Energy Fuels Inc Q4 FY2025 Earnings Call

Thank you for joining us. I would like to welcome everyone to the Energy Fuels Annual Earnings Conference Call and Webcast. I now turn the conference over to Mark Chalmers, CEO of Energy Fuels. Please go ahead, Mark.

Thank you, Morgan. My name is Mark Chalmers, CEO of Energy Fuels. I'm glad you could join us today to go over our financial and operational results for the year ending December 31, 2025. This past year was a significant one for Energy Fuels, as we achieved various operational growth milestones and believe we've positioned ourselves well for future cash flow generation and competitive advantages in the critical materials market. We have demonstrated to the market our capability to execute on our ambitious plans. I will highlight a few key points. In summary, we exceeded our guidance across the board in 2025, which is not something many companies in the uranium sector can claim. We even raised our guidance during the year and successfully surpassed those expectations. We mined over 1.7 million pounds of uranium and processed more than 1 million pounds of finished U3O8. It's important to note that there is a slight delay between mining and processing, so we need processing to catch up with the amount of uranium we extract. We've also begun to increase our sales volumes. Looking ahead to 2026, we plan to make significant strides in uranium production and sales. We made notable advancements in our rare earth segment, including pilot production of dysprosium and upcoming terbium oxides, with plans to boost our commercial-scale production by mid-2027. Our NdPr and Dy products have been approved for use by major auto manufacturers, with some of our products already being incorporated into electric and hybrid vehicles. We received all necessary government approvals for our Donald joint venture project in Australia and completed feasibility studies for the Phase 2 expansion of our rare earth processing at our mill in Utah and the Vara Mada project, previously known as the Toliara Critical Minerals Project. These studies indicated a combined net present value of approximately $3.7 billion for these two projects. We strengthened our balance sheet by completing a $700 million convertible note offering at a low coupon rate in October, ending the year with nearly $1 billion in working capital and a stronger financial position than ever. In summary, 2025 was an exceptionally fruitful year, establishing Energy Fuels as the largest and most cost-effective uranium producer in the U.S. and an emerging leader in the rare earth and critical minerals sector. Joining me on this call are Ross Bhappu, our President; Nate Bennett, our CFO; Curtis Moore, our Senior VP of Marketing and Corporate Development; and Nathan Longenecker, our Senior VP and General Counsel. After our presentation, we will have a replay available on our website, and there will be time for questions afterward. Let's get started. As I often say at the beginning of these calls, I appreciate the beauty of San Juan County, and I'm proud of the progress we're making in building a globally significant critical materials company, rooted in our core uranium business. We are the leading uranium producer in the United States. Our rare earth ventures, which include uranium and can be processed at our White Mesa Mill, will provide us with a consistent source of rare earth feeds. This creates a unique advantage for us. Energy Fuels is asset-rich, with several uranium and vanadium deposits across the Western U.S., many of which are in production or permitted for production. Our heavy mineral sands projects in places like Australia and Brazil have come at an opportune time for acquisitions. We're also working on acquiring additional assets in Australia, with plans to close by June 2026. Furthermore, we have potential projects such as a Korean metals plant and a proposed metals facility in the U.S. This extensive list of projects places us in a strong position, and our progress in 2025 showcases our ability to fund these initiatives as we look forward to executing our comprehensive strategy. We have the capacity to convert uranium ores into valuable products, including uranium and vanadium, and possibly medical isotopes. With the materials we secure from our heavy mineral sands projects, we can also start producing rare earths at our mill. We've established the capability to commercially produce at least 10 critical materials, with potential for expansion based on market needs. Unlike many companies in the critical minerals space, we are not reliant on a single element. 2025 marked a breakout year for us, as we produced more uranium than any other U.S. company. A couple of years ago, there were doubts about our commitment to the uranium business, but we have proved that we are not only in it but thriving. Focused on conventional production from the La Sal Complex and the Pinyon Plain Mine, we produced over 1.7 million pounds at an average grade of 1.6%. The White Mesa Mill processed about 1 million pounds, driven by operational efficiency in Q4 of 2025, and we expect this processing trend to continue into 2026. With the ability to produce around 250,000 pounds monthly, we achieved a noteworthy 350,000 pounds production in December alone. Ending December, our uranium inventory was over 2 million pounds, largely made up of raw ore and materials yet to be processed, in addition to over 800,000 pounds of finished product. This indicates that our production costs are decreasing significantly; we're on track to have production costs at Pinyon Plain between $23 and $30 per pound. Our cost of goods sold has dropped from $53 to $43 per pound by the end of 2025, and as we mine and process more Pinyon Plain ore, these costs will continue to decline. We have successfully secured six long-term contracts, covering about half of our production capabilities, which places us in a solid position. We sold 650,000 pounds in 2025 at an average price of $74.20 per pound, and we anticipate strong uranium price fundamentals and demand growth in the future. The White Mesa Mill has been transformed into a critical mineral hub, an achievement we're proud of. It is the only conventional uranium mill operating in the U.S. and is the largest uranium processing facility in the country, fully licensed with an 8 million-pound capacity. Our expertise allows us to process a variety of materials, including vanadium, and we're uniquely positioned to handle monazite, which sets us apart from others. Now, I will turn the call over to Ross to discuss the company's activities in more detail.

