10-Q: Energy Fuels Q2 2025: Losses Mount Amid Strategic Shift

Energy Fuels Inc. reports a significant net loss in Q2 2025 due to lower uranium sales and increased operating costs, while aggressively advancing its critical minerals and medical isotope initiatives.

Summary

• Net loss for Q2 2025 was $21.84 million ($0.10 per share), compared to a net loss of $6.42 million ($0.04 per share) for Q2 2024.
• Net loss for the six months ended June 30, 2025, was $48.16 million ($0.23 per share), compared to a net loss of $2.78 million ($0.02 per share) for the same period in 2024.
• Revenues decreased to $4.21 million in Q2 2025 from $8.72 million in Q2 2024, and to $21.11 million in H1 2025 from $34.15 million in H1 2024, primarily due to lower uranium sales volumes and timing of contract deliveries.
• Operating costs significantly increased across exploration, development, processing, and selling, general, and administration categories, largely due to higher headcount, inflation, and the acquisition of Base Resources.
• Mined approximately 665,000 pounds of U3O8 from the Pinyon Plain, La Sal, and Pandora mines in Q2 2025, bringing the H1 2025 total to approximately 780,000 pounds of contained U3O8.
• Sold 50,000 pounds of uranium in the spot market during Q2 2025 at a realized price of $77.00 per pound.
• Sold 1.2 tonnes of separated NdPr to POSCO International for sampling, offsetting $0.04 million against commissioning costs.
• Sold 202 tonnes of rutile for $0.28 million in Q2 2025, and total heavy mineral sands sales for H1 2025 were $15.82 million, which resulted in a loss due to processing lower-grade ore at the end of the Kwale mine life.
• Working capital increased from $170.90 million at December 31, 2024, to $253.23 million at June 30, 2025.
• Cash and cash equivalents increased to $71.49 million at June 30, 2025, from $38.60 million at December 31, 2024.
• Marketable securities increased to $134.40 million at June 30, 2025, from $80.85 million at December 31, 2024.
• Acquired RadTran, LLC on August 16, 2024, to develop medical isotopes for cancer treatments.
• Acquired Base Resources Limited on October 2, 2024, adding the Kwale (Kenya) and Toliara (Madagascar) heavy mineral sands/rare earth element projects.
• Formed a joint venture with Astron Corporation Limited on June 3, 2024, to jointly develop the Donald Rare Earth and Mineral Sands Project in Australia.
• Successfully developed technology to produce samarium, gadolinium, dysprosium, terbium, lutetium, and yttrium at the White Mesa Mill.
• Pilot-scale production of heavy rare earth oxides is underway, with a 1-kilogram sample of dysprosium (Dy) oxide expected by mid-August 2025 and 15 kilograms by September 30, 2025.
• A 1-kilogram sample of terbium (Tb) oxide is expected by the end of November 2025, and pilot-scale samarium (Sm) oxide production is expected in January 2026.
• Revised 2025 uranium sales guidance upwards to 350,000 pounds of U3O8 (from 220,000 pounds).
• Expected 2025 total uranium production guidance is 700,000 to 1,000,000 pounds of finished U3O8.
• Projected year-end 2025 total uranium inventory (contained in ore and finished product) is 1,985,000 to 2,585,000 pounds of U3O8.
• Anticipated mining and transportation costs for Pinyon Plain ore are $10-$14 per pound of recovered U3O8, with milling costs of $13-$16 per pound, leading to an expected total weighted average cost of goods sold of $23-$30 per pound.
• Current finished U3O8 inventory has a weighted average cost of $53.00 per pound.
• Expected cost of goods sold for U3O8 sales through the end of 2025 is $50-$55 per pound, projected to drop to $30-$40 per pound in Q1 2026.

Sentiment

Score: 4

Explanation: While the company is strategically positioning itself for future growth in critical minerals with significant project advancements and strong long-term market outlooks for uranium and REEs, the current financial results show a substantial increase in net loss and decrease in revenue, coupled with rising operating costs. The positive long-term outlook is heavily reliant on successful project development, market conditions, and securing favorable agreements, which still carry significant risks and uncertainties.

