Q1 2024 Energy Fuels Inc Earnings Call

Participants

Mark Chalmers; President, Chief Executive Officer, Director; Energy Fuels Inc

Curtis Moore; Vice President - Marketing and Corporate Development; Energy Fuels Inc

Matthew Key; Analyst; B. Riley

Joseph Reagor; Managing Director, Senior Research Analyst; Roth Capital Partners LLC

Mike Heim; Analyst; Nobale Capital Markets

Graham Tanaka; Analyst; Tanaka Capital Management

Presentation

Operator

Good morning. My name is Julie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Energy Fuels' First Quarter 2024 conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star then the number one on your telephone. If you'd like to withdraw your question, please press star two. Thank you, Mr. Chairman. You may begin your conference.

Mark Chalmers

Thank you, Julie, and good morning from Denver, Colorado from this is Mark Chalmers, President and CEO of Energy Fuels, and I'm excited to discuss our Q1 results and the exceptional progress we are making on both the uranium and the rare earth fronts, and I'm extremely pleased and proud to discuss this with you today.
Over the past several years, we have been pursuing a very focused strategy on building a critical mineral company centered around uranium, utilizing our uranium knowledge assets, capability and expertise to have maximum unlike any other country or excuse me, company, I know in the entire world on the back of our US leading uranium business, we are making extraordinary progress advancing our global critical minerals strategy on numerous fronts.
While remaining profitable two in the uranium industry can currently count being profitable at all, let alone while building out a diversified critical minerals company, which we believe will be world significant in time. It is highly unique that Energy Fuels' is doing more than many other companies in the uranium sector, while also advancing very quickly and efficiently both our rare earth and heavy mineral sands base business strategies, which I believe presents significant opportunity for our investors.
Today. I want to remind you you will be controlling your slides from your own computer. I will tried to tell you when I move these forward also, there will be a playback available on our website shortly after the presentation.
So at the end of the presentation, there will be time for questions. And I am being joined by Dave Friedland, our Executive Vice President, Chief Legal Officer, Nate Bennett, our Chief Accounting Officer and Interim CFO, and Curtis Moore our Senior VP of Marketing and Corporate Development to assisting assist me with any questions you might have.
So I'm looking at this first slide, and I love this slide. This is taken down in San Juan County, not far from the White Mesa mill and the tidal clean energy starts with us and actually clean energy on steroids because I believe Energy Fuels can do more for the energy transition. That's just about any company I know of because of our strategy.
Next slide, I may be making some forward-looking statements during this presentation. Those are included in a page 2 of the presentation.
Next slide. Our business objective is simple, creating a profitable, high-margin U.S. critical mineral company that I don't believe anybody else out there is doing like us because there is no playbook centered around uranium producing several of the advanced materials needed for the clean energy transition. When you look at this figure with the uranium. And these other things that surround the uranium, they all have a common denominator.
They contain uranium radium nucleotides that we can recover the uranium profitably and also handle the residuals for example, when we're processing uranium ores or rare earth, we solubilize a lot of things like some of the medical isotopes that we're advancing, particularly things like Radium two to six and two to eight. A number of our mines contain vanadium and rhenium, and we can cover the vanadium as part of recovering uranium.
Best rare earth elements include uranium and other radio nuclear clients that we can capitalize on and deal with heavy mineral sands historically have had legacy issues with monocyte and we can monetize the monocyte as well as the heavy mineral sands itself and the monocyte becomes a byproduct of heavy mineral sands. And then our long history have uranium recycling, recovering uranium that would be lost for disposal and everything we do perfectly centered around ESG. So we're very excited about that.
So next slide, everything we do is a high value product line of recovering materials needed for the clean energy transition uranium. We have been the largest producer of uranium since 2017 and produce two thirds of the uranium produced in the United States. If you look back 10 or 15 years, we produced approximately one-third of the uranium produced in the United States with Cameco being the largest producer of uranium. So second, only to chemicals, we're restarting or we've restarted our uranium mines, and we're increasing and ramping that up right now, and I'll talk more about it in this presentation.
The rare earth critical elements used for the powerful electric magnets for EV.s, wind generation and other. We are starting the commissioning of our SX. plant, our Phase one X6 plant, Dave and I will be at the mill in a few hours time after this presentation, heavy mineral sands that is expanding. You provided a source of low cost monocyte at world scale, well, also being able to capitalize on the titanium zirconium minerals, but NADIA them.
