LAKEWOOD, Colo., Dec. 5, 2024
/PRNewswire/ - Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR)
("Energy Fuels" or the "Company"), a leading U.S.
producer of uranium, rare earth elements ("REE"), and
critical minerals, is pleased to announce that it has entered into
a Memorandum of Understanding (the "MOU") with the
Government of Madagascar (the "Government") setting
forth certain key terms applicable to the Company's Toliara
titanium, zirconium, and REE project (the "Toliara Project"
or "Project"), located in southwestern Madagascar.
As previously announced, on November 28,
2024, the Madagascar Council of Ministers, as Chaired by the
President of Madagascar, lifted
the suspension on the Toliara Project, which was originally imposed
in November 2019. The lifting of the
Suspension allows the Company to continue development of the
Project, re-establish community programs, and advance activities
necessary to achieve a positive final investment decision
("FID").
The MOU announced today is the culmination of extensive
negotiations over several years with the Malagasy Government on
fiscal and other terms applicable to the Toliara Project and a
major step forward in advancing the Project. While the Company is
progressing towards an FID, which is expected to be made in
approximately 14 months, the Company will continue working with the
Government of Madagascar to
formalize the terms and conditions set out in the MOU through the
implementation of a "Stability Mechanism" consisting of one
or a combination of the following: (a) submittal of an
Investment Agreement to the Madagascar Parliament for approval as
law and certification of the Toliara Project ("Project
Certification") under existing law establishing a special
regime for large scale investments in the Malagasy mining sector
(the "LGIM "); (b) promulgation of amendments and
revisions to the existing LGIM (the "LGIM Amendment") in a
form that provides for the necessary certainty of financial and
legal terms, and reasonable financial, operational and legal
requirements, for large-scale projects and have Project
Certification under the amended LGIM, together with an Investment
Agreement (if reasonably required) submitted to Parliament for
approval as law; and/or (c) another agreed upon mechanism that
achieves the necessary certainty of financial and legal terms, and
reasonable financial, operational and legal requirements, applying
to large-scale mining projects.
Mark S. Chalmers, President and
CEO of Energy Fuels commented: "As I've said before, I believe the
Toliara Project is a 'generational' critical mineral project that
has the strong potential to operate well beyond many of our
lifetimes. Therefore, it is vital to Energy Fuels, and to our Base
Resources subsidiaries, that the Republic of Madagascar and the communities in the vicinity
of the Project enjoy significant benefits that go beyond jobs,
economic development, and sustainable operations that respect human
rights, local culture, and the environment. To achieve this vision,
the MOU signed today creates the framework for a long-term mutually
beneficial partnership between a U.S. critical mineral company and
the people of Madagascar. We look
forward to continuing to work with the Government of Madagascar to formalize the terms of the MOU
and grow our relationship with what we believe will be the largest
U.S. investment in the country's history."
Key Terms and Conditions of the MOU
Under the MOU, the Company has agreed to pay a five percent (5%)
royalty (and no other) on mining products and deliver US$80 million after Project Certification in
development, community, and social project funding, including a
total of $30 million within 30 days
after Project Certification, another $10
million within 30 days after achieving a positive FID and an
additional $40 million by the fourth
year of operations. In addition, the Company has agreed to spend at
least $1 million prior to FID in the
Atsimo Andrefana Region on community and social investments, and
$4 million annually thereafter,
indexed at 2% per annum, from commencement of construction after a
positive FID. The Company has also committed to developing the
Toliara Project in an environmentally, socially and fiscally
responsible manner, and to observe the specific protections set out
in the MOU.
The payments described above are not expected to have a material
effect on the economics of this potentially multi-billion project,
which (along with the appropriate disclaimers related to technical
disclosure) are described in the Company's April 2024 press release. The Company is in the
process of updating the September
2021 definitive feasibility study and December 2023 prefeasibility study on the Toliara
Project, along with the White Mesa Mill's 2024 prefeasibility study
on rare earth oxide production, to reflect current economics.
The Government has agreed in the MOU, among other things,
to:
- assist the Company with obtaining all necessary administrative
authorizations for the purpose of adding REE-bearing monazite
recovery to existing permits;
- certify the Project as eligible under the LGIM (or amended
LGIM, if applicable) as soon as the LGIM eligibility conditions are
met; support the prompt development of the Toliara Project,
including (without limitation) by causing all relevant State
authorities to timely consider and grant all complete applications
for permits, licenses or authorizations necessary or desirable for
the development and operation of the Toliara Project in accordance
with the laws of Madagascar;
- maintain the fiscal, legal and customs stability of the Toliara
Project;
- not, directly or indirectly, receive, take or have an interest
(including an economic interest or form of production sharing
arrangement, and whether carried or free-carried) in the Company or
any of its assets, including the Toliara Project;
- provide active and public support for the Toliara Project,
including by publicly announcing the State's support for the
Toliara Project and its development; and
- undertake any LGIM amendments in consultation with relevant
stakeholders, including the Company, to ensure that such amendments
(or similar instruments with legislative force) provide the
necessary certainty of financial and legal terms to address the
reasonable financial, operational and legal requirements of
large-scale mining projects, and otherwise supports the bankability
of the Toliara Project and the ability of the Company to achieve a
positive FID.
