Good morning. My name is Sylvie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Energy Fuels conference call. Please note that all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you do wish to ask a question at this time, please press star followed by one on your touch-tone phone. And if you would like to withdraw your question, you will need to press star followed by two. Thank you. Mr. Chalmers, you may now begin.
Thank you, Sylvie, and welcome everybody to the Energy Fuels conference call. We're excited to be here today to talk to you about the progress we've made on rare earths at White Mesa Mill. I just wanna highlight that rare earths is a complement to our uranium business and vanadium business and our recycling business. So, it really fits nicely with our organization. Today, joining me will be David Friedland, our General Counsel and CFO, and Curtis Moore, our VP of Marketing and Corporate Relations. I just wanna remind everybody today that you will be driving the slides, so you'll have to toggle them to advance the slides. Also, I will potentially be making some forward-looking statements, and these are included at the back of the presentation.
I also wanna just highlight that, as the first slide shows, that we- it is our, our goal and objective to be making commercial quantities of our rare earth carbonate, and extracting uranium in the first quarter of 2021, which is not very far off. We're also looking at doing some NdPr separation on-site as soon as this coming year. And we're also in the process of evaluating dedicated rare earth separation capabilities and potentially other downstream processing. Next slide. As many of you are aware, we announced yesterday that we had inked up a three-year supply agreement with Chemours.
We're very excited about that because we think it's a significant event in the rare earth industry, not just in the United States, but in the world. Most of you are familiar that rare earths are used for a number of clean energy and advanced technologies, particularly with electric vehicles and wind power, cell phones, computers. So, it really is, rare earths are the future of not just United States, but of the world. We believe, as I said earlier, that this is a complement to our market-leading US production capability. Natural monazite is the highest value rare earths in terms of grade and uranium content in the world, and that is a real differentiator in the rare earth business.
And, you know, in addition to this, this new opportunity for us, you know, we provide clean tech businesses and the, and the likes of the uranium, our core business, vanadium, and also continue to focus on assisting the EPA of cleaning up abandoned uranium mines. Next slide. Look at the concept of using the White Mesa Mill for rare earth production is very simple. It's, it's, it's licensed, it's constructed, it's operating. We have a long history of responsibly producing uranium, vanadium, and the recycling over four decades. And this is unique in the fact that these monazite ores contain substantial amounts of uranium. So, we can recover the uranium, and that also allows us to recover the rare earths.
We look at this in effectively two phases. The first phase is between now and into 2021. And this agreement that we've signed with Chemours represents approximately 10%, think of this, 10% of the U.S. mixed carbonate in the United States. So, this is a very material first step for our company. And so, you know, we think that it is really a great step, and particularly with just the short period of time that we've been in the rare earth business, which is eight months. No one is moving quicker, faster than we are. We're also excited about the work we've been doing with the Department of Energy on the coal-based resources, because that's a nice complement, too, to what we're doing.
As I said a few minutes ago, we're looking at moving on to separation, which is the next step in the process, including possible recovery of cerium. Now, looking to phase two. Phase two is not that far off either, just a few years out. It is our goal to supply 50% of the U.S. separated rare earth oxide demand in the United States. And again, looking at the fact that we announced in April this year, we think this is absolute rocket speed. So, you know, it's our goal to increase the quantities of a natural monazite ore that's available to us. We are talking to a number of parties on that front.
You know, and as I mentioned, you know, how we combine that with the DOE's programs, and looking at the additional infrastructure we have. Almost all this work we're doing is with the existing infrastructure that we currently have, and that is, again, something that is very, very exciting because of the value that the mill provides. Not just for our core business, uranium, the vanadium, and the recycling, but with the rare earths, it's just remarkable. So, but we are definitely looking at separation and potential metal making and alloys, very shortly. We hope to maybe even be in the scoping studies, in 2021. Next slide.