We have the only conventional vanadium plant in the United States. We can restart that when we choose to. But we are currently mining uranium vanadium Aur's and the recycling. It's the reason the mill has stood the test of time of uranium and vanadium bearing materials and that promotes sustainable sourcing and reducing carbon emissions and financial strength I believe we have the strongest balance sheet of any of our peers out there, and I'll talk about that more in just a second.
Next slide.
Q1 2024 financial highlights.
Next slide. We had a profitable Q1 2024. We're continuing our earnings. We had $3.64 million of net income, $0.02 a share, including $2 million of operating income driven by our uranium business and revenue. We sold GBP300,000 of uranium for gross profit of over $14 million.
Our strong earnings, including last year with our net income continues to fund the growth of our uranium business and rare earth production and heavy mineral sands strategies. Meanwhile, we're ramping up uranium production, as I discussed in advancing the commercial rare separation capabilities as well, peak over $0.24 billion of liquidity, current commodity prices. The working capital for March 20, March 31 of 2024 was $222 million, made up of $55 million of cash and cash equivalents, $140 million of marketable securities, which includes uranium stocks and interest bearing securities, substantial inventories, $28 million of inventory and $19 million of product inventory. When you adjust for current commodity prices, our product inventory goes up to about [$40 million], which adds another $20 million of liquidity, zero debt. And we have probably in excess of $1 billion worth of assets. We have nearly GBP400,000 of finished uranium and GBP900,000 of finished vanadium and 11 tonnes of finished high purity separated makes rare earth carbon. We also have nearly GBP500,000 of U3O8 as raw materials at the mill ready to be processed later this year. So we have substantial inventories of finished goods and raw materials. Next slide talk about some of our uranium highlights.
Next slide. And many of you have seen these pictures before, but we're ramping up to GBP2 million of uranium production in the short term, low cost protection with limited capital required. That's important limited capital, mainly working capital, White Mesa mill. They're in the upper left-hand corner, currently commissioning phase one. As soon as that commissioning is complete. We are going to switch over the mill and start processing uranium for the next couple of years. While we're securing other sources of monetization, Kenyon plane in the lower left is currently got about 30 miners in mining, high grade uranium ore right now. That is the highest grade uranium mine in the United States. We're also in preproduction at our ISR. facility Nichols Ranch in Wyoming. And we also are mining at two of our mines in the La Sal complex at LaSalle and Pandora and Beaver chef is actually three mines and we're mining uranium and vanadium Aur's as we speak, ramping up to GBP2 million with limited capital and looking to the future from there next site. So I've already talked about the uranium transactions of GBP300,000 generated north of $25 million in revenue, an average uranium sales price of $84 a pound, resulting in the gross profit of $14 million plus at a margin of 56%, GBP200,000 was under long-term utility contracts and an average price of [GBP7520] or [GBP7513] a pound, but we also sold GBP100,000 on the spot market at an average price of nearly $103. Propel continue ramping up our uranium and vanadium mines, as I mentioned, both in Utah and Arizona and Colorado with will win in time and also Nichols Ranch, ramping it up to about GBP1.1 million to GBP1.4 million of newly mined ore. So this ore will be mined and stockpiled either at the mine site or at the White Mesa mill ready for further processing later this year or into next year. Our guidance we've given out is finished goods in 2024 of between GBP150,000 to GBP500,000. We hope to be at the high end of that depends on how much ore gets delivered to the mill and what gets process at the mill into finished goods this year. But we'll be building up those inventories for processing. And remember, we have about GBP400,000 of inventory finished goods already, and we'll continue to prepare Nichols ranches this at an whirlwind so when you combine our finished inventory and raw materials, we have nearly GBP900,000 either. Auto Refinish were ready to be processed at the White Mesa mill one week but we complete our commissioning of Phase 1.
Next slide. So ramping up to the GBP2 million of annual production by 2025 will be a combination of a number of our mines, including processing, low cost, alternate feed materials and also potentially or purchases from third parties with the buying schedule. Again, if you look over the past, Energy Fuels has produced about a third of the uranium produced in the United States, second to Cameco.
And we plan to continue to be a very significant producer of uranium in the United States. We're looking at expanding our future uranium production with exploration delineation drilling both at Nichols Ranch underground delineation drilling at the pinion Plaine mine, which, as I mentioned, is the highest grade underground mine is the highest-grade uranium mine in the United States.
We continue to advance the permits at Roca, Honda, Sheep Mountain and Bullfrog. All significant projects have the potential of adding an additional GBP4 million of uranium production per year in the coming years for 2020 for uranium sales, I already talked in detail about Q1, but for the remainder of 2024, we're going to continue to evaluate spot market sales opportunities. We still potentially have another GBP100,000 under contract for this year, and we may potentially make a delivery on that, but we'll have to see if the utility wants to take delivery.