Thank you, Mark. As Mark mentioned, the White Mesa Mill is a key asset in our portfolio. It is the only operational conventional mill for uranium processing and has the capability of processing significant amounts of monazite, allowing us to produce notable quantities of NdPr. Our current capacity is 1,000 tonnes per annum of NdPr, and we can also handle samarium concentrates. We've successfully showcased our NdPr in various applications, and it's been qualified for use in some electric and hybrid vehicles from Asia. Recently, we produced 29 kilograms of dysprosium oxide, validated by manufacturers of rare earth permanent magnets. Next month, we aim to produce our first kilogram of terbium oxide, with plans to produce pilot circuits for samarium, europium, and gadolinium oxides thereafter. This year, we’re focused on our Phase 1 expansion, which will enable us to produce commercial quantities of mid and heavy rare earth oxides, including dysprosium, terbium, samarium, europium, and gadolinium. We also may produce yttrium and are planning to install equipment to process mixed rare earth carbonates. We recently released a feasibility study for our Phase 2 expansion, separate from Phase 1, which will allow us to process an additional 50,000 tonnes of monazite. This expansion will increase our NdPr capacity to about 5,500 tonnes per annum, along with additional outputs of terbium and dysprosium. Phase 2 will feature a dedicated rare earth circuit distinct from uranium processing to allow simultaneous production of both. We have already applied for permits for this expansion with hopes to receive them next year, targeting commissioning by late 2028 or early 2029. The feasibility study highlights include an NPV of about $1.9 billion, which translates to nearly $8 per share, and a 33% IRR on the project, with projected EBITDA exceeding $300 million annually for the first 15 years, achieved with a CapEx of only $410 million. By utilizing feedstock from our Vara Mada project, we anticipate NdPr costs will fall below $30 per kilogram, making us competitive globally, including against China. Notably, there’s a growing trend in the prices of rare earth oxides. The slide shows that NdPr prices outside of China carry a slight premium, while dysprosium and terbium prices are markedly higher, with a more than 400% premium to Chinese prices. Based on our expected Phase 2 volumes at these price points, we could generate almost $1.2 billion in annual revenue. As Mark mentioned, we are progressing with the proposed acquisition of Australian Strategic Materials, which we announced in January. We’re on track to close this acquisition in June. It enhances margins for our shareholders, is accretive on a NAV per share basis, and supports our goal of becoming a comprehensive producer of metals and alloys, positioning us well for the reshoring of U.S. magnet manufacturing. For customers, it significantly broadens our product capabilities, making us the lowest cost producer with the flexibility to deliver oxides, metals, or alloys per customer demand. From a national security standpoint, this acquisition contributes to establishing an ex-China supply chain with unique technical skills in solvent extraction and metal production, supporting supply chain resilience with entirely U.S.-controlled supplies. It will also provide an additional source of rare earth feedstock from our Dubbo project in Australia. This slide illustrates how our operations align. With the ASM acquisition, we’re establishing a near-term supply chain from mine to metals and alloys. We have four owned or controlled mining assets: the Donald Project and Dubbo Project in Australia, the Bahia Project in Brazil, and our Vara Mada Project in Madagascar. These will supply high-quality rare earth feed to the White Mesa Mill in Utah, with all rare earth oxides from the mill feeding into either the Korean Metals Plant, which we will acquire from ASM, or our planned American Metals Plant that will produce metals and alloys domestically. Let me provide more details on the Korean Metals Plant we're acquiring, located in the Ochang Foreign Investment Zone in South Korea, which currently has a capacity of 1,300 tonnes per annum for neodymium iron ore and alloy, along with NdPr metal. We plan for a Phase 2 expansion that will increase our capacity considerably, aiming for 3,600 tonnes per annum of neodymium iron boron alloy manufacturing capability, which includes plans to produce heavy rare earth metals and alloys like dysprosium and terbium. A Phase III expansion is also in the works, gearing up for a total capacity of 5,600 tonnes per year. Our AMP facility will mirror operations in Korea, giving us the capability to produce all these metals here in the United States. Currently, we have partnerships for sales and offtake with major firms which ensures strong ties with top-tier magnet producers, making the acquisition of this asset very beneficial for us. The Donald Project is our shovel-ready initiative in Australia that will supply heavy and light rare earth minerals to our White Mesa Mill. We expect to make a final investment decision on this project by the end of March, targeting to provide significant sources of heavy rare earth oxides by late 2027 or early 2028. The project is fully permitted and comes with high levels of dysprosium, terbium, and samarium. We are jointly operating this with Astron, gaining a 49% interest while securing 100% of the rare earth offtake. The Australian government has given the project conditional support, and the total funding needed is around $340 million. Lastly, regarding our Vara Mada project in Madagascar, it’s among the largest and highest-grade heavy mineral sands and rare earth projects worldwide. We recently released favorable feasibility study results, indicating it will produce titanium products alongside high-quality monazite to feed into the White Mesa Mill. The project reveals very attractive economics, boasting a $1.8 billion NPV, a 25% IRR, a CapEx just shy of $800 million, and projected EBITDA of $500 million annually, with a mine life of 38 years and potential to exceed 100 years with additional resources. We are currently transitioning from an MOU to an investment agreement to advance this project. Now, I will hand it over to Nathan Bennett, who will discuss our financials for the year.