Look, many of you have seen this slide before, but the White Mesa Mill has proven critical mineral production capabilities, and it continues to emerge as probably one of the most significant pieces of infrastructure in the United States, and perhaps one of the most significant in the world when it comes to critical mineral production. It's the only conventional uranium and vanadium mill in the United States, and we're very proud of that. As I mentioned, fully licensed, constructed, and operating today. We have probably in the order of 60, 70 employees working at White Mesa today. It's a large facility. It's capable of producing 2,000 tons per day of uranium feeds.
It has the tailings capacity, currently constructed 1.5 million tons of currently constructed, and we're adding additional permitted capability to have somewhere in the order of almost 5 million tons of constructed or permitted triple-lined , state-of-the-art, tailings facilities. Got a long history. It's produced about $2 billion worth of uranium, vanadium, and recycling over its 40-year history. It's been upgraded a number of times. We're very proud of the exceptional record it has with regard to environmental stewardship and regulatory compliance, and as I said a little earlier, a long history of handling these types of ores and materials. So, we are uniquely qualified to do this work, and we are also very experienced with a number of the steps that are in the rare earth processes, including things like solvent extraction and equipment.
So, we have the expertise on site as well. Next slide. White Mesa, there have been a number of people that have told us this: it is the missing link for rare earth supply in the United States. Missing link. Again, that is why it is so significant. The monazite ores are very high grade in terms of rare earth content. Typically, the type of ores that we're securing, or at least are covered in the initial supply agreement, are 50%-60% of total rare earths, and they have about 0.2%-0.3% uranium, which the uranium grade is effectively the same grades as we mine at a number of the nearby mines in the district.
One of the advantages of monazite is, not only the high grade, but it also is relatively simple to process as compared to other rare earth materials. It can be produced at the mill with the existing licenses to recover the uranium and the rare earths. And so again, this is where it's a different separation from others, and the fact that what other people's problem is actually our core business. As I mentioned earlier, with the tailing's capacity, we have ample existing capacity and permitted capacity. When we start talking about, say, in the order of 10,000 tons of monazite ore, that represents just 1% or 2% of the mill's capacity and tailings capacity, and as I mentioned, state-of-the-art facilities.
Successful, when we started in April, we were doing lab scale, and we've been progressively uprating the scale of that, and we moved from lab scale to four 1-ton lots, and we're now moving up to 20–25-ton scale. So, we're ramping up very quickly. And the other thing that is really remarkable is that it only cost us to get into a position to commercially go into making a rare earth carbonate concentrate about $2 million. And that literally blows the socks off of most people, that we could use existing infrastructure and some of that money was reagent.
So, two million is sort of a, almost an overstatement of what it really costs in terms of, of any other, modifications we made to the mill. So really, Energy Fuels is completely focused on clean, green technologies and the future, and we are very focused on best practice, on minimizing the amount of waste we have, and position this, incredible facility, for the future. Next slide. Now, let's talk a little bit about the monazite from Chemours. I mentioned the high grade and high value of the, the Chemours material, between 53% and 55%. It has a very, very favorable distribution of NdPr, and this is the, the elements that are used for high efficiency, magnets and electric motors that are used in cars like the, you know, Tesla electric cars and wind generation.
It also has a very high grade of heavies, around 14%. I mentioned it contained uranium. And because of the processing that we're doing, we're actually able to reduce the amount of material that goes to the tailing's facility by about 50%, because that material, the rare earths, is actually advances to these other separation steps. So, this is, and again, this is one of the key differentiators because a number of other companies are focused on bastnaesite, which is not as favorable in terms of grade, it's not as favorable in terms of processing, and it is a real differentiator in the fact that this is our focus, and this is also the focus of China.
With CNNC in China, they focused on monazite for the very same reasons we're focusing on it, and we're basically trying to replicate what the Chinese are doing. Next slide. Now, this slide, the steps, and again, I just wanna highlight how rapid our progress has been. April 2020, eight months ago, we announced entrance in the business. We started signing up some of the world's most successful experts in the rare earth business in the entire world, with Constantine Karayannopoulos at Neo, who worked previously at Molycorp as well, Brock O'Kelley from the Colorado School of Mines, Jack Lifton. You know, I think this has really gotten a lot of attention from people that have been following the rare earth business. In September, we received this DOE grant for the coal-based resources.