So we will continue to use our existing inventory, our raw material that we have at the mill site or alternate feed in these ores, they get transported to the mill to capitalize on a strong uranium price as much as possible.
Next slide, let's talk about the rare earth and heavy mineral sand highlights. Next slide, excuse me, the rare earth element production complements our uranium production because when we're processing monocyte, we're recovering uranium and that uranium is a lot of times, we'll be at very, very attractive cost structures, very low cost uranium like our alternate feed and some of our uranium production on that we have as our uranium project.
So the combination of that are very competitive uranium production costs like no other company because of the way we can produce uranium. We completed the Phase 1 separation plant in Q1. And as I said, we're starting to commission the Asic unit today and I'll be there. The cost of building out that separation plant was approximately $16 million that is incredible. It was under budget by $7 million to $9 million under budget. And most companies in the rare earth business could not even build a pilot plant for $16 million. And we have built a separation plant with capability up to 1,000 tons per year of NdPr, which in itself is world significant, subject to receipt of sufficient monocyte fee, which we're in the process of doing. And so again, I'll talk more about that in a moment.
We also expect to produce between 25 to 35 tonnes of separated NdPr oxide as we commissioned the circuit and then switch over and start producing uranium with White Mesa mill. The White Mesa mill over time has never been held because we were doing something like four in this case, processing alternate feeds for even processing the rare earth.
We have plenty of capacity at the White Mesa mill to handle all the feed we have lined up for the immediate future, but we are engineering it upsized Phase two and Phase three. So we can have completely separate separate facilities in time. So we have the full production capacity, all our infrastructure at all times for the processing of rare earths, uranium and vanadium. So we plan to increase the capacity basically two times to up to 6,000 tonnes of NdPr oxide per year. And just for people's information, that is the quantity of NdPr that Linus produced last year. So world significant, we'll have our own separate Krak and leach facility and the ability to separate disposing and terbium and other heavies in due course, Phase two and Phase three separation circuits are still subject to final engineering design and receipt of all required permits.
Next slide. This is a very unique slide, and it shows how we are advancing an innovative rare earth supply chain four years ago. All there would have been a flag for White Mesa. So look at the progress we're making for a fully integrated rare earth business. While we're doing this on the back of our uranium business advancing through mining crack leach separation with a view and advancing towards metal making and alloys. We've had our relationship with tomorrow's, which we plan to continue to advance. We've secured the Bahia project, 100%.
We have agreements signed for the acquisition of base resources with the world-class Toliara Project and also their quality of project in Kenya. And we're advancing the agreements with as strong on the Donlin project and Turion.
Next slide. This next slide is a bit busy, but it shows that we are building world scale for monetized supplies while also building a very strong portfolio at heavy mineral sands projects globally, and it was not by accident. We searched the world high and low to find the best heavy minerals on projects that had monetized.
And we went after and look at the big here project with potential production in 2026, Donald in '26, Toliara potentially in '28 when it gets all agreements in place to go forward. And that when you add up the potential of securing that monocyte and the heavy mineral sands revenue places us in an enviable position going forward.
We're also very excited about the world-class Toliara Project is well known in the world and base through the acquisition. It has an outstanding project team in a history of profitable HMS uranium production. And many of these projects monocyte was never even considered an asset. It was considered a waste stream, and we're able to capitalize on this light no other company I know of and recover the uranium in a very opportunistically and economic way at low cost structures. We're also looking at purchasing additional monocyte concentrates through offtake and time.
Next slide, just some preliminary rare earth economics. We expect to be globally competitive. I talked about this Phase 1 separation plant of up to 1,000 tonnes of NdPr oxide per year at a $16 million investment. We had when we have completed a Class four pre-feasibility study to increase the NdPr separation and crack and leach capacity at the mill this is the stand-alone at 30,000 tonnes a monocyte per year.
But if you go back to the previous slide, you will see that we're securing in time, we believe when we close all these agreements and get these projects up and running up to 50,000 tonnes of monocytes secured to our account. So the phase of the original Phase two pre-feasibility at 3,000 tonnes of NdPr per year showed a capital investment about $350 million and the cost of producing a kilogram of NdPr of around $30 per kilogram.
