill to process. First, let's talk about uranium and vanadium, pounds per year.
It varies, Howard, but the mill has a licensed capacity of 8 million pounds per year. The best it's ever done is about 4 million pounds per year. When you start processing the uranium, vanadium ores, we usually slow down the circuit a bit for that. But look, it's certainly several million pounds a year of uranium and many million pounds of vanadium, you know, maybe 4 or 5 million pounds per, you know, if you were going at full tilt or something. But very large capacity on both of those, you know, those metals.
What kind of CapEx would you need to expand from your current, roughly 1-2 million pounds of capacity?
The
Assuming that the demand-
As a company, or as at White Mesa Mill?
Yes, White Mesa Mill.
Well, look at, as a company, we say we don't need a lot of capital, but we definitely need a lot of working capital to go to, say, uranium production as a company of 2-3 million pounds. We probably need in the order of $50 million of mainly working capital to get back to the 2-3 million pounds per year rate. If we're gonna go higher than that, we need more capital, and then we start talking about increments of $50, $100, maybe $200 million to go up towards 5 million pounds, 6 million pounds, or something like that. But we can reach the 2-3 million pounds with mainly working capital and just minor amounts of actual capital.
That's all I have. Thank you.
Your next question comes from Heiko Ihle with H.C. Wainwright. Please go ahead.
Hey, guys. Thanks for taking my questions.
We're ready, Heiko. Fire away.
Just going through the presentation. You mentioned earlier, I have a feeling that you might get the too early to say. I mean, you said you can't discuss potential targets yet, but can you just maybe give us an idea as to the size of the target market that you've had discussions with or that you plan on targeting, please?
Yeah, it's probably too early to say anything on that, Heiko. You know, there are a number of, you know, streams, rare earth streams or concentrates that we can, we can focus on of existing operations. There are a number of, players that have, you know, mines and deposits that, that are at, you know, various stages. Most of them are very early stages, you know, probably don't even have all the permits required. So it's gonna be very variable on what, you know, we could be looking at. Now, you know, one of the advantages, a lot of these rare earths are, are very high value, you know, per ton kind of, deposits. And, and, so it's, it's, it's too early for me to say, you know, exactly what quantities we're talking about. But, you know, it's generally speaking, low tonnages compared to traditional mining.
Fair enough. And nice lead over to my next question. Speaking of tonnage, just to confirm, what would be impact on White Mesa in regards to changes to the circuit, changes to tonnage, additional equipment needed, all that kind of stuff to get all this going? And how much of that is reversible, and how hard and easy is it to do? And I assume, plus it's way too early to have an answer to that. But, if you want to just sort of at least give us an idea, please.
Yeah. Look, I think that a lot of the equipment would be a secondary circuit, you know, so we would still maintain our ability to, you know, process, you know, uranium or vanadium or, you know, other ore feeds that we have that are traditional uranium, you know, ore feeds. But again, you know, we'll, you know, we'll look at what the options are to use what parts of the facility can be, you know, utilized, you know, where it saves some money. So I would think that we're probably looking at a separate circuit, mostly a separate circuit. But certainly things like the tailings facilities, you know, there's some commonality there that in itself is a key part of the advantage, we've got these, you know, 1,000-year designed class state-of-the-art cells that are specifically designed for disposal of, you know, radioactive low-level radioactive ore streams.
Yeah. Very good. Well, thank you, guys.
Your next question comes from [Dan Robatsky] with SIR Asset Management. Please go ahead.
Yeah, good afternoon. Thank you for taking my call. Tell me, what was the price per pound at the end of the year? And what is the range, and what is the current price per pound of the uranium?
Geez, look, at the end of the year, it was around $24 or $25, I think. And currently. I'm talking spot price. The current prices after these shutdowns that I discussed has risen up to around $31.50-$32 a pound. So it's gone up about 25%. You know, that, and that's just the spot price. Now, most uranium is purchased under contracts that would be higher than that. But you know, as I said, you know, current spot prices are still too low to economically produce uranium most places in the world. So, we've still got a ways to go, but it's encouraging that it's going up and going up fairly quickly.
And when you look at the revenue for the last two years, the loss of $25 million and $38 million, and the uranium concentrates basically went from $30 million down to 66.66. What do you need to do to get those numbers up? Is the current prices desirable to make a profit or reduce these losses?