There's a number of characteristics very similar to monazite, so it fits nicely with what we're doing in October. And we got a lot of play on a video that we sent around with a press release on our first rare earth carbonate at pilot scale. And that really woke a lot of people up with what we're doing. And we're starting to commence this work on the next step, which is a separated NdPr. And we'll see where we go with existing infrastructure at the mill in 2021, and then with the execution of the supply agreement with Chemours for 2,500 tonnes minimum over three years, this was an excellent first step-or start. Now we're looking to hopefully upscale that with Chemours.
They have indicated that they can, hopefully, increase those quantities over time, perhaps maybe 2, 2.5 times. So, we'll have to see how we can work with them to upscale this. We are in discussions with a number of other players. Now, the next slide, the pilot scale, and this is the video that I was talking about. I think I watched this about 50 times because I loved it so much. We believe that this was some of the first mix of rare earth carbonate produced in the United States at this type of scale in 20 years. So, we're very excited about that. This was just the very first step.
I'm not sure if you can control that and click on the little video, but it still requires some further watering or dewatering after the filter press through centrifuge, but then the product is ready for rare earth separation. So, again, a picture is worth 1,000 words. Next slide. Near-term objectives, I've touched on a few of these. You know, we executed this first supply agreement. We're looking to commence a commercial production at scale, and so we're going from the lab scale to 4 tons, to 20 tons, to thousands of tons in 2021. We're actively out there, as I mentioned, securing additional sources of natural monazite ores. We believe they're out there.
We believe they're out there, and if people wanna do business with us, we think that we have at least a very significant opportunity to get to that 50% of our target production, our goal production, fairly quickly. I mentioned the NdPr separation test. On a test basis, we're continuing to work with the DOE on this coal-based program that we mentioned. And lastly, for 2021, and I think this should get people very excited, we're gonna start seeking collaboration with auto manufacturers, renewable energy companies, and others to look at rebuilding the entire U.S. rare earth supply chain. And we think we are ahead of the pack, particularly with where we are with our rare earth carbonate.
And we're gonna start talking to some of these people, and we hope and believe that this is gonna be exciting for them as well. United States production, reestablished and processing and moving forward to separation of potential metals and alloys. Okay, next slide. So, as I said, we're on track to produce the carbonate. On a dry basis, it's about 71% total rare earths. We expect to process at least a minimum of that 2,500 tons in 2021. We'll recover the uranium, that will be sold into nuclear fuel cycle, and the material we make will be ready for separation. And it is again very similar to the supply chain that China is already doing.
Now that we've, you know, completed the agreement with Chemours, and their operations are in Florida and Georgia, and it was previously being sold and shipped to China for processing. So we're very, very happy that they signed this agreement with us. We think it's an endorsement of our capabilities in the future. And as I said, when it comes to other parties, there are people around the world, particularly in Australia, Africa, Brazil, that are currently shipping material to China, and we hope some of that, and we're not looking for all of it potentially, but some of that will come our way.
Lastly, we are in ongoing negotiations to sell our rare earth carbonate to separation facilities, starting to sell that hopefully early or mid-2021. So, look at long term. You know, I mentioned this sort of phase two, which is at 2023-2024. You know, we're really focused on fully securing the feeds and having full integration. It is most economic to do this all-in-one spot. It doesn't make a lot of sense to make one product and ship it to Europe or ship it to China, or ship it to some other distant location, because you eat up a lot of the costs and transportation costs. So, it's very important to have full integration.
We believe that this separation circuit at White Mesa, being able to do all these steps, is very important to the economics of the plan long term. We believe that we can design and construct or modify our existing facility for relatively very attractive capital costs compared to others, maybe in the order of $100 million for the separation circuit. And if you start looking at metals and alloy circuits, perhaps it's somewhere in the order of $50 million-$75 million to construct. Now, we still have to do engineering studies to confirm this, but we will be focused on best available technologies to get the most cost-effective and most environmentally friendly outcomes here on all steps of the way.