Thank you, Ross, and good morning, everyone. I'll start with our balance sheet and liquidity, followed by a discussion of our financial performance for the fiscal year '25. So we ended the year in a very strong financial position as we prepare to develop our long-term projects, finishing with $1.4 billion in total assets. Our working capital was $927 million, which includes $862 million of combined cash and marketable securities, with the majority of our marketable securities being excess cash invested in highly liquid interest-bearing securities. This also reflects the $621 million in net proceeds received from the convertible note offering completed at the beginning of the fourth quarter. This liquidity and profile provides substantial flexibility to fund ongoing operations, advance our strategic projects and remain opportunistic as market conditions evolve. Now turning over to the income statement. For the year, we reported a net loss of $86 million or $0.38 per share compared to a net loss of $47 million or $0.28 per share in fiscal 2024. Now this year-over-year increase in net loss was anticipated and primarily reflects higher ongoing costs with the expansion of our global operations following the acquisition of Base Resources in the fourth quarter of 2024 as well as continued investment in our core projects. Specifically, we incurred approximately $15 million higher ongoing SG&A expenses, largely driven by our expanded workforce to support the execution of our global strategy. In addition, exploration and development expenses included an increase of $9 million as we advanced priority projects across our portfolio, including the Juniper Zone at Pinyon Plain, La Sal, Bahia, and delineation drilling at Nichols Ranch. It also included an increase of $7 million in noncash write-downs related to changes in tax laws and exploration projects that we're no longer pursuing. Finally, market conditions also impacted the results. The average month in uranium spot prices were approximately 13.8% lower in 2025 compared to 2024, which reduced our revenue per pound and our gross margin percentage, which was 31% in 2025. We did increase uranium sales year-over-year by 200,000 pounds to 650,000 pounds, which was an $11.8 million increase in uranium revenue year-over-year. Now as we continue to mine and process ore at the mill, and increase uranium sales throughout 2026, we expect our gross margin to increase to 50% and above as our finished inventory weighted average cost continues to decrease from $43 per pound to the low 30s and as uranium prices continue to strengthen during 2026. Now turning to the next slide. I will briefly touch on our $700 million convertible note offering that was highly successful being oversubscribed by more than 7x and closed at the beginning of the fourth quarter. Now without going through all the details of the terms, I just wanted to mention that overall, the offering places us in a strong financial position to fund our expansions of the White Mesa Mill and our Donald project joint venture and doing it with very low-cost debt. Now with that, I'll turn it back over to Mark, who will discuss our 2025 and 2026 guidance.

