Sunday, April 15, 2007

April 15 Uranium Stocks Update: Energy Fuels (TSE:EFR)

In the past week, Energy Fuels has broken out of its consolidation phase to the upside. Several drivers can be attributed, including a recent filing that the Resolute Performance Fund-a $750 million private mutual fund with $150,000Cdn minimum initial purchase and a 70% compounded return since 2005-had bought a 11.4% stake in the company back in the middle of December 2006. In addition, the stock rose double digits when president and CEO George Glasier went on Canada's Business News Network last Friday to espouse the virtues of his potential uranium producer. Below is an excerpt of the interview:

George Glasier, president and CEO, Energy Fuels Inc.

Uranium Regions in the US
We are in three states right now, Colorado, Utah, and Arizona. These states produce significant amounts of uranium. The original company that I was with was Energy Fuels, the largest uranium producer in the United States, produced about 5 million lbs/year, twice as big as next largest producer in the US. The area of Colorado was the first area where uranium was produced in North America, occurred in the 1940s with the first weapons programs.

Near-term Projects
We have our first mine refurbished, production coming out this year from Whirlwind mine in Colorado. Second mine will be in Utah, Energy Queen mine. Tenderfoot Mesa to come out early 2008. Since these are mines that are already developed, CapEx for Energy Queen $1.5 million, the others $1 million, includes all rehabilitation and equipment needed. Drilling budgets $2 million on all of our properties.

Funding
We had a raise of $30 million December of 2006, plenty of cash to do everything that we need to do, including putting our first production on the ground at the mill. With our cash position we are completely set to go forward with all of our plans

Acquisitions
We are still acquiring properties, have a number under negotiation. We have the database for virtually all properties in Colorado, Arizona, and Utah. So with the database we judge which properties have merit and we pick up properties which can be put into production fairly quickly, within next two to three years.

When Profitable?
Soon as we start milling production, as early as 2008. We only need uranium to be about $30/lb to be profitable, wiggle room given uranium is $113/lb now.


Outlook

Although there might be some short-term downward selling pressure due to the emergence of free trading shares from the previous financing and some investors wanting to book profits from the latest move, Energy Fuels looks very well-positioned right now. Execution is the key here as this company needs to prove that it can indeed be a uranium producer in short order.


 

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