We have secured the expertise from a group in Europe that basically built out a lot of the infrastructure or designed and helped construct the infrastructure in China, and we're very excited to have them coming on board to help us in the future, potentially with the scoping study in 2021. Next slide. Look at, I think you all know, or a lot of you know where White Mesa is. It's south of Blanding in Utah. It has excellent access. It has extensive history, as I mentioned earlier, dealing with uranium and other feeds. And something we're very proud of, 50% of the workforce is approximately Native American.
So, we hope to grow both employment in Utah, and San Juan County in particular, for the future, and hire a lot of additional Native Americans as well. As I said earlier, we have an exceptional track record on environmental stewardship and regulatory compliance. We have about 5,500 acres of private land. And for decades, we've been one of the largest employers and taxpayers in San Juan County, one of the poorest counties in the United States.
And we hope these initiatives, increase employment by in the order of 100 new jobs in time, good paying, benefits, having benefits with those, those jobs, in the county, which will make a remarkable difference, to that part of the world when it comes to employment, both for, Native Americans and, and others living in the county. Next slide. So this is just sort of a graphic that shows this phase one, phase two, the short term up to 2021, the agreement with Chemours, the making of the carbonate at White Mesa, and then moving to separation and looking for global customers. That's the first step, phase one, and then looking, midterm, looking for full integration and using White Mesa Mill every step of the way where we can.
And this is what should get people excited. If you've seen the progress we've made in the last since April, and then you look at this midterm, we are doers. We're not promoters. We're focused on getting things done and getting things done with focus and the right expertise, and the right consideration for the environment, that is who Energy Fuels is all about. So that is really my last slide. You can tell from my voice that I'm very excited about this. I've told people this is probably one of the most exciting opportunities in my entire career, and I've been in this business for 45 years, or at least the uranium business, and I hope you share in some of that excitement. I'd now like to open it up for questions from the floor.
We're available to answer questions right now.
Thank you, sir. Ladies and gentlemen, as stated, if you would like to ask a question, please press star followed by 1 on your touchtone phone. You will then hear a 3-tone prompt acknowledging your request, and should you decide to withdraw your question, simply press star followed by 2. If you're using a speakerphone, you will need to press, please lift the handset before pressing any keys. So please go ahead now and press star 1 if you have a question. And your first question will be from Heiko Ihle at H.C. Wainwright. Please go ahead.
Hey, Mark, thanks for taking my questions. Mark?
Yeah, I'm here, Heiko.
Ah, perfect. Hey there.
Thank you.
Dream with me a bit, dream with me a bit here, and I have this question based on slide three of your presentation. If things go well, how could this whole thing break down in revenue for rare earths, vanadium, uranium, and call it, you know, 10 years? I mean, what's the technical capabilities of the asset to actually get this throughput done?
Well, Heiko, I think, I think the number one capability is our ability to handle the uranium and the radioactivity and the material, even though it's low radioactivity. So, I think the first ability of the facility is that we have the ability and the history of dealing with that and extracting the uranium. So that's the number one thing. But the other thing we have is, you know, the site itself, you know, the infrastructure at the site, things like the power, you know, the water, the equipment, like the solvent extraction circuit shops, laboratory equipment expertise, you know, people that are used to doing these, you know, the cracking and leaching is just that.
It's cracking and leaching the rare earths and extracting uranium. So, these are, these are all things that we're, we're used to doing. The mill, as I mentioned, was, is, is substantially larger than we need for the rare earth side. You know, we're talking about, you know, small tonnages. I mean, even if we get to, say, the 50% of the United States requirements, you know, you're only still talking about, you know, a couple percent, 2%-3% of the actual throughput of the mill, and the ability to handle the tailings. So, so it, it's, it's, it's a lot of pieces to it.
We have the ability to do things like heat for heating leach, but it's just the synergies between the existing infrastructure, a lot of which we can use, you know, looking to the future.
Yep. Building on what you just said, can you just provide a little bit of color on the replacement value of White Mesa, and also how much have you, like, you as an Energy Fuels invested in it so far?