No, the current, as I said, the current prices are not high enough to make a profit. Now, there are certain circumstances where we can actually be positive, cash positive with the White Mesa Mill with some of our alternate feed or, you know, recycling activities. You know, we need in the order of about a minimum of 1 million pounds a year production with pricing that is in that range that I gave in the presentation, which is north of $50 per pound. You know, one of the things that has happened is that because price has been so low, we've gone down to basically zero uranium production in the United States. One of the reasons our burn is high is we have more assets than anybody else in the uranium sector in the United States.
You know, when you have a lot of assets, you have a lot of holding costs when it comes to permits and people to keep those projects in good working order. If people do not have assets, they can have a very low burn because they have nothing to maintain but an office. So, it's, you know, it, it's expensive to have the properties we have. As I said, we've got three production facilities. No one in the U.S., at least in our kind of our peer group, has three production assets that are fully permitted and ready to go.
The prices for the vanadium, what was that at the end of the year, and then what's the current price in the range?
Yeah, the price of vanadium, going back about a year ago, it went up to nearly $30 a pound. It came down, the price dropped down to about $5 per pound. It's now up to about $5.70-$5.75 a pound, so it's still at fairly low levels. But, having worked with vanadium in the early parts of my career, I learned long ago that in order to capitalize on the vanadium market, the only way to capitalize is to have inventory ready to deploy at short notice when the price goes up. So that's really the position we're taking on marketing vanadium.
As far as rare earth that you would like to sell and process, what kind of revenue—what would the prices for the rare earth be? And could that be profitable since it's just coming from China, and this is basically in the U.S. directly, and it. And you might be the—would you be the only producer of the rare earth in the U.S.?
Well, there's a number of companies that are looking at entering into the processing and doing further downstream processing in the rare earths. So look, it's too early for me to say anything about profitability from rare earths. You know, it depends on, you know, one, if we can acquire, you know, sources, what the quantities are, what the grades are, you know, what the cost is to process it, what the current, you know, prices are for the rare earths that you're selling. So look, it, I would like to defer on that for now, but, certainly as we go through this process, we'll be happy to inform, our shareholders in the market as we get more information available.
Is there any possibility for the government to make the uranium from the United States demand a higher price and with the tariff coming in from China so that you could be profitable from uranium and vanadium?
Well, look, at the request we made to the U.S. government is that we need higher prices than current world prices because many of those prices are subsidized by state-owned enterprises. So, you know, we're asking the U.S. government to provide a pricing that is sustainable in the Western world and for U.S. producers to survive. Look, and I think, you know, a lot of the same thing kind of, you know, is applicable in things like rare earths and other critical materials where a lot of these state-owned enterprises are, you know, operating at and selling at prices that are unsustainable in the Western world.
Well, good luck. Hopefully, the prices work with you so that you could eventually make a profit. Good luck. Thank you.
Your next question comes from Peter Trapp with Bifrost Fund. Please go ahead.
Thank you. So Mark, I have a series of questions, as I'm involved in the rare earths quite a bit. And my first question is whether, in fact, you're looking at this as a strategic long-term plan or whether this is an effort to use some capacity utilization at your plant, because from my understanding, people like Lynas and Northern Minerals in Australia, Ucore, Round Mountain, are all looking to build their own facilities, and in which case it would have to be that your strategic plan would be for a short-term fill-in. That's my first question.
Well, we're you know, as I said, it's early days. We're looking at a strategic long-term plan on how rare earths, you know, may fit into what we do using our facility. You know, some of these these other companies that have these streams that you know, will likely have you know, low-level radioactivity you know, we may provide a different option to them that maybe it makes more sense to do something with you know, White Mesa than it does you know, doing a new you know, facility in some other state or wherever they are in Canada or whatnot. But, no, we're looking long term here. We're not looking short term.
And as I said, you know, when you've got a facility and it's got the licenses for low-level radioactive material, you've got staff, you've got lab facilities and whatnot, that gets a kind of, we think, ahead of the game in a number of these areas. Does that ultimately drive the best economic outcome? I can't say at this stage.
Okay, so my second question is that Lynas, on their earnings call last night, mentioned that their Malaysia processing facilities are still closed down, and they are bidding in tender on two production facilities in Texas, I believe. And so the interesting question there is, you know, Lynas tends to be more light rare earths as opposed to Northern Minerals is much more heavy rare earths. And so the question is going to be whether in fact you're gonna focus more on the lights, the heavies, both, which would probably mean, you know, fairly extensive capital expenditures. And what time horizon you see as being able to process the first pound of rare earth, if you were to get an order from, let's say, from Lynas tomorrow?