Positives

• Significantly increased cash and marketable securities, strengthening the balance sheet and providing financial flexibility.
• Successfully developed technology for the production of critical heavy rare earth elements (Sm, Gd, Dy, Tb, Lu, Y) at the White Mesa Mill.
• Initiated pilot-scale production of dysprosium and terbium oxides, with samarium production expected in early 2026, demonstrating progress towards diversified REE capabilities.
• Mined high-grade uranium ore at the Pinyon Plain mine (2.23% eU3O8 average grade in Q2 2025), which is believed to be one of the highest-grade uranium mines in U.S. history.
• Initial drilling results from the Juniper Zone at Pinyon Plain indicate additional high-grade uranium mineralization, with potential to significantly increase mineable resources and lower future mining costs.
• Increased 2025 uranium sales guidance to 350,000 pounds of U3O8, reflecting stronger demand and contract fulfillment.
• Projected future uranium production costs from the Pinyon Plain mine ($23-$30 per pound) are expected to be among the lowest globally, indicating strong future profitability potential.
• Strategic acquisitions of Base Resources (Toliara and Kwale projects) and RadTran, along with the Donald Project joint venture, significantly expand the company's portfolio in heavy mineral sands, rare earth elements, and medical isotopes.
• The Government of Madagascar lifted the suspension on the Toliara Project, and a Memorandum of Understanding (MOU) has been signed, paving the way for its development.
• The Donald Project has all major regulatory approvals required for construction and operation, de-risking its development pathway.
• Secured four long-term uranium contracts with major U.S. utilities, providing revenue stability and predictability through 2030.
• Maintains flexibility to blend various sources of uranium feeds (mined ore, alternate feed materials, purchased ore) to optimize production and meet contract requirements.
• The San Juan County Clean Energy Foundation, funded by 1% of the Mill's revenues, provides ongoing support to local communities, enhancing social license to operate.

Negatives

• Reported a substantial increase in net loss for both Q2 2025 ($21.84 million) and H1 2025 ($48.16 million) compared to prior periods.
• Experienced a significant decrease in revenues for Q2 2025 (52% decline) and H1 2025 (38% decline) primarily due to lower uranium sales volumes and the timing of contract deliveries.
• Operating costs rose sharply across all segments, driven by increased headcount, inflationary pressures, and expenses related to the integration of recent acquisitions.
• Heavy mineral sands sales from the Kwale Project resulted in a gross loss due to the processing of lower-grade ore at the end of the mine's life.
• The current weighted average cost of finished uranium inventory ($53.00 per pound) is higher than the expected future production costs from the Pinyon Plain mine, which will impact near-term gross margins.
• Uncertainty persists regarding the finalization of legal and fiscal stability arrangements for the Toliara Project with the Government of Madagascar.
• The White Mesa Mill's Phase 1 REE separation circuit cannot simultaneously process uranium/vanadium ores and monazite for REEs due to shared facilities, requiring careful scheduling.
• Vanadium sales were zero during the six months ended June 30, 2025, and sales are generally at spot prices, limiting revenue predictability.
• Profits from rare earth element initiatives are expected to remain minimal until throughput rates are significantly increased and optimized, projected for the 2027-2028 timeframe.
• The global pigment market for heavy mineral sands remains subdued, leading to declining demand and price erosion for ilmenite and rutile.
• Zircon demand continues to be weak, particularly in China, due to a sluggish economy and construction market.

