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Energy Fuels Completes Acquisition of Base Resources for $178M
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Energy Fuels (UUUU - Free Report) has acquired Base Resources Limited in exchange for the issuance of its shares totaling $178.4 million in value. The acquisition adds Base Resources’ Toliara Mineral Sand Project to UUUU’s portfolio, complementing its Bahia Mineral Sand Project in Brazil.
These assets, combined with Energy Fuel’s 49% interest in the joint venture to develop the Donald Mineral Sand Project in Australia, will position it as a major producer of rare earth elements (REE), titanium and zirconium. This marks Energy Fuels' effort to diversify its business by expanding its REE production capabilities while maintaining its leadership in uranium.
Energy Fuels Aims to Position Itself for Long-Term Growth in REE
Energy Fuels agreed to acquire Base Resources in April 2024. Base Resources' Toliara project in Madagascar is a world-class, low-cost and large-scale heavy mineral sands project. Apart from its ilmenite, rutile (titanium) and zircon (zirconium) production capability, the project contains a significant amount of monazite. It is a source of the magnet REEs (NdPr, Dy, Tb) used in electric vehicles (EVs) and a variety of clean energy and advanced technologies.
Energy Fuels’ efforts to grow its REE business have been perceived as risky as the sector is highly competitive due to the significant control by China. This raised concerns that the company’s investment returns might fall short of its projections.
The REE market is, however, projected to see solid growth, given the elements’ crucial role in technologies such as EVs, wind turbines and advanced electronics. Energy Fuels’ White Mesa Mill in Utah is the only facility in the United States that can process monazite and produce advanced REE materials. With more than four decades of unmatched experience and expertise in the industry, it is poised well to capitalize on this demand. The increasing focus on developing rare earth supply chains independent of China presents a solid opportunity for UUUU.
UUUU to Ride on Clean Energy Trends
The global push for clean energy and technological advancement will drive significant demand for both uranium and REE.
Energy Fuels has four long-term contracts with major U.S. nuclear utilities that require deliveries of base quantities of 2.8 million pounds of uranium through 2030. The company has been preparing two additional mines in Colorado and Wyoming (Whirlwind and Nichols Ranch) to boost uranium production. It recently reported solid progress in Nichols Ranch, which is expected to start production in 2025. It has a licensed annual capacity of 2 million pounds of uranium.
UUUU is also advancing several other large-scale U.S. mine projects to raise the capacity to 5 million pounds per year to bet on the robust uranium market conditions. The company expects to commence an ore-buying program from third-party miners in 2024, which is expected to boost its uranium production profile further.
The company recently completed a Phase 1 REE separation circuit at the White Mesa mill with the capacity to produce up to 1,000 tons per year of separated neodymium praseodymium (NdPr), making it one of the world's largest commercial REE separation circuits, except in China. It is designing the capacity to produce 4,000-6,000 tons of separated Ndpr per year and 200-300 tons of Dy and Tb that will be enough for up to 6 million EVs per year.
Energy Fuels Stock’s Price Performance
Shares of Energy Fuels have lost 25.7% in the past year against the industry's 50.3% growth.
Image Source: Zacks Investment Research
UUUU’s Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for Carpenter Technology’s fiscal 2025 earnings is pegged at $6.06 per share. The consensus estimate for earnings has moved 17% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 15.9%. CRS’ shares have gained 136% in a year.
The consensus estimate for Idaho Strategic Resources’ fiscal 2024 earnings is pegged at 72 cents per share. The consensus estimate for earnings has moved up 167% in the past 60 days. It has an average trailing four-quarter earnings surprise of 116.6%. IDR’s shares have soared 247% in a year.
The Zacks Consensus Estimate for IAMGOLD’s 2024 earnings is pegged at 39 cents per share. The consensus estimate for earnings has moved 44% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 200%. IAG’s shares have gained 147% in a year.