In addition, under the MOU, the Company's agreement to pay a 5%
royalty on revenues and its commitments to pay the US$80 million in development, community and
social funding are conditional on:
- the terms of the Stability Mechanism being adopted in a form
that is satisfactory to the Company;
- Project Certification having been obtained; and
- prior to Project Certification having been obtained, there
being no change to the laws of Madagascar (as they apply to the Company and
the Toliara Project as at the date of the MOU) that is adverse to
the Company or the Toliara Project.
The MOU and its terms are expressly subject to the foregoing
conditions set out in the MOU. It should be noted that there can be
no assurance that the foregoing conditions will be satisfied or as
to the timing of satisfaction of those conditions, or the timing
for approval of the addition of monazite to the mining permit. If
such conditions are not satisfied, this could delay any FID in
relation to the Toliara Project or prevent or otherwise have a
significant effect on the development of the Toliara Project or
ability to recover Monazite from the Toliara Project.
ABOUT ENERGY FUELS
Energy Fuels is a leading US-based critical minerals company,
focused on uranium, REEs, heavy mineral sands ("HMS"), vanadium and
medical isotopes. The Company has been the leading U.S. producer of
natural uranium concentrate for the past several years, which is
sold to nuclear utilities that process it further for the
production of carbon-free nuclear energy and owns and operates
several conventional and in situ recovery uranium
projects in the western United States. The Company also owns
the White Mesa Mill in Utah, which is the only fully licensed
and operating conventional uranium processing facility
in the United States. At the Mill, the Company also
produces advanced REE products, vanadium oxide (when market
conditions warrant), and is preparing to begin pilot-scale recovery
of certain medical isotopes from existing uranium process streams
needed for emerging cancer treatments. The Company also owns the
operating Kwale HMS project in Kenya which is nearing the
end of its life and is developing three (3) additional HMS
projects, including the Toliara Project in Madagascar, the
Bahia Project in Brazil, and the Donald Project
in Australia in which the Company has the right to earn
up to a 49% interest in a joint venture with Astron Corporation
Limited. The Company is based in Lakewood, Colorado,
near Denver, with its HMS operations managed
from Perth, Australia. The primary trading market
for Energy Fuels' common shares is the NYSE American under the
trading symbol "UUUU," and the Company's common shares are also
listed on the Toronto Stock Exchange under the trading symbol
"EFR." For more information on all we do, please
visit http://www.energyfuels.com
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
This news release contains certain "Forward Looking Information"
and "Forward Looking Statements" within the meaning of
applicable United States and Canadian securities
legislation, which may include, but are not limited to, statements
with respect to: any expectation that the Company will maintain its
position as a leading U.S.-based uranium and critical minerals
company or as the leading producer of uranium in the U.S.; any
expectation that the Company will re-commence development
activities on the ground, re-establish the Company's community
programs or progress the other activities necessary to achieve a
positive FID for the Toliara Project; any expectation that the
Toliara Project is a 'generational' critical minerals project or
that it has the strong potential to operate well beyond many of our
lifetimes or at all; any expectation that the Company will
continue working with the Government of Madagascar to
formalize fiscal and other terms applicable to the Project through
an investment agreement, amendments to existing laws or other
mechanisms as appropriate; any expectation that rare-earth element
production will be added to the existing mining permit; any
expectation that the financial and legal stability of the Toliara
Project will be maintained; any expectation that the Toliara
Project will attain Project Certification or that the other
conditions to the Company's funding obligations will be satisfied;
any expectation that a positive FID will be made for the Toliara
Project and the timing of any such positive FID; any expectation
that the Toliara Project will be developed; any expectation that
the MOU will create the framework for a long-term mutually
beneficial partnership between a U.S. critical mineral company and
the people of Madagascar; and any
expectation that the Company will be successful in recovering
certain medical isotopes from existing uranium process streams
needed for emerging cancer treatments. Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology such as "plans", "expects," "does not
expect," "is expected," "is likely," "budgets," "scheduled,"
"estimates," "forecasts," "intends," "anticipates," "does not
anticipate," or "believes," or variations of such words and
phrases, or state that certain actions, events or results "may,"
"could," "would," "might" or "will be taken," "occur," "be
achieved" or "have the potential to." All statements, other than
statements of historical fact, herein are considered to be
forward-looking statements. Forward-looking statements involve
known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the
Company to be materially different from any future results,
performance or achievements express or implied by the
forward-looking statements. Factors that could cause actual results
to differ materially from those anticipated in these
forward-looking statements include risks associated with: commodity
prices and price fluctuations; engineering, construction,
processing and mining difficulties, upsets and delays; permitting
and licensing requirements and delays; changes to regulatory
requirements; legal challenges; competition from other producers;
public opinion; government and political actions; the failure of
the Company to provide or obtain the necessary financing required
to develop the Project; market factors, including future demand for
REEs; and the other factors described under the caption "Risk
Factors" in the Company's most recently filed Annual Report on Form
10-K, which is available for review on EDGAR
at www.sec.gov/edgar.shtml, on SEDAR at www.sedar.com,
and on the Company's website at www.energyfuels.com.
Forward-looking statements contained herein are made as of the date
of this news release, and the Company disclaims, other than as
required by law, any obligation to update any forward-looking
statements whether as a result of new information, results, future
events, circumstances, or if management's estimates or opinions
should change, or otherwise. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, the reader is
cautioned not to place undue reliance on forward-looking
statements. The Company assumes no obligation to update the
information in this communication, except as otherwise required by
law.
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SOURCE Energy Fuels Inc.