And I want to mention that it really depends the economics of the rare earth business in the separation and advancing integration of rare earth products. Really in our case, depends on what the costs of securing the monocyte is because we know we can be world competitive. If we have low cost sources of monocyte and folks look at the program, we're putting in place, we're building up our position to be in receive low cost monocyte and also have revenues from the HMMS. business.
So we're updating the PFS. between 40,000 to 60,000 tons of monitor side will probably be on the upper end to have the capability as we get these projects online to produce up to 6,000 tonnes of NdPr per year, which is the size of Linus. And just for information, Linus has a market cap of US$4 billion, even in a period where rare earth prices have been low. And on top of that, have the ability to recover the DY. in the t be in separate oxides per year.
So this is exciting stuff we are also doing pilot scale testing on recovery and separating out the DY. in the TB right now. And again, that is one of the really exciting and powerful things that we can do all this work at our site at White Mesa when most companies have to go out to laboratories and wait in line for months to do their testing. We can do it right now, real time.
Next slides. So we'll talk briefly about vanadium medical isotope highlights. Next slide. So we're continuing to advance the potential recovery of radio isotopes from existing processing streams. I know I've mentioned this in the past that we have a R&D license allows us to recover Radium two to six. We also expect to complete the engineering on a pilot facility to recover a Radium two to six for testing by end users later this year or during this year, vanadium sales are basically on hold until vanadium prices increase, but we do have large inventories of vanadium and we have the ability to recover vanadium out of our tailings solutions and also building up sources of future vanadium with the mining of our deposits at the South complex.
Next slide. So talk about recycling and commitment to community, which is very important to us. Next slide. We continue to be very proud of the San Juan Clean Energy Foundation that we set up a few years ago with our initial contribution of $1 million into the foundation and an ongoing commitment to fund the foundation with 1% of the annual revenues from the White Mesa mill. We've made grants of north of $300,000 to date supporting existing and new programs in education and farm and health wellness economic development in Native American priorities.
And this is an outstanding program. If you haven't ever done so you can go on the website the San Juan County, Clean Energy Foundation website and look at the great things that we're doing with our stakeholders in the community. The mill recycling programs are being particularly recovering of uranium, which we'll be doing this year, reduces carbon emissions in the world's finite resources that be able to recycle them using the White Mesa mill is incredible and all this is being done at our state-of-the-art facilities and tailings facilities at the highest global standards out there.
Next slide. Now this is my last slide, and this is an exciting slide for a number of reasons because look at the things that we are doing and accomplishing, we're restarting the mill to have finished uranium production guidance was one GBP150,000 to GBP500,000 this year. But remember, we have inventory and we plan to push that as hard as we can to capitalize on potential future spot sales. We have no further contract sales this year expected except for that potential GBP100,000 with one of our customers, we're ramping up the ore production, as I indicated, at our existing mines to that GBP1.1 million to GBP1.4 million per year rate and that ore will be going to the mill to be ready to be processed and manufactured.
Some of it is going to the mill right now. So we're increasing to that GBP2 million per year using a combination of our mines, alternate feed and potential third party purchases of uranium with limited capital and doing it right now with proven assets that we know what the cost structures are. And we know we can accomplish that because we've done it for decades and also at the same time, increasing our long term production profile by up to an additional GBP4 million per year through the projects that we have, mainly Sheep Mountain and Roca Honda and Bullfrog.
Now that's a lot just in the rain space alone and doing that while at the same time bolting on the rare earth elements and the heavy mineral sands with the commissioning of Phase 1. We increased the engineering of Phase two Phase 3 at 2 times what we had planned drilling at here in Brazil coming up with a resource later this year or early next year and advancing the Donlin project with a strong and acquisition of Base Resources, which also puts us in the heavy mineral sand in a big way it secures low cost supplies, a monocyte at world scale while being profitable.
We are busy folks and people some people don't understand what we're doing, but watch our advancements. We are not slowing down. So everything we do is focus on long term sustainable profitability at Energy Fuels. We're not a promotion. We're doers and we're making great progress. And I really appreciate our shareholders, and I appreciate and happy to talk to anybody else that wants to consider becoming a shareholder.
We're always available to talk about the advancements of our company in our strategy. So I will completed the presentation at this time and now open the floor for any questions.

