Uranium miner Energy Fuels Inc (TSE:EFR) made a gross profit of US$1.3mln from mining and milling operators in the second quarter of 2016.
In the same period, US$7mln of revenue was realised by the company, resulting in an 18% gross profit margin (including certain write-downs due to low uranium prices).
The company said 100,000 pounds of U308 (uranium oxide) sales were completed under a long-term contract at an average realised price of US$70 per pound.
Unfortunately, noted Steven Antony, the company’s president and chief executive officer, the price of uranium continues to disappoint in 2016.
“Put simply, the world is over-supplied with uranium today and end-user demand is not yet sufficient to catalyse an uplift in prices. Amid this market uncertainty, we continue to deliver into our above-market long-term contracts, control costs, rationalise our asset portfolio, and preserve Energy Fuels' optionality to significantly increase production when prices improve,” Antony said.
Antony added that the company continues to execute its business plan and meet production and sales guidance. It reaffirmed its annual guidance of 550,000 pounds of contract sales and 950,000 pounds of uranium recovery.
The company actually has the capability to recover more than 11.5mln pounds of uranium, plus it has what Antony described as “an industry-leading US-based uranium resource portfolio to feed into that capacity”.
“I would argue that no other uranium mining company can claim these levels of scalability," Antony said.
The company posted a net loss of US$10.4mln, including the write-downs mentioned above and US$3.5mln of development, permitting and land holding costs largely related to well-field construction and continued shaft-sinking at the company’s Canyon project.
The shaft at the Canyon project is targeting a depth of 1,470 feet and is currently around 1,100 feet of the way there. Meanwhile, an underground drilling programme to further evaluate the this high-grade (circa 1% U3O8) project has commenced.