Thanks, Nate. We're thrilled to report that we surpassed our guidance for mined uranium, processed uranium, and uranium sales in 2025, a noteworthy achievement for a uranium company. This success stems from our experience in uranium production. It was a pivotal year for us as we resumed commercial uranium production, and this sets the stage for our guidance for 2026. Our projected guidance for mined uranium is significantly increasing from 2 million to a low of 2 million up to 2.5 million pounds. I’ve often mentioned that our initial goal is to achieve 2 million pounds of production and then aim higher. Processed uranium is also set to increase from 1.5 million pounds to 2.5 million pounds, dependent on the operation of the White Mesa Mill, which produces about 250,000 pounds monthly. If we operate for around 10 months, we can reach the 2.5 million pounds target. Additionally, we achieved 350,000 pounds in December 2025. Regarding sales, we have the capacity to fulfill our contracts and find avenues for any excess pounds, whether by keeping them in inventory, selling, or entering into long-term contracts. Our cost of goods sold will decrease as we enhance production, and we'll continue to leverage our uranium business to support the company’s expenditures in the coming years as we develop this significant critical mineral company. Before the Q&A, I’d like to briefly discuss the CEO transition. The succession plan is progressing as expected and has been in place for the past couple of years. Ross has been with us for 7 months and is set to become the CEO in April, while I will retire but stay on as a consultant to assist Ross. Although I’m shifting to a consulting role, I’m not retiring in the traditional sense as I wish to remain involved, especially with plans to spend more time in Australia in the years ahead. Ross, feel free to add anything.

I want to express my gratitude to Mark. When I reflect on the journey of this company over the past ten years, especially in the last couple of years, it's remarkable to see how we've transitioned from a single product, single jurisdiction company to a global entity with a market cap exceeding $5 billion. This growth is a testament to Mark's leadership. We've achieved this without incurring debt and with limited resources, transforming the company into a world-class organization with impressive assets. Additionally, Mark has successfully assembled a team that has effectively executed our vision. It's an exciting time for the company, and I want to commend Mark and his leadership for bringing us to this point. Thank you, Mark. I look forward to continuing our collaboration.

Yes. Thank you, Ross. And we are building that team out even further. I mean, with our office here in Denver, Lakewood, in Australia, in Perth and some of these operations around the world, we're able to attract some remarkable people to grow with the company. And I can say this that we have an aggressive strategy that we're not slowing down. We're not slowing down. There are not enough hours in the day. People are calling us. People are watching us. I was at the BMO conference in Florida earlier this week. And it is amazing how many people are watching Energy Fuels, and they see the progress we're making. So anyways, I'll stop on that note and open it up for questions.

Your first question comes from Brian Lee with Goldman Sachs.

I guess, first off, Mark, we'll miss your leadership, Ross, looking forward to working with you closely going forward. But as you think about the projects and having put them kind of in position to ramp up here over the next few years, kudos to you guys for all the work through this point. I guess the question I had would just be around the time lines. Has anything shifted on your heavy mineral sands projects? I know looking through the decks and you guys have some of the most detailed decks out there, it looks like some of the timelines may have shifted out a little bit. I don't know if that's a more updated view or if that's something that it sounds like you may have expressed earlier this month in an updated corporate deck. But can you just kind of talk about what's happening with the project timelines for the heavy mineral sands projects and if there's any significant drivers of the updated views on kind of maybe pushing out the timelines a smidge?

Yes. The Donald Project is our shovel-ready initiative. Our primary focus is to reach a final investment decision on it. We feel very optimistic about the timing for a project like Donald, especially concerning the heavier minerals alongside the lighter ones, which is crucial for our company, the United States, and the world. While there has been a slight shift in the timeline, we are confident that we are close to making a decision. We still need to finalize the numbers and consider market opportunities for the products produced there. Regarding Vara Mada, we continue to make significant progress with the government. We've had meetings this week with the Madagascar government and are actively engaging with local communities to rebrand the project. We're taking a bit more time to ensure we secure all necessary permits and the social license to operate because it's an exceptional project. We are very excited about it as it has the potential to transform the rare earth sector. In Bahia, we are also advancing on identifying resources, and Dubbo is now queued up for attention. Ross, would you like to add anything?