Risks

• Global economic risks, including unforeseen or catastrophic events like political unrest, wars, widespread health emergencies, or the imposition of tariffs, could disrupt business, operations, personnel, and financial condition.
• Cybersecurity risks associated with critical and highly sensitive minerals of international interest.
• Litigation risks, including ongoing administrative appeals and petitions challenging the White Mesa Mill's permits and operations, and disputes related to the Kwale Project.
• Risks associated with the restart and subsequent operation of uranium, uranium/vanadium, and REE/HMS mines, including geological, technical, and processing problems, unanticipated metallurgical difficulties, less than expected recoveries, ground control problems, process upsets, equipment malfunctions, and tailings/facility instability.
• Risk that the high grades and increased mining rates experienced at the Pinyon Plain mine during Q2 2025 will not persist.
• Risk that initial drilling results from the Juniper Zone at the Pinyon Plain mine will not significantly increase mineable uranium resources or result in lower mining and milling costs.
• Depletion of existing Mineral Resources through extraction without comparable replacements.
• Risks associated with labor costs, labor disturbances, and unavailability of skilled labor.
• Risks associated with the availability and/or fluctuations in the costs of raw materials and consumables.
• Environmental compliance and permitting risks, including changes in legislation, regulatory attitudes, and delays in obtaining permits and licenses.
• Increased regulatory requirements applicable to operations.
• Dependence on third parties for transportation and other critical services.
• Risks associated with defects to title of mineral properties or the ability to obtain, extend, or renew land tenure on favorable terms.
• Potential information security incidents, including cybersecurity breaches.
• Risk of compromising or losing proprietary technology or intellectual property.
• Inability to successfully develop, attract, and retain qualified management, Board members, and other key personnel.
• Competition for capital, mineral properties, and skilled personnel.
• Adequacy and costs of insurance coverage, and uncertainty as to reclamation and decommissioning liabilities.
• The ability of bonding companies to require increases in collateral for reclamation obligations.
• The potential for, and outcome of, litigation and other legal proceedings, including potential injunctions.
• Ability to meet obligations to creditors and access credit facilities on favorable terms.
• Failure to complete proposed mergers and acquisitions (M&A), successfully integrate after M&A transactions, and/or incorrectly assess the value or risks associated with M&A.
• International risks, including geopolitical and country risks (e.g., Madagascar, Kenya, Brazil).
• Risks associated with the failure of the Government of Madagascar to formalize fiscal and other terms for the Toliara Project, or to add monazite to the mining permit.
• Risks associated with potential community unrest at or near the Toliara Project site.
• Expropriation risks in foreign countries.
• Human rights-related risks (forced labor, child labor, sex trafficking) and foreign corrupt practices.
• Risks associated with Brazilian federal or state government actions regarding permitting or environmental protection areas for the Bahia Project.
• Fluctuations in price levels for heavy mineral sands products (ilmenite, rutile, titanium, zircon).
• Risks posed by fluctuations in share prices, exchange rates, interest rates, general economic conditions, and lack of dividends.
• Inherent uncertainties in forecasts/predictions of future commodity price levels (uranium, vanadium, REEs, HMS).
• Risk that future uranium sales may be required to be made at spot prices if new long-term contracts are not secured at satisfactory prices.
• Risk that vanadium and REE product sales will generally be required to be made at spot prices.
• Risk that HMC and its component sales will be tied to spot prices.
• Failure to obtain suitable sales terms for any products.
• Risk of being required to fulfill sales commitments through spot purchases at a loss or other unfavorable means.
• Risks associated with the potential recovery of radioisotopes at the Mill for targeted alpha therapy (TAT) initiatives, including technological/market changes, feasibility, commercial sales, regulatory approvals, and commercial success of therapeutics.
• Risk of not acquiring the planned joint venture interest in the Donald Project, or that the Bahia, Toliara, and/or Donald Projects will not reach a positive Final Investment Decision (FID) or be developed.
• Risks related to potentially higher than expected costs for any projects or facilities.
• Risks related to stock price, volume volatility, and the ability to maintain listings in various stock indices.
• Risks related to dilution of currently outstanding shares from additional share issuances, including under the At-the-Market (ATM) program.
• Risks related to accounting for equity investments potentially resulting in material changes to financial results not fully within control.
• Risks related to conducting business operations in foreign countries, including heightened risks of expropriation, business interruption, increased taxation, import/export controls, or unilateral modification of concessions and contracts.
• Risks related to any material weaknesses identified in internal controls over financial reporting.
• Risks of amendment to mining laws, including the imposition of royalties on federal lands, designation of national monuments, or mineral withdrawals.
• Risks of land exchanges between federal and state agencies impacting unpatented mining claims.