Question and Answer Session

Operator

Thank you. Ladies and gentlemen, should you have a question, please press star one if you'd like to withdraw your question, please press star to one moment. Please, for your first question. Your first question comes from Matthew Key, B. Riley.

Matthew Key

Good morning and thank you for taking my questions. We obviously had a big announcement last week with the Russian enrichment band pass in the Senate on at a high level. Could you maybe provide some additional color on how you expect this to impact your business in the US Iranian production chain more broadly?

Mark Chalmers

Well, I think it certainly shows bipartisan support for reshoring our uranium production capabilities and the priority being placed on having the integration in the uranium business. So it's certainly a significant help, and I think it's going to take some time to get all this in place. I mean, we've got a lot of catch up because it was a national priority. Looking back 2030 years ago, we got a lot of catching up to do so we plan to be ready and able to to help fulfill Iranian production in the United States right now.
I'm curious more is on the line, Curtis Do you have any other comments to that that you'd like to add, and?

Curtis Moore

Yes, not so much. I mean, it's just I think, firstly, it's wonderful that we're not going to be spending anymore money to Russia through our nuclear industry. And yes, no, it's the US utilities have been shifting off of Russian supply over the last several years on which is to their to their credit. I think this was a very important step, mainly to unleash some some funding out there. I think $2.7 billion to help restore domestic nuclear fuel capabilities, which is just going to increase demand for our utility U3O8 product here in the United States. So this was extremely important move. And I think that Energy Fuels is probably one of the better positions to take advantage.

Matthew Key

Great. I appreciate that color. And I'm just just one more for me. You've mentioned for several months now that bringing our wind and Nichols Ranch will bring you over GBP2 million of mine production. I was wondering if you could potentially drill down into that number a little more on if I recall correctly, Nichols Ranch has a nameplate capacity of GBP2 million kind of alone. So basically, if uranium pricing performs really well heading into 2025, do you have a kind of what's the optionality here to kind of, you know, push those assets further if you have it?

Mark Chalmers

Well, I mean, we can we can get to the GBP2 million when you start going above GBP2 million, it's just a function of how much additional investment that you make. And with regard to things like satellites and additional wellfields pushing these mines. So when I talk about this goal of getting to this first wrong of about GBP2 million, this is with limited capital, mainly working capital. So it's just a function of investment to push it past the [$2 million] in time. And when we start talking about GBP3 million, GBP4 million of uranium production, we've got to start spending pretty substantial capital.
I mean, I'm talking like increments of $100 million or so for about every million pounds or so somewhere in that order. So the $2 million is really kind of a threshold with limited capital. And again, that will be made up of newly mined ore from our conventional mines on production from Nichols Ranch, alternate feed and potential some third party purchases. So it's approximate GBP2 million. We can go above that, but to really go way higher like to double that, we have to start making substantial capital investments to go higher.

Matthew Key

Got it. Thank you. Super helpful and best of luck moving forward.

Operator

Your next question comes from Joseph Reagor from Roth MKM.

Joseph Reagor

Hey, Mark, thanks for taking my questions. Is first thing is on your inventories. You guys have a little under GBP400,000 of uranium, a little under [GBP1 million] of vanadium was what do you guys think about, you know, what level of you'd like to keep of those inventories? Or is it just a function of pricing that would allow you to sell that, you know, as an option to the market and over the remainder of this year and maybe long term?

Mark Chalmers

Yes. Well, Joe, what we're looking at is as we said, we're mining this newly mined ore, shipping it to the mill. We're going to look at how we can maximize these higher prices to maintain our profitability to the best of our ability. So from next year, I mean, this year, we have potentially another [GBP100,000] to put into of some of our long-term contracts next year. We also have long-term contracts, but we certainly don't have all that uranium committed for this year next year.
So So Joe, we're going to have we're going to push it as hard as we can, but a lot of it may be just timing. And because we have such significant inventories coming to the mill, we may run down our inventories a bit just to get the best result for our shareholders as we go forward in this really kind of cause a self fund ourselves not cause a self-funded, but based on the back of the Iranian business. So Curtis, do you have any other comments from a uranium market perspective?

