Energy Fuels Inc (TSE:EFR, NYSE:UUUU) is mulling using recent cash raised to pay off long term debt as well as to finance vanadium production activities.
The miner was added to the Russell 3000 index on June 25, and since May 11 has seen strength in its share price and increased volumes.
Between those dates it raised $16mln through its ATM (At-The-Market) programme, at an average price of $2.08 per share (shares are now at C$2.76).
Energy is now "evaluating the potential of using this cash to finance vanadium-related activities, particularly with the spot price of vanadium currently above $17 per pound, repay existing long-term debt, and/or maintain a strengthened working capital position", it said.
The company has a Wyoming Industrial Development Revenue Bond with an outstanding balance of $9.2mln, and has around US$16.3mln (C$20.9mln) of unsecured, convertible debentures with annual interest-only payments of around US$1.4mln and a maturity date of 31 December 2020.
If these debts were paid off, or redeeemed, Energy would expect to remove significant long-term liabilities, avoid relatively large interest expenses, and reduce its cash requirements for the next several years.
The firm plans to resume vanadium production in 2018 and expects to recover up to 4mln pounds of currently dissolved vanadium from pond solutions at its White Mesa Mill in Utah, including up to 500,000 pounds in late-2018 or early 2019.
It is refurbishing two of the underground access declines at both of its La Sal and Pandora uranium/vanadium mines, which are properties within the La Sal Complex, where the firm received federal government approvals for an expansion earlier this year.
Energy Fuels is also evaluating other advancements to its vanadium program, it added.
"The recent strength in our stock due to the annual Russell rebalance presented Energy Fuels with a unique, one-time opportunity to raise significant cash with no discounts or warrants, at little cost, and in what we believe is a minimally-dilutive manner," said Mark S. Chalmers, president and chief executive at Energy Fuels.
"While uranium will always be Energy Fuels' core focus, everything we do, including vanadium recovery, is intended to support our uranium business.
"Today's uranium markets offer Energy Fuels a number of exceptional opportunities, including our pending 232 Petition, which we expect the U.S. Department of Commerce to act on soon, new buyers of uranium coming into the market, falling primary production, Japanese reactors resuming operation, and generally increasing global uranium demand.
"We look forward to continuing to utilise our assets to pursue opportunities in both the uranium and vanadium sectors, while also keeping our cost of capital as low as possible. We are very pleased with the performance of the ATM during this recent unique circumstance."