Impact: Sightly Positive
Energy Fuels has been awarded a contract to sell US$18.5M worth of U3O8 concentrate to the US uranium reserve, signaling that the reserve program is finally getting off the ground. This program is to help ease the 40% reliance on Russian and allied uranium sources. EFR has also applied for membership to the DOE’s newly created HALEU consortium. While the volume of material was not provided, we estimate the sale may represent up to ~360k to 385k lb U3O8, ~50% of EFR’s current inventory level of 760k lb U3O8. We view this long-awaited news positively as we expect ~US$75M worth of purchases to be made by the US Government this year, potentially increasing to US$150M p.a. moving forward, boding well for US producing uranium companies that are likely to consider the uranium reserve as part of its future sales mix.