Well, the replacement value is kind of hard to determine completely because, you know, there hasn't been a new mill built in the United States for a long time. But we estimate it at probably $300 million-$400 million, assuming you had the permits and the plans to build it today. You know, the reality is it would take probably at least a decade, if you could get it permitted before you could do that. There have been... The mill was originally built in 1979, 1980, but between then and now, over the 40 years, there have been a number of upgrades to the mill in terms of things like instrumentation. A lot of the tankage was replaced.
We've built these triple-lined, or RCRA, designed-for-a-1,000-year cells 4A, 4B, and we're permitting these other cell 5A and 5B. So there have been a number of improvements to the site over the course of the years, but certainly, the biggest investment was when it was constructed in that about 1980 time period.
Excellent. Thank you guys so much, and, stay safe.
Thank you.
Thank you. Next question will be from Mark Reichman at Noble Capital Markets. Please go ahead.
Good morning. Well, you know, it seems to me that, you know, to really realize the full economic value, you probably will want to invest in a, in a separation circuit, in a REE metals and alloys circuit, which looks like it would be kind of $150 million-$175 million. So, 2 questions related to that. One, you know, how do you... do you see trying to strike offtake agreements with the likes of Tesla and others to kind of backstop the financing before you would, you know, move to that stage? And then second, you know, right now, you know, you'd mentioned that the existing plan would only take up about 2% of, of the throughput capacity, you know, based on U.S., rare earth demand, but obviously that will grow.
That's kind of a moving target. So eventually, it seems like, you know, you're dedicating a greater percentage of White Mesa Mill's capacity. So, do you think you've got the, you know, all the pieces in place to kind of go all in on rare earths?
Yes. Yeah, we think we have all the key pieces, and like you said, you know, the separation, the metals and alloys, you know, there is some specialty equipment there that we'd have to add to get full integration. But no, we think we're off to a great start. And look, it'll Mark, it'll evolve over time. You know, the first thing is we've got to kind of line up the supply long-term supply agreements. And as I said, I think you know, we've had a number of inbounds on that front. But you know, I think if we're not really ready, who who's better ready, okay? I think.
You know, we've got the facility, we've got the people. We got the infrastructure, and we got the ability to utilize so much of this equipment as possible to reduce the strike rate. You know, even if you talk about separation plant and metals and alloys, you know, $150-$175 million are in that order when we finally get an engineered number for that. You know, when you add the fact, the mill already exists, I mean, our strike rate for capital is just a fraction of what others would have to spend to start off from scratch.
Mm-hmm. Yeah, much less the permitting and everything else, and the track record of the safe operations. So just moving more to the near term then, and, you know, I know that you, you've kind of provided kind of the percentages of the total rare earth oxides and the monazite. But, like, for example, you know, in just a ton of monazite, what would the cost be? And then what do you think you would sell that carbonate, the resulting carbonate from that ton of monazite for, to a, you know, a separator?
Yeah, I mean, I don't wanna get too much into the cost, Mark.
Okay.
But, you know, like, I mean, just in general orders of magnitude, you know, and if you look at like a monazite equivalent, a kimberlite equivalent, through separation. Now, you know, every step you take, you get a value add, but, like, through the separated steps, the general values of that contain recoverable, not looking at everything in the material, the ore, you know, it's between $5-$7,500 a ton equivalent. Like, if you looked at, you know, here comes a ton, and how much is, you know, can you recover through the separation step? The off-site separation is expensive for us because we have to ship it to another country, because it doesn't exist here in the United States.
You have to ship it to another country, so you incur a cost to do that, and then separate it at another facility and get another group involved in the process. The Chinese do it all in one spot for obvious reasons, just to get the synergies of doing everything in close proximity to each other. So, but we think, Mark, that we're gonna be very, very world competitive. One of the lowest costs outside of China for a number of reasons, 1, we're using the monazite, as I mentioned earlier, it's favorable to process. 2, it's got the grade. 3, Utah is a great place to do business. Power costs in Utah are, like, a 3rd of what they are in Australia.
People costs are about a half of what they are in Australia. There's an abundance of water at the mill, or at least our existing water rights. And you start adding all these things together, and the existing infrastructure that's in place, you start adding these things together, and I think you come out with a very, you know, good outlook in the future when it comes to how we fit in from a competitive basis with others.