Future Outlook

The company expects to increase uranium production to 700,000-1,000,000 pounds of finished U3O8 in 2025, with sales guidance of 350,000 pounds. It plans a conventional ore processing campaign in Q4 2025 extending into Q1 2026, aiming for 1.1-1.4 million pounds of U3O8 production at significantly lower costs ($23-$30/pound) from the Pinyon Plain mine. The company anticipates increasing gross margins from uranium sales over time. It is advancing its REE initiatives, aiming for commercial-scale heavy REE production (Dy, Tb, Sm) as early as Q4 2026 from existing feed and Q4 2027 from the Donald Project, with Phase 2 REE separation facilities expected by 2028. The Toliara and Donald Projects are targeted for positive FIDs by 2026 and late 2025, respectively. The company is also developing capabilities for commercial-scale Ra-226 production by 2027-2028.

Management Comments

• We responsibly produce several of the critical materials essential to U.S. energy security and advanced technologies, including uranium, vanadium, REEs and HMS—helping to reduce reliance on foreign sources and strengthen domestic supply chains.
• The Company believes that uranium supply pressure and demand fundamentals point to higher sustained uranium prices in the future and that the advancement of reliable nuclear energy, fueled by uranium, is experiencing a global resurgence with an increased focus by governments, policymakers, technology companies and citizens on decarbonization, electrification and security of energy supply.
• The Company believes it will mine considerably more uranium from the Main Zone of the deposit versus what is described in the Technical Report on the Pre-Feasibility Study on the Pinyon Plain Project.
• The Company believes these drill results confirm that the Juniper Zone is another high-grade zone of uranium mineralization.
• The Company believes one of the main drivers of V2O5 prices is demand for steel, including global prospects for economic growth, construction, infrastructure and auto manufacturing.
• The Company believes that V2O5 prices will increase once confidence in the Chinese and global economy returns.
• The Company sees its prior commercial production of RE Carbonate and its recent commercial production of separated NdPr in 2024 as the first steps in an effort to restore the REE supply chain in the U.S., where one currently does not exist.
• The Company believes it has sufficient cash and resources to carry out its business plan for at least the next twelve months.

Industry Context

The company operates within the critical minerals sector, highlighting a global resurgence in nuclear energy driven by decarbonization, electrification, and energy security goals, which is increasing demand for uranium. It notes the impact of restrictions on Russian uranium and a trend towards increased long-term contracting. In the Rare Earth Elements (REE) sector, the company positions itself to address global shortages of critical REEs (NdPr, Dy, Tb) and reduce reliance on China, citing industry forecasts for significant demand growth in NdFeB magnets for electric vehicles, robotics, and advanced air mobility. For Heavy Mineral Sands (HMS), the market is currently subdued due to prevailing economic weakness, but the company anticipates positive long-term fundamentals driven by recoveries in construction and urbanization. Additionally, the company identifies a significant opportunity in medical isotopes for Targeted Alpha Therapy (TAT) due to a global shortage of radium and the absence of domestic suppliers.

Comparison to Industry Standards

• The Pinyon Plain mine's average grade of 2.23% eU3O8 in Q2 2025 is believed to be 'one of the highest-grade uranium mines in U.S. history'.
• Expected total weighted average cost of goods sold for Pinyon Plain U3O8 ($23-$30 per pound) is anticipated to rank 'among the lowest costs for mined uranium production in the world'.
• Benchmark Mineral Intelligence's X-China dysprosium and terbium prices ($800/kg and $3,625/kg, respectively, as of July 31, 2025) exceed published Chinese prices ($230/kg and $988/kg) by 348% and 367%, reflecting the scarcity of these REE oxides outside of China.
• Adamas Intelligence forecasts demand for separated NdPr, Dy, and Tb to grow at a Compound Annual Growth Rate (CAGR) of 8.7% through 2040, while global production is expected to grow at a slower rate of 5.1%, indicating potential supply constraints.
• The total market for magnet REE oxides is forecasted to increase five-fold from $7.8 billion in 2024 to $44.1 billion by 2040, with prices rising at CAGRs of 4.3% to 5.2%.

