Impact: Very Positive
Energy Fuels announced that the Government of Madagascar has lifted the suspension over development activities over EFR’s 100%-owned Toliara heavy mineral sands project, after development was suspended in 2019 pending negotiation of fiscal and other terms. This decision should allow EFR to recommence development and other technical activities on the ground towards its goal of making a Final Investment Decision in early-2026. Negotiations to formalize the fiscal, stability and other terms, including to add REE mineral production to the mining permit, through an MoU, an investment agreement, amendments to existing laws and other mechanisms are ongoing. We view this news as very positive as it unlocks the project’s development and signals that the Madagascan government is interested in seeing this project developed. We had previously noted that EFR’s acquisition of Base Resources was accretive because it had essentially acquired a US$979M project for US$226M. The lifting of the suspension should soothe investors’ concerns about EFR starting to realize some of the promised value of the project. We look forward to the conclusion of negotiations with the government and to the addition of REE mineral production to the mining permit as a Dec/23 PFS showed that adding a monazite byproduct with a simple bolt-on circuit to the Sep/21 PFS for Il-Ru-Zi production nearly doubled the post-tax NPV10% to US$2B.