Curtis Moore

No, I don't think so. I think that that is that I mean that's a, yes, no, there's there seems to be some really good things happening in your end markets and the price seems to be headed in the right direction. I think this Russian uranium ban and some additional things happening out there bodes well for spot prices on. So I think that inventory is going to be a important part of our plans going forward this year.

Joseph Reagor

Okay. And then any comments on the vanadium market, what you are seeing there?

Mark Chalmers

It's been pretty soft, Joe, and we look at what's happening to the vanadium market and when the price goes up. We sell some product. It's an interesting vanadium is an interesting one because it is very spiky. And so what we're doing is when we process vanadium and put it in inventory. We'll just hold that until we see a spike in vanadium prices. So we have had some people reach out to us or have interest for vanadium for some of these vanadium flow batteries, and we're hopeful that we can get some long-term interest for purchasing that at prices higher than the current prices, I think is $5 or $6 a pound right now?

Curtis Moore

Yes, if I could back it out there, we know vanadium prices, we found it just to be closely tied to global global economic forecasts. The main use for vanadium is steel. And so when there's good economic forecasts for for construction for vehicles for infrastructure, things like that, you'll see vanadium prices go up when that when the outlook's a little bit more uncertain like maybe it is right now, vanadium prices are weak.
But again, we just see every three, four, five years, there's a spike in vanadium prices. And so that's it's very hard to time that. And so it's beneficial to carry inventory. So you're ready for it. And then as you sell it into those strengthening markets, we have the ability to produce it pretty quickly. As we bring our LSL mines online, we're going to also be processing and producing vanadium. So I think it's just a it's just a good kind of option that we have that we can capitalize on every few years.

Joseph Reagor

Okay, thanks. And then, Tom, on the capital spending front, we spent about $7.3 million in first quarter. What are you guys thinking for kind of the full year on the CapEx side?

Mark Chalmers

A lot of that go is where we're capitalizing some of our uranium development and also, um, we're capitalizing some of the uranium production that we haven't turned into finished goods yet. So Nate, you're on I think it's around $40 million or something. Can you correct me with estimate on what our capital spend looks like, including what we're capitalizing for production.

Yes. No, that's exactly right. We should see a similar spend throughout the rest of the year, but ramping up to approximately the $40 billion throughout the year, although we had been capitalizing some of the development of our opinion plain mind and some of the other activities. So that's that's the activity that you're seeing progress.

Joseph Reagor

All right. Thanks for the guidance, as I'll turn it over.

Operator

Your next question comes from Mike Heim from Noble Financial Markets.
Please go ahead.

Mike Heim

Thanks. And the question was kind of partially answered with the question on inventory, but let me just re-ask it for confirmation. It sounds to me like you kind of feel like you need to have more uranium inventory before we sign or long term contract? Is that the case or is it still the case that the utilities are still stuck on the trying to buy things on spot?

Mark Chalmers

No, we don't think we I mean, we think that our inventory is all work in progress. Michael, as I said, we're already over mining on our current contract portfolio. So we still are looking at and considering additional long term contracts and a number of the utilities like the fact that we can be in production sooner faster without capital are significant capital and financing the capital right now. So we are yes, we're not going to I mean.
We're just going to we're just going to be opportunistic when it looks like we evaluate what inventory we have, what inventory's been produced at the mines with alternate feed we have and go from there. But but we don't necessarily I mean, we'd like to have some inventory just because it gives you a little breathing room if for some reason, you have some sort of production disruption for a short period of time. But but we're confident we know our assets well, we know our ability to deliver for those assets, and we're not going to have large inventories just to cover them.

Curtis Moore

Yes, I guess if I could jump in as well, Mark, real fast that you remember most long-term contracts, you know, they don't have deliveries that start for a couple of years, so on and so and we're ramping up to producing around GBP2 million of uranium per year. We have not secured contracts for anywhere near that at this point. So we still have significant uncovered of future production to enter into long-term contracts. And we're certainly talking to utilities on that front.

Mike Heim

How should we view the ramp up of production, is that kind of a steady scale? Or is that things really jump when when you hit a certain? I wouldn't want to say a certain point a certain achievement level?