Management Changes

Corporate Governance

Legal Proceedings

• **White Mesa Mill Historic Claims**: Ongoing administrative appeals by the Ute Mountain Ute Tribe (filed in 2011, 2013, and 2014) challenging the Mill's Air Quality Approval Order, Corrective Action Plan for nitrate contamination, and Radioactive Materials License Amendment 7. The Company believes these actions lack merit.
• **White Mesa Mill License and GWDP Renewal Challenges**: Petitions for Review filed by Grand Canyon Trust, Ute Mountain Ute Tribe, and Uranium Watch (March 2018) challenging UDEQ's renewal of the Mill's License and Groundwater Discharge Permit (GWDP). Discussions for settlement are ongoing.
• **White Mesa Mill Amendment No. 10 Challenge**: A Petition to Intervene and Petition for Review filed by the Ute Mountain Ute Tribe (August 26, 2021) challenging UDEQ's approval of Amendment No. 10, which expanded the list of Alternate Feed Materials the Mill is authorized to process.
• **Kwale Project Stevedoring Dispute with Kenya Ports Authority (KPA)**: An unresolved dispute where KPA seeks to levy a $1/tonne stevedoring charge on exports from the Company's private Jetty Facility. The Company disputes the charge, arguing no services are provided. An injunction was obtained in 2017, and approximately $4.6 million is in dispute ($3.2 million held in escrow). Arbitration proceedings are ongoing, but a new arbitrator needs to be appointed.
• **Mivumoni B Village (Kwale Project)**: A petition filed by a local landholder (March 18, 2021) alleging failings in the Environmental Impact Assessment (EIA) process for the Kwale Project, claiming excessive noise, air pollution from dust, and contaminated water. The Company denies the allegations, and its preliminary objection challenging jurisdiction was dismissed and upheld on appeal (July 18, 2025).
• **Mchingirini Residents (Kwale Project)**: A petition filed by former local landholders (July 18, 2023) alleging unlawful relocation and inadequate compensation for properties within the Kwale Project's Special Mining Lease 23. The Company denies liability, and its preliminary objection challenging jurisdiction was dismissed (April 12, 2024), with an appeal pending.

Related Party Transactions

• Saleem Drera, PhD, former President and CEO of RadTran, LLC, joined Energy Fuels as Vice President of Radioisotopes, Radiological Systems and Intellectual Property following the acquisition of RadTran. He is entitled to an 83% proportionate share of a 2% royalty on future revenues from the sale of produced radium, and up to an additional $14.00 million in cash and Common Shares based on performance-based milestones.
• The Company accrued $0.76 million as of June 30, 2025, related to deferred cash payments for production thresholds under a mine operating agreement with Consolidated Uranium Inc. (CUR), which began on October 27, 2021.

Stakeholder Impact

• **Shareholders**: Experienced increased net losses and revenue decline in the short term, but benefit from strategic acquisitions and investments aimed at long-term value creation in critical minerals. Potential for dilution exists due to ongoing At-the-Market (ATM) share issuances.
• **Employees**: Increased headcount due to recent acquisitions (e.g., Base Resources), leading to higher salaries and benefits expenses. Additional share-based compensation is being granted to incentivize personnel.
• **Customers (Uranium Utilities)**: Benefit from the Company's continued commitment to fulfilling long-term uranium supply contracts and its efforts to increase production capacity.
• **Local Communities (San Juan County, Utah)**: Receive ongoing financial support through the San Juan County Clean Energy Foundation, which is funded by 1% of the White Mesa Mill's revenues, supporting local initiatives in education, environment, health/wellness, and economic development.
• **Government of Madagascar**: Engaged in ongoing negotiations with the Company to formalize fiscal and other terms for the Toliara Project, which could lead to significant investment and development in the country.
• **Government of Kenya**: Involved in ongoing legal disputes with the Company regarding stevedoring charges and land claims related to the Kwale Project.
• **Navajo Nation**: Potential for collaboration with the Company on the cleanup of Abandoned Uranium Mines (AUMs) from Cold War-era government programs.
• **Pharmaceutical Industry**: Stands to benefit from the Company's efforts to become a domestic supplier of radium for Targeted Alpha Therapy (TAT) cancer treatments, addressing a global shortage of essential isotopes.