Well, I agree. These seem to be the necessary first steps to building a much larger and growing business. Thank you.
Any other questions?
Yeah, there's, there's three more people. They'll be with you there.
Yes. Your next question will be from Colin Healey at Haywood Securities.
Hey, guys.
Hey, Colin.
Sounds like you're not ready to talk about the processing economics. I just wanna make sure when you say you're starting commercial production, does that mean you're gonna be declaring commercial production and showing the revenue in the financials, or is this going to be the revenue and cost capitalized? Are we gonna see these numbers at the end of Q2, let's say?
Dave, as our CFO, why don't you answer that question?
Thanks, Mark. Yes, we're ramping up to commercial production. When we go into commercial production, if we're successful in getting, you know, agreements for separation, we'll show those costs and revenues on the financials. To the extent we haven't tied down separation, we will be holding our carbonate in inventory. But that should all be showing up in the financials next year.
Yeah.
Right. Okay. Yeah-
Sorry, go ahead.
Yeah, Colin, I just want to emphasize, too, that, you know, this first 10% is just the first step, okay? We wanna keep ramping that up and to get the economies of scale working in our favor. But we do believe, you know, if we get an offtake for this, the next step of separation at reasonable prices, that, you know, it's probably something like a break even at the mill level, the first step, you know, in that order. So, we think that's a good place to be, particularly with these initial small quantities that, you know, the 10%.
But if we can get to where, you know, we can double, triple it, it starts ramping up very quickly in terms of cash flow.
Okay. Yeah, I know, I know it's kind of uncertain. I just, you know, based on your discussions with potential separation facilities, I mean, you must have, you must have kind of indicative carbonate prices to make the decision to start to process. So, but you kind of answered the question. I guess you're saying, you know, potentially break even based on your internally estimated costs, and that would, that would carry through 2021, I guess, unless you start to feed more ore? Is that a fair assumption?
Yeah, that's generally where we're at, where we're thinking, is that this first we get the flywheel turning, we start building up the scale. As I mentioned, people like Chemours have indicated that, you know, in time they can uprate, you know, more quantities to us. You know, some of the other people we're talking to, you know, are also talking about, you know, some reasonable quantities, and it really all kind of the optimal economic outcome has to be increasing the quantities and at the same time having those next steps at the mill to get the economics.
We see those as very achievable, and we also see that, you know, when we start engaging some of these other, you know, downstream users that I mentioned earlier, there's a number of ways we can get there from a financing perspective and really see this thing optimize, hopefully fairly quickly, as we secure more feed.
Right. Okay. And when you, when you mentioned the statistic 50% of total U.S. mixed rare earth carbonate demand, is that U.S. demand as it appears in end products that are used in the United States, or is that based on U.S. manufacturing demand requirements?
Curtis?
Yeah, I believe that's, it's actually, it's not an end use product because, you know, rare earths, in terms of the value of the end use products, is something like $2.6 trillion or something like that. So, yeah, we're not, we're not producing at those levels, of course, but, no, it would be in the actual consumption in the United States in manufacturing, I believe.
Right. Okay. And, yeah, the reason I asked that question is because I was just trying to double check the disruptive, like, price, price impact on REE. But, if it's, if it's U.S. manufacturing requirements, understanding that's much lower than, than, than products and product requirements, it doesn't sound like it would affect, repricing in the way it might have if you interpret it the other way. Okay, I think I'm good. You don't have anything about that you can talk about in terms of margins after investing in a separation facility? Like, anything in phase two that you would be using to make a construction decision or an investment decision in a $100 million plant? Like, is there-
Well, I mean-
pricing threshold?
It's very variable, but I can tell you that, you know, with the latest uprun in some of the rare earth prices, you know, it looks very attractive. You know, we don't envision... You know, I think one of the beliefs is that it's gonna be very difficult for the world outside of China to be competitive with the Chinese when it comes to producing, you know, these rare earth products as you go through the supply chain. You know, our belief is that for all the reasons I've mentioned before, you know, we feel we can be, you know, right in there, be very competitive, you know, even at the published Chinese prices.