Well, look, it's again early to tell, but it's my understanding that Lynas is the combination with COVID-19, but it's also my understanding that some of these radioactive streams, and I don't know all the details, you know, in Malaysia, we're creating some issues with some of the NGOs and whatnot. So, look, we think that, you know, some of these materials, we're being generalists at this point in time, and we will focus down on this in due course. But, you know, we think that there is the potential that, depending on what how much you upgrade this material, like getting to a concentrate and whatnot, we could do probably fairly quickly.
If you go, you know, further down with more refined products, you're obviously talking more capital and more time. But, you know, we're just conceptually talking about being in a position to do some treating possibly in the next 12-18 months or so. That's kind of just conceptually, but I don't wanna be held to that. As I said, it is early days. We don't wanna over speculate here.
Okay, but are you focused more on the heavy rare earths or the light rare earths? Because after all, what America needs really, well, actually, well, not just America, but most of, most of the Western world are looking for, rare earth processing for, defense, reasons, as well as for, you know, for magnets. So, have you made a decision, that you're going to work more on the rare, on the heavy side or on the light side?
We haven't made a decision. Paul, do you wanna chime in here?
Yeah, that's right. The decision whether you wanted to look at light rare earths or heavy rare earths depends, will drive your separation technology and your process. We haven't gotten there yet because everything depends on, we're still evaluating the back end. When I say the back end, that's a separation from the concentrate to final products, and there may be opportunities where others are doing the same, where we can combine resources. We just haven't reached that decision point yet because it depends on economics and what it takes to get to those type of products, and whether there's enough in the feedstock that would provide an economic outcome on that.
Okay, so one last question. Have you, have you consulted with either the Department of Defense or in general, with the U.S. government about financing for CapEx? And what kind of support have you been offered just to do a conversion of a line or to set up a process for this rare earth?
Go ahead, Paul.
Well, we have talked to the U.S. government, to the Department of Defense and Department of Energy, you know, people who work with the Department of Energy about this. There's not been made any commitments to doing any financing. We know there's money out there. There's the, the five, the five determinations the president issued under Section 303, out there that provides the ability to get funding. But, as of this time, I, most of the people who would be with the government, who would be involved with these discussions, are currently, focused on the, the COVID-19 response that the government is having. So those, w e haven't advanced those discussions much beyond our initial discussions we've had with them last year.
Okay, thank you.
Your next question comes from [Mark Thomas] with Moose Pass Mechanical. Please go ahead.
Yeah, hi. I think you answered my first question, and my first question had to do with the thorium in the ores, and I understand that you are capable of putting that into a repository for safekeeping. Is that correct?
Correct. Yes. Well, we have it. It comes out. This is, the thorium produces a by-product of the uranium recovery as we recover the uranium off of these peaks, these streams. And it does go into our tailings impoundments, for they're licensed for by-product material. And keep in mind, we already have. There are significant thorium in our tailings already, so it's yes, we're compatible with that.
Okay. And then are you familiar with Rare Earth Cooperative Bill, S. 2093, and do you have any responses to that?
Yes, I'm familiar with it. I don't have much response. We've got to see if that bill's gonna move. It looks like it's the one that provides the best way for the U.S. to move forward on these critical metals with respect to the way competitive, anti-competitive actions are being done by others in China, et cetera. But it depends on whether there's enough support to move that bill.
Okay. Yeah, I know there's a few deposits of rare earths up here in Alaska that obviously contain thorium, and I think we got to deal with that on that level. So, I know that bill addresses it by creating a thorium bank, so I'm not, I don't have a dog in the fight, but I'm definitely interested. So thanks for your program.
Thank you. Can I, before we switch to the next question, I just wanna make sure people know that the webcast we provide, the presentation, I know some people have trouble seeing it, will be provided on our website when this is done.
Thank you. And your next question comes from Jenil Shah with S&P, S&P Global Platts. Please go ahead.
Hi, Mark and Paul. Thanks so much for hosting this. I really appreciate it. I wanted to ask about the spot price of uranium, because as you noted in the presentation, we saw the spot price rise from $24 a pound in mid-March to $32 a pound now. And, I was wondering whether you could comment on this price rise continuing and where you expect the price reaching in the coming weeks?
Well, look at the price rise, as I said, is encouraging. Ultimately, the uranium price has got to go up to the fair price of production, okay? It's been suppressed for a long time with, in many cases, excessive inventories. So you know, if you really look at the fair uranium price, and I mentioned in the presentation, that, we need, we believe $50+ and $70 or $60-$70 a pound or greater for new projects, it needs to rise to those levels to be sustainable globally. There are some companies in the world that can produce for lower than that, but when you start looking at increases in demand of production, you need prices that are probably in the order of double what they currently are on the spot prices for sustainable production around the world.