Next Steps

• Continue working with the Government of Madagascar to formalize Toliara Project fiscal and other terms through an investment agreement or new law.
• Advance technical, environmental, social, and other activities necessary to achieve a positive Final Investment Decision (FID) for the Toliara Project, expected as early as 2026.
• Update the Toliara Definitive Feasibility Study (DFS) and Prefeasibility Study (PFS) into a combined S-K 1300 and NI 43-101 compliant feasibility study (FS), expected later in 2025.
• Advance permitting and development activities at the Donald Project in Australia in preparation for an FID, expected as early as December 31, 2025.
• Update the 2023 Donald Project JORC-compliant DFS into an S-K 1300 and NI 43-101 compliant FS, expected later in 2025.
• Advance permitting efforts and restart the drilling program at the Bahia Project in Brazil in 2025.
• Aim to declare an S-K 1300-compliant initial assessment and NI 43-101-compliant technical report for the Bahia Project in early 2026.
• Commence a conventional ore processing campaign at the White Mesa Mill in Q4 2025, expected to continue into March 2026.
• Continue to pursue additional Alternate Feed Materials, third-party processing, ore purchases, and other sources of feed for the Mill, including potential material recovered from Abandoned Uranium Mines (AUMs).
• Continue rehabilitation and development work at the Whirlwind mine in preparation for future production.
• Advance permitting and development on the Roca Honda, Bullfrog, and EZ Projects.
• Continue to maintain required permits at other conventional projects, including the Energy Queen mine.
• Incorporate Juniper Zone drill results into an updated S-K 1300/NI 43-101 technical report for the Pinyon Plain mine later this year.
• Undertake exploration and development activities at the Nichols Ranch ISR Project to expand resources and further develop wellfields.
• Continue to evaluate additional spot and/or long-term uranium sales opportunities.
• Continue to evaluate the potential to complete opportunistic purchases of uranium.
• Continue to qualify the separated NdPr product with REE metal and magnet manufacturers.
• Evaluate producing dysprosium, terbium, and samarium on a commercial scale at the existing Phase 1 REE separation circuit at the Mill, with minor modifications, as early as Q4 2026.
• Advance engineering and permitting on Phase 2 REE separation facilities at the Mill, expected to be completed in 2028.
• Evaluate the potential to produce other downstream REE materials, including REE metals and alloys.
• Complete process development engineering for Ra-226 production.
• Set up the first stages of the pilot facility and produce R&D quantities of Ra-226 for testing by end-users.
• Develop capabilities at the Mill for the commercial-scale production of Ra-226 in 2027-2028.
• Apply for a license to concentrate R&D quantities of Ra-228 at the Mill and perform engineering on its process development and R&D pilot facility.
• Continue reclamation activities at the Kwale Project, with Central Dune, North Dune, and Bumamani mining areas scheduled for completion in 2025, and tailings storage facility reclamation by 2027, with ongoing management and monitoring through 2037.

Key Dates

Recommendation

While the company reported a significant net loss and revenue decline in the current period, these are largely attributable to strategic decisions to stockpile uranium for future higher-margin sales and the integration costs of recent acquisitions. The long-term outlook is strong, with the company positioning itself as a key player in critical minerals (uranium, REE, medical isotopes) with promising projects (Pinyon Plain, Toliara, Donald, RadTran) and expected low future production costs for uranium. However, the execution of these large-scale projects carries inherent risks, including regulatory approvals, financing, and market conditions. The current financial performance is weak, but the strategic moves and future potential warrant holding the stock for long-term appreciation, rather than a strong buy given the current losses and execution risks, or a sell given the strong strategic positioning.

Keywords

Uranium, Rare Earth Elements, Heavy Mineral Sands, Critical Minerals, Nuclear Energy, Mining, NdPr, Dysprosium, Terbium, Monazite, White Mesa Mill, Pinyon Plain, Toliara Project, Donald Project, Bahia Project, RadTran, Medical Isotopes, Targeted Alpha Therapy, SEC Filing, 10-Q