Now, you know, that can be very volatile, as we know, and history has shown. But you know, we're gearing towards the most you know economic position we can get in, because we fully appreciate that being low on the cost curve is very important, and we do not believe we'll be high on the cost curve with what we're seeing today. But it all is driven on, like I said, getting that flywheel moving. The Chinese got into the trihydrate monazite just a few years ago, and you know, we're just kind of replicating that. I mean, probably not at the scale. We're not looking at the scale of the Chinese.
We're really mainly focused on, you know, let's look at how we can, you know, put ourselves in a good position in the United States right now. And you know, that's where we're at.
Right. Is there any way that you could tell me, not necessarily for your operation, but for, let's say, a generic 15,000 ton per year feed monazite ore operation that had a $100 million separation facility, what kind of revenue would they be- would you be generating based on, I guess, the recoveries and that you would be getting from that ore, given the grades that you've given? Yeah, yeah.
I would say $100 of millions.
Okay. All right.
Look, you can figure out, you know, sort of crudely from some of these pricing things, but if you had 15,000 tons of 50-55%, and, you know, that puts you at, you know, 7,000 tons or 7,500 tons of recovered at total rare earths or somewhere in that order. And you can multiply times the, you know, NdPr at about 0.22 or so, and you can start getting some ideas of what it would look like.
Yeah, I know that's those are contained numbers, though, so I was just trying to get an idea from your answer, what you were expecting in terms of recoveries. Because that's the math I'm trying to do, but the recoveries are gonna be, you know, at some haircut on that basic math. Okay. Okay, well, yeah, I think that's it for me. Thanks, guys. I appreciate it.
Thank you. Next question will be from Joseph Reagor at Roth Capital Partners. Please go ahead.
Hey, Mark and team, thanks for taking all the questions. I think most of what I wanted to touch on has, has already been asked. But I guess, thinking longer term, you were saying that, you know, it might be $100 million to get into the separation business. You know, what would you need to see in order to make that kind of decision? And if it were that number, you know, how would you guys go about financing that?
Well, you know, as I said earlier, we, we've gotta have the feed to justify the investment. I think that, you know, once we have, you know, the feed or at least line of sight to the feed, I think that it becomes a fairly straightforward process. Now, when it comes to, to financing, you know, there's a number of different options. You know, we can, you know, partner with somebody, we can joint venture, we can bank finance. We're not necessarily looking at equity, but, if you look at it, you know, that's basically what Mountain Pass is, you know, generated a bunch of equity for about $500 million in U.S. equity, and, or, you know, an offtaker on the downstream.
So, you know, we haven't gotten that far, but, you know, as I said, given the adequate feed, we don't think it will be a long stretch on how to finance it and what options might be in front of us. So, we, you know, we're not worried about being able to finance the next steps, given adequate feed, you know, looking to the future.
Okay. Maybe just kind of a slightly different approach to part of it. When you guys think about these types of investments, is there like an IRR threshold or something that you're looking to, you know, minimally achieve in order to, you know, to make larger capital investments?
Yeah. You know, I think most people would look at, you know, an IRR of, you know, 20%-ish or something, but again, I don't wanna be, you know, nailed down, you know, exactly what our, you know, investment criteria will be at this stage. You know, we are looking at, you know, materials that have been declared a, like, a national emergency because there's a shortage of it. You know, I don't know what role, if any, that the government might play in this. You know, there may be some options for loan guarantees with the U.S. government. Maybe the government decides they wanna buy some of these materials for their own uses or stockpiles.
So there's just a lot of moving pieces here that, and I think it's not really material to get into any detail at this point in time.
Okay, fair enough. I'll turn it over. Thank you.
Thank you. Next question will be from Frederick Kozak at InvestorIntel. Please go ahead.
Thank you. Mark, not to get too into the weeds on the, on the economic side, but can you maybe just expand a little bit on how you are processing the ore in your facility? Obviously, you know, your facility has significant capacity at 2,000 tons per day. How does that work, and how does that drive your economics?