Mark Chalmers

Well, I think I think that the way you should look at it is it if we're saying we're mining GBP1.1 million to GBP1.4 million of newly mined ore that will become steady-state in time on average. And you add, you know, getting to that GBP1.5 million to GBP2 million at Curtis. Talk to that's going to happen all fairly quickly over the next year or so. And then depending as to what the grain prices do doing as we're advancing these other projects, we'll just start kicking them in time as well. So we want to and we like to we have sort of a baseload of long-term contracts that underpin our operations and but also like to be able to put product out in the market in an opportunistic way like we did in Q1.

Mike Heim

Yes. All right. Thank you.

Operator

Ladies and gentlemen, as a reminder, if you'd like to ask a question, press star one.
Your next question comes from Graham Tanaka from Tanaka Capital Management. Please go ahead, sir.

Graham Tanaka

Congratulations on your progress so far. I'm wondering if you could give us a little bit of guidance of what your revenues could be? Should the uranium prices strengthened further, just to give us a range sort of minimum maximum as to, if say, if prices get to well over $100 a pound, et cetera, how much higher could you ramp faster? Could you ramp production sales and therefore revenues perhaps giving us a range of revenue guidance for the full year? Thanks.

Mark Chalmers

Yes, Graham, good to have you ask question on Graham, as he said, we can get to that GBP1.5 million to GBP2 million quite quickly. So depending on what uranium prices gives you an idea of the of the revenue, when you look at sort of the blended price of our production costs and whatnot. I mean, you could kind of see that we had these significant margins. I think it was our basis was around $37 to $40 per pound as we mine additional uranium from various sources and including our alternate feed.
I'm just going to say a blended price of around $50 ish a pound or something as we had ramping this up. But as we go past it to me and as I said, Bill, you could you can kind of assume that, you know, to get to GBP3 million, GBP3.5 million, would you have to spend $100 million or so of capital investment?
So to get be on some, say, GBP2.5 million or GBP3 million per year. We're going to need a few years to get beyond that. So I don't know if that provides any flavor, but and that's just sort of the realities of the timing and getting all the permits in order getting infrastructure. Now we have the infrastructure to get to that $2 million, $2 million plus a bit, but then it's going to take some more time to go beyond that, right.

Graham Tanaka

So I understand it will take time and some capital to build a $2 million to $3 million, $2.5 million, $3 million. But with your ability to ramp production up. I'm just wondering at a faster ramp scenario on prices, not a ramp, but a higher prices, the prices were to firm up. What could your revenues be this year. I'm just trying to get a feeling from going from the first quarter to the rest of this year. We expect this year?

Mark Chalmers

Well this year, depending on how we sell inventories and ramp up when we sold the $300,000 in the first quarter. No, I'm just going to speculate that it could be around $100 million.

Graham Tanaka

Okay. Of revenues this year if everything clicks together and goes from there this year, and that would be kind of roughly at what average price range kind of.

Mark Chalmers

Yes, just well, I already gave some indication that we carrying the uranium on our books, a little north of [30] depends on the blended price, but just say in the order of that $40 to $50.somewhere in that order by

Graham Tanaka

$40 to $50 would be your costs per pound

Mark Chalmers

in that order.

Graham Tanaka

Okay. So in other words, to get to $100 million, I have to do the math on how many million, how many thousand pounds pounds just trying to figure out what the price would they have to be there any revenues for the banks?

Mark Chalmers

as well in the order of [$1 million], GBP2, something in that order.

Graham Tanaka

Okay. One to [GBP1.2 million] and at. Okay, I got it. So you okay. Now I understand that.
Thank you. And Doug are under the reverse of a lot of a lot of what you do in terms of how fast you ramp that production is going to be a function of capacity and sorry, of car prices, what read that you can realize? And I was wondering how much of a price increase you're going to need to see in those end markets to really ramp up the rare earth production and sales? Thanks.

Mark Chalmers

Yes. Well, on the rare earth front, I mean, right now our focus is going to be on securing the molecules, which we think we're putting our foot on these these projects that I mentioned. It's going to take some development time right now to get all that in place. I mean, while the uranium business is really hot and we can capitalize on that, and it also allows us time to get our Phase two Phase three and ramp that up over the next two or three years.
Graham, we think we're going to be world competitive and we're going to be low cost curve on the rare earth front because of the strategy that we're executing. And so I mean, really to look at material rare earth production, you'd be looking at 26, 27, 28 out in that timeframe in terms of being able to fully capitalize and do the value add that we plan to do at the White Mesa mill. But when you add up on the scale of what we're talking about. You can see that it is world material compared to any other company that you added up to including China.

