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Energy Fuels (UUUU) Gets $18.5M Government Uranium Contract

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Energy Fuels Inc. (UUUU - Free Report) has announced that it has been awarded an $18.5-million contract to sell natural uranium concentrates ("U3O8") to the U.S. National Nuclear Security Administration ("NNSA") for the establishment of a strategic uranium reserve. The company also announced that it applied for membership in DOE HALEU Consortium to support fuel for next-generation advanced nuclear reactors

Energy Fuels expects to complete the sale to NNSA in the first quarter of 2023. The uranium to be sold is currently held in its inventory at the Metropolis Works Conversion Facility, located in Metropolis, IL.

The U.S. National Nuclear Security Administration ("NNSA"), a semi-autonomous agency within the U.S. Department of Energy ("DOE"), has been setting up a Uranium Reserve. It is intended to be a backup of the uranium supply for nuclear power plants in case of any market disruption and to lower the dependency on uranium supply from Russia. NNSA intends to purchase up to an estimated one million pounds of domestically produced uranium through up to four awards of 100,000-500,000 pounds of uranium.

UUUU also announced its application for a membership in the DOE's HALEU Consortium. The HALEU Consortium is a newly created program managed by the DOE's office of Nuclear Energy to help create a stream of domestic supply of high-assay, low-enriched uranium ("HALEU").

HALEU is used by many of the next generations of advanced nuclear reactor technologies. It enables many advanced reactor designs to be smaller and more efficient than traditional ones.

There have been reported delays in the development of advanced reactors due to the lack of domestic supply of HALEU. As the leading producer of uranium in the United States, and the owner and operator of the only conventional uranium mill in the nation, Energy Fuels will likely play a pivotal role in advising the DOE and teaming with other companies for this critical program. UUUU is pursuing other DOE priorities related to uranium production, including rare earth elements and medical isotope production.

Price Performance

 

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Energy Fuel’s shares have lost 16.9% in the past year against the industry’s 4% growth.

Zacks Rank & Key Picks

Energy Fuels currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the basic materials space are Sociedad Quimica y Minera (SQM - Free Report) , Innospec (IOSP - Free Report) and Reliance Steel (RS - Free Report) . While SQM sports a Zacks Rank #1 (Strong Buy) at present, ISOP and RS carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Sociedad’s 2022 earnings per share is pegged at $13.13, suggesting 540.5% growth from the year-ago reported figure. Earnings estimates have moved 1.5% north in the past 60 days. SQM has a trailing four-quarter earnings surprise of 37.4%, on average. Its shares have surged 79.9% in the past year.

The Zacks Consensus Estimate for Innospec’s current-year earnings is pegged at $6.26. The consensus estimate indicates year-over-year earnings growth of 30.4%. Earnings estimates have been revised 5.6% upward in the past 60 days. IOSP has a trailing four-quarter earnings surprise of 25.6%, on average. Shares of IOSP have gained 19.8% in a year.

Reliance Steel expects earnings of $28.71 per share for the current year, indicating year-over-year growth rate of 29.8%. The consensus estimate for RS’ earnings for the current year has been revised 0.06% upward in the past 60 days. It has a trailing four-quarter average surprise of 13.6% on average. RS has gained 31.1% in a year.


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