Well, how does it work? And I don't wanna get into all the details. Obviously, as you said, not get in the weeds, but, yeah, we're basically using an existing tankage and infrastructure for things like, you know, creating the heat for the leach circuit. It's basically, you know, we're looking at a caustic crack using caustic soda, and we heat that, and we basically liberate the uranium and the rare earths, and we take it through the process from there. So, it's-- We're pretty much focused on, you know, existing kind of known means of processing using existing infrastructure.
and, and so we use the solvent extraction to recover our uranium. So, so it's, it's just standard, process technologies using existing equipment. And as I said, you know, $2 million or so, just minor, minor little bits and pieces here and pumps and whatnot. minimal modifications to existing equipment to achieve, you know, these initial outcomes.
Okay. So, when you talk about just running on a break-even basis next year, are you batching, what, 1,000-ton batches, or how do you get to sort of that break-even number?
... Yeah. Look, look, I don't wanna get into, you know, batch sizes and everything. I mentioned-
Okay.
going from 4 tons to, you know, 20 tons, and a lot of its gonna depend on the schedule that Chemours has for being able to deliver us material. But, you know, it will be going into, you know, 100 tons, 500 tons, 1,000 tons, you know, over the course of the year as we get more experienced, as we ramp this up.
Okay, okay. Hey, just one more quick question. When you're transporting the ore from Florida or Georgia, are there any transportation issues, any permitting issues that you guys have to deal with? I know you've been doing this for a while.
Not that I know off the top of my head. Dave, Curtis, I don't think there's any. This is just normal business for us.
Got it.
Yeah.
Okay, thanks. That's my, that's my question.
Thank you. As a reminder, ladies and gentlemen, if you have a question, you will need to press star one. And your next question is a follow-up from Mark Reichman at Noble Capital Markets. Please go ahead.
Yeah, my follow-up is, in order to make the investment in the separation and the alloy circuits, what level of production would you need to be at to justify that kind of investment? In other words, would 15,000 tons do it, or would you need to be producing at a higher rate to justify the investment?
Yeah. Yeah, Mark, again, I don't want to get into that kind of detail, but I can tell you that 15,000 tons of feed would definitely do it. It'd be much lesser quantity, in my opinion, to start really looking at, at least, you know, certain investments. I don't wanna be nailed down on quantities, but, you know, I think that 15,000 tons of monazite feed would definitely do it. But, as I said, I wanna be more accurate than that. Until we still need to get engineered reviews on. We'll probably look at a scoping study in 2021, as I mentioned.
You know, some of the feedback we've been getting is coming from, you know, people like Neo and Constantine and Jack and Brock O'Kelley, who've been in the rare earth business, you know, for decades and decades. So you know, some of these numbers that we're using are more just based on their experience, so. But until we can look at those in detail, give ourselves some credits on things like the infrastructure that's already in place.
You know, the cost of labor, as I mentioned, things like that, it's really impossible to kind of tag this with any accuracy.
Okay. Thank you.
Thank you. Next question. I'm sorry, at this time, sir, we have no further questions. Please proceed.
Well, in closing, I just again wanna thank people for their interest in this project. You know, we're not leaving the uranium industry. You know, we believe we're best positioned of any company in the United States on the uranium front. And we still are very proud of the strong balance sheet we have and no debt. But this is an exciting space. I always tell people that we will be aggressive but not reckless. We know how to align with the right people and, but we're gonna be entrepreneurial here, and we're thinking big.
But I can guarantee that, you know, we will be focusing on getting the best value to our shareholders in any way we can, and also do the right things for the United States when it comes to critical materials. Also, we will continue to focus on trying to assist with the cleanup of the Navajo Nation, which is a very personal issue for me. So, we've got a lot of things in play with Energy Fuels, and we think this differentiates us from the peer group, because there is no peer group for Energy Fuels with what we do and how we do things. So, again, thank you for your interest.
Have a great day, stay safe, and look forward to giving more updates, hopefully, in the not-too-distant future on all things uranium, rare earths, and some of these other things we're working on. Thank you. Bye.
Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending, and at this time, we do ask that you please disconnect your lines.