That makes sense. Thank you. Would you be able to comment on when you expect that to occur?
That is a good question. I don't know. But, you know, look, if you go back to, you know, like 2006, 2007, supply disruptions really moved the price of uranium dramatically. You know, it went from $15 or $20 a pound up to, you know, $130 a pound or something very quickly when you had Cigar Lake go underwater. Now, it's different right now with the COVID-19. I don't think this is gonna be a long-term disruption, but you never know. There is always risk out there in the world, you know, whether they're political risk, whether they're technical risk. You know, we've seen what COVID is doing to the price of uranium right now. You know, you never know exactly how quickly these things can react, but we do need to get back to that sustainable pricing that I mentioned previously.
Thank you. You had previously mentioned about restarting Nichols Ranch and White Mesa Mill, and I was wondering how long would it take to ramp up production at these two facilities?
Look, we can. And it depends, again, because of our facilities are all so very different. I mean, we're still producing, you know, small quantities of uranium from alternate feed right now at the White Mesa. But, generally speaking, we need around a year or so to really kind of get some momentum going again on our properties because, you know, we've, we've reduced, staff, you know, over the years, and it takes time to rehire people and get, you know, get equipment and people back in place and working together. So, you know, over a course of, you know, 12-24 months, we can be back in, pretty significant production.
Okay, that sounds good. Thank you very much. I appreciate it. And just lastly, I understand that there is continued discussion about the $150 million budget item, that the Trump administration had proposed earlier this year. I was wondering if you have any insights into ongoing discussions at Capitol Hill about this, and how likely you expect that to be passed?
It's in for appropriations right now for the 2021 budget cycle. So, you know, how quickly does it get appropriated? You know, we don't know at this point in time. Paul, do you want to add anything on that front?
I think we pretty much captured. It's going through the appropriations process now, and given everything that's going on right now in government, it's hard to say what the appropriations process will look like over the next few months. So there are people in Congress still pushing to try to get the Uranium Reserve program stood up, and there's support from the White House. We just don't have any visibility as to exactly the timing or how that'll be done.
Great. Great. Thank you very much. I appreciate it. Thank you.
Ladies and gentlemen, as a reminder, should you have any questions, please press star one. Your next question comes from Howard Brous with Wellington Shields. Please go ahead.
Thank you. Just as a follow-up, you had mentioned the Navajos. The EPA has a $1.7 billion settlement with the Navajo Nation to alleviate a good number of the mines on Navajo territory. Have you, one, put in a bid on that? It's not one bid for $1.7 billion. There are a lot of different pieces, but one, have you put in a bid or is this something of not interesting to you?
Yeah, it, it's not really a settlement with the Navajos. It's a settlement with a number of the parties that had some of those properties, you know, back in the 50s, 60s, and 70s. But, we haven't been in a position to really bid on that, Howard. But as I said We're looking at a pilot program in conjunction with the Navajos that we're very excited about, where the Navajos have a site identified, and we've offered to take material from that site, a limited quantity for free, to get that moving with the Navajos.
And I think the key thing that the Navajos are frustrated about, Howard, is that there has been limited or no action by the EPA or the government to clean up those sites when this money is available. It's a very prescriptive environment that the EPA operates in when it comes to studying these sites and, you know, how do you clean them up and how do you remediate? And the Navajos want to see some action. So we're trying to do everything possible to provide an option that is immediate. You know, we can take material from the Navajo Nation right now, and we're currently doing it from that one project I mentioned in New Mexico.
All right. Last but not least, is it a correct understanding that the uncovered pounds for 2021 through 2025 is in excess of 80 million pounds? Talking about the utilities. That sound right to you?
I don't have those numbers. I don't have those numbers in front of me, Howard, e very day that goes by, there's more uncovered pounds. Yeah, feel free to call me, and we can talk more. At length on that. Okay?
Thank you again, and I appreciate the time.
There are no further questions at this time. Please proceed.
Okay, well, look, and I just want to once again thank everybody for joining us for this call. You know, we're very excited about, you know, all these opportunities in front of Energy Fuels. The rare earths is new to us, but as I said, you know, we think we can really add a unique opportunity for those that want to partner with us. Anyone that wants to talk to us at more length about that, you're welcome to contact myself or Paul Goranson, you know, at any time. And as I said, we will report back to our shareholders in the market as we get more information. And, but I really appreciate the interest that people have shown in this area and with our core business, which is first and foremost uranium. Thank you very much and have a good evening.
Ladies and gentlemen, this concludes your conference call and webcast for today. We thank you for participating and ask that you please disconnect your lines. Have a great day.