Graham Tanaka

No, yes, that's But congratulations by the way and lining up so much supply at monocyte turn it pretty quickly, but that was great. So So getting back to the uranium, what kind of funding might be available for you from the US legislation, I am not quite sure what the spending of a couple of billion dollars by the US government in the industry infrastructure means. Does that mean low cost loans possibly for Energy Fuels or grants or what types?

Curtis Moore

Certainly it will not mean that your. Yes, yes, no problem. Yes, Hecker him. This is Curtis Morgan on. So most of that most, if not all of that money is for domestic conversion and enrichment capacity, not for mining. However, there is there's currently a big bottleneck in conversion with Russia essentially being kicked out of the Western market. And so that actually limits the ability of conversion facilities to take our material.
So you've seen things like conversion prices are up like 10, 12 times or something like that over the last couple of years. And enrichment prices are up a similar amount, but you've seen uranium prices. I mean they're strong, but they're only up, say three times or maybe maybe four times over the last five years. And so by increasing conversion capacity, that will increase the demand for at least the amount of U3O8 that they can take from guys like us from from Western producers. So that's what that money is mainly for, um, but it's going to we think it's going to have a big impact on uranium prices just because it's going to increase demand for our material because of that de-bottlenecking of the conversion of the conversion function. Does that mean exactly.

Graham Tanaka

Thank you very much.
Thanks and good luck.
Thanks.

Curtis Moore

Thank you.

Mark Chalmers

Thank you, Graham.

Operator

And there are no further questions at this now. I will turn the call back over to Mark for closing remarks.

Mark Chalmers

Well, first of all, thank you for those of you joining the conference call and for those questions. Again, I understand that our strategy is different from others. In fact, we're building this diversified critical mineral hub centered around uranium. And there is no playbook. There is no playbook.
Nobody has done this before and that makes it difficult for some people to understand what we're doing. But again, if you go back to that last slide, showing our focus and guidance on uranium and rare earth, and you look at our actions look at our actions where we're producing uranium, we're examining our ability to produce and expand that in time.
And then you look on the rare earths front. I mean, when you look at those three projects that we either have secured or in the process of securing or are trying to get all the final agreements and close these opportunities.
I hope that provides people with an idea of the scale we are talking about, it is significant. It is significant scale. And right now we still get valued as a uranium producer. And in fact, probably penalize because uranium producer, while building out this rare earth supply chain at world-class scale and what we believe will be low low cost structures because of the unique attributes that we bring to the table in the types of deposits that we're out there looking to secure.
So I can say is that Energy Fuels', I believe, and I might be a little biased. And I go back to page 2 of a forward looking statements is a outstanding uranium investment and rare earth investment. But you cannot compare us to just the rare earth business or just the Iranian business, you cannot compare us.
We really don't have a peer group. But if you believe in the energy transition and the focus on reducing carbon emissions look at what we do. When we tell people, we're going to do something we do it. That is how we operate. We're not promoters. Mining uranium is difficult. It's very difficult. I've been mining uranium for 48 years. We know how to do this. These assets are proven. And on the other side, we are securing these FEEDs through a very focused strategic way. We're looking at high quality acquisitions and the BASE acquisition is a perfect example of the type of assets we're trying to secure that are world-class long term, multi decade projects.
They can help with that diversification at scale again over the long term and having that diversified cash flow creates other opportunities over time. So I mean, look at the fact that in four years as we build our uranium production and at the same time, look at the speed that we're operating in advancing the rare earth, I think it is absolutely extraordinary. And that's what we're focused on. We're not trying to be status quo. We're not trying to repeat what everybody else is doing in the uranium space.
We're trying to be a standout and look for extraordinary opportunities to build a world material critical mineral hub. So thank you very much. Look forward with future updates, but we are moving fast and we have the balance sheet. We have the team and we're acquiring the assets and we have a very significant asset base to build a very significant company going forward.
Have a great day.

Operator

Ladies and gentlemen, this concludes today's conference call. You may now disconnect. Thank you.