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Energy Fuels Completes Acquisition of Base Resources for $178M
Energy Fuels (UUUU - Free Report) has acquired Base Resources Limited in exchange for the issuance of its shares totaling $178.4 million in value. The acquisition adds Base Resources’ Toliara Mineral Sand Project to UUUU’s portfolio, complementing its Bahia Mineral Sand Project in Brazil.
These assets, combined with Energy Fuel’s 49% interest in the joint venture to develop the Donald Mineral Sand Project in Australia, will position it as a major producer of rare earth elements (REE), titanium and zirconium. This marks Energy Fuels' effort to diversify its business by expanding its REE production capabilities while maintaining its leadership in uranium.
Energy Fuels Aims to Position Itself for Long-Term Growth in REE
Energy Fuels agreed to acquire Base Resources in April 2024. Base Resources' Toliara project in Madagascar is a world-class, low-cost and large-scale heavy mineral sands project. Apart from its ilmenite, rutile (titanium) and zircon (zirconium) production capability, the project contains a significant amount of monazite. It is a source of the magnet REEs (NdPr, Dy, Tb) used in electric vehicles (EVs) and a variety of clean energy and advanced technologies.
Energy Fuels’ efforts to grow its REE business have been perceived as risky as the sector is highly competitive due to the significant control by China. This raised concerns that the company’s investment returns might fall short of its projections.
The REE market is, however, projected to see solid growth, given the elements’ crucial role in technologies such as EVs, wind turbines and advanced electronics. Energy Fuels’ White Mesa Mill in Utah is the only facility in the United States that can process monazite and produce advanced REE materials. With more than four decades of unmatched experience and expertise in the industry, it is poised well to capitalize on this demand. The increasing focus on developing rare earth supply chains independent of China presents a solid opportunity for UUUU.
UUUU to Ride on Clean Energy Trends
The global push for clean energy and technological advancement will drive significant demand for both uranium and REE.
Energy Fuels has four long-term contracts with major U.S. nuclear utilities that require deliveries of base quantities of 2.8 million pounds of uranium through 2030. The company has been preparing two additional mines in Colorado and Wyoming (Whirlwind and Nichols Ranch) to boost uranium production. It recently reported solid progress in Nichols Ranch, which is expected to start production in 2025. It has a licensed annual capacity of 2 million pounds of uranium.
UUUU is also advancing several other large-scale U.S. mine projects to raise the capacity to 5 million pounds per year to bet on the robust uranium market conditions. The company expects to commence an ore-buying program from third-party miners in 2024, which is expected to boost its uranium production profile further.
The company recently completed a Phase 1 REE separation circuit at the White Mesa mill with the capacity to produce up to 1,000 tons per year of separated neodymium praseodymium (NdPr), making it one of the world's largest commercial REE separation circuits, except in China. It is designing the capacity to produce 4,000-6,000 tons of separated Ndpr per year and 200-300 tons of Dy and Tb that will be enough for up to 6 million EVs per year.
Energy Fuels Stock’s Price Performance
Shares of Energy Fuels have lost 25.7% in the past year against the industry's 50.3% growth.
UUUU’s Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the basic materials space are Carpenter Technology Corporation (CRS - Free Report) , Idaho Strategic Resources (IDR - Free Report) and IAMGOLD Corporation (IAG - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Carpenter Technology’s fiscal 2025 earnings is pegged at $6.06 per share. The consensus estimate for earnings has moved 17% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 15.9%. CRS’ shares have gained 136% in a year.
The consensus estimate for Idaho Strategic Resources’ fiscal 2024 earnings is pegged at 72 cents per share. The consensus estimate for earnings has moved up 167% in the past 60 days. It has an average trailing four-quarter earnings surprise of 116.6%. IDR’s shares have soared 247% in a year.
The Zacks Consensus Estimate for IAMGOLD’s 2024 earnings is pegged at 39 cents per share. The consensus estimate for earnings has moved 44% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 200%. IAG’s shares have gained 147% in a year.