Dear Charlotte:
In a recent interview with Streetwise Reports, Versant Partners Analyst Rob Chang discussed Energy Fuels' (TSX - EFR) pending acquisition of Denison Mines Corp.'s (TSX - DML) U.S. assets. This acquisition will make Energy Fuels an immediate U.S. producer of uranium and vanadium.
We thought you might be interested in reading Mr. Chang's commentsAnalyst . Please click here to view the entire interview.
With regard to the acquisition of Denison's U.S. portfolio, Mr. Chang believes that "people should recognize Energy Fuels as a big winner given that it has established itself as the premier [uranium] producer in the U.S." He continues: "There aren't many producers out there, and Energy Fuels is a new producer on the block. I can see the company commanding a premium once the dust settles."
Please scroll down to see all of Mr. Chang's comments on Energy Fuels.
GRS
________________________________________________
Gary R. Steele
Executive Vice President - Corporate Marketing
g.steele@energyfuels.com
303-974-2147 ofc.
303-956-2100 cell
TSX: EFR
Energy Fuels Resources Corp., 44 Union Blvd., Suite 600,
Lakewood, CO 80228
www.energyfuels.com
________________________________________________
RC: As you know, Energy Fuels acquired the U.S. assets of Denison Mines, but Denison has been getting most of the publicity because it is basically cleaning itself up to be acquired by Rio Tinto (RIO:NYSE; RIO:ASX) for its Athabasca assets. However, people should be recognizing Energy Fuels as a big winner given that it has established itself as the premier producer in the U.S. That's pretty significant, because the U.S. is the largest consumer of uranium. The U.S. consumes over 50 million pounds (50 Mlb), but it only produces 4 Mlb/year. So there's a massive shortfall between U.S. demand and supply. Security of supply is always going to be important for power generation.
Another thing is that Energy Fuels acquired the White Mesa mill from Denison, which allows it to put its Energy Queen and Whirlwind mines into production. Those are two turn-key mines that could be turned on within a year of the production decision. Those two mines are basically on pause while Energy Fuels clears all of the permitting and rebuilding hurdles for the Pi�on Ridge mill, but now that it has acquired the White Mesa mill, it no longer needs to wait for Pi�on Ridge. It can just go and process everything through there. So, unlocking those two mines will allow it to produce over 1 Mlb/year in the U.S. and provide immediate upside. There aren't that many producers out there, and Energy Fuels is a new producer on the block. I can see the company commanding a premium once the dust settles.
TER: Your target price on Energy Fuels is $1.10, which is an implied 300% return from here. Do you believe that startup of these two turn-key mines is going to be the catalyst for that kind of move?
RC: It's one of many catalysts. It's a near-term producer now, so that is also factoring the net asset value (NAV) of the production coming from those mines. It factors in all revenue streams coming into the company. The reason why, in my opinion, Energy Fuels has been trading this low is that uranium has been out of favor and Energy Fuels has been viewed previously as a developer that was not producing and still needed a permit. These hurdles have been addressed, improved upon or eliminated. I think once people give Energy Fuels a good hard look, they will realize it's significantly undervalued.
The overall market has been pretty negative, so investors are pretty reluctant to deploy capital. And they generally prefer producing companies that are large and subsequently safer. Energy Fuels has historically been a developer, but will be a producer after the deal closes. For this combination of reasons, it is not moving up as much as it should be. I believe that this is temporary and when sanity returns to the market, Energy Fuels will rise.
.