No, I completely agree with what Mark has said. I think Vara Mada may have slowed down by a quarter due to the change in government, but we met with the new government this week, and they seem very supportive and recognize the value that a project like that brings to the country. So yes, I believe we're making good progress on all fronts there, Brian.

Okay. That's great. I appreciate the color. And then I guess in terms of timing, Donald, like you said, is shovel-ready. It doesn't sound like anything is really shifting out there. So is the timeline still for FID here in the early part of '26 and then deliveries in late '27? Any kind of updated thoughts around the timeline for getting volume out of that project?

Yes, that's still the timeline. And as we said, it's a very important first major step for us in the rare earth space. And to put it into context that the expected heavies from the Donald project is equivalent to about 25% of the U.S. requirements, and that's the first phase. And the second phase could be up to 50% of the heavies required for the United States. So yes, we're on that timeline. We've been doing things behind the scenes to make sure that we can maintain that timeline. But we've got to just look at the final numbers and make a decision at the Board level on how we proceed.

Okay. Great. Last one for me, and I'll pass it on. Mark, you mentioned you've obviously got a very unique asset, and you just alluded to the fact that you could represent a significant percentage of the heavies for the U.S. With Project Vault having been officially announced recently, what have your discussions with your government contacts? How have they evolved? Sort of where do you sit in the positioning of potentially having some sort of government support or offtake given that heavies exposure in your asset mix?

Everyone in the critical minerals sector is actively engaging in Washington, and Energy Fuels is no exception, although I can't share too many details. What I can say is that the number of assets we’ve acquired and the progress we’re making is gaining attention globally, from end users and various government entities in both Australia and the U.S. I believe our differentiator lies in the scale and quantity of what we've assembled. Many are accustomed to dealing with small pieces of the market, while we are presenting a comprehensive approach. When considering the potential acquisition of ASM, along with multiple projects, it demonstrates a strong outlook for the right reasons. I'll leave it at that. Ross, do you have anything to add?

No, I think the attraction for us is that we have a real facility. We have the White Mesa Mill that you can visit, and we have bags of NdPr available. There's monazite on the ground there. We are legitimate, and I believe that's caught a lot of people's attention. We're hoping to keep progressing in that area, but nothing definitive on that front yet, Brian.

Yes. One other comment, Brian, but it's not just the rare earths. People are looking at our uranium production and our vanadium production. So there really isn't anybody else that they can compare to that has this multi-element. Really, everything we're doing is in the wheelhouse of the U.S. government and these OEMs and stuff in terms of how to re-shore some of these elements and final products. So yes, we're in a good spot, I think.

Your next question comes from Anthony Taglieri with Canaccord Genuity.

Maybe starting at White Mesa. Given your uranium production guidance of 1.5 million to 2.5 million pounds, what factors sort of drive the potential high end of that range, maybe producing for 10 months versus the low end, around 6 months? And if you process uranium for 10 months in 2026, would you still switch over back to uranium in Q1 '27? Or could this be pushed back a bit?

Yes. It's really a function of the run time of the mill. We also need to mine quickly because the mill demands a lot. During a uranium run, we prefer not to switch the mill on and off frequently because once it reaches equilibrium, it maintains itself and allows for efficiencies through continuous operation. One of the things we've discussed regarding Phase 1 is that we have Phase 1b and Phase 1c, which will enable us to commercially produce both the lights and heavies in 2027. We've built in flexibility to switch the mill to a rare earth run if necessary, and we're demonstrating to the world that we have that flexibility. So I would say the key factors are achieving critical mass and optimizing the economics of longer runs if needed. We're just ensuring we have some room to maneuver in that area.

Okay. Great. Understood. Maybe switching gears a bit. So with your '26 uranium sales guidance, there's obviously some room there for some spot sales. We all know where spot prices are right now, around $87, $88 a pound. Are we at levels where you guys would consider selling more into the spot market? Or do you want to see prices reach a certain threshold before you do that? Could the decision to sell more or less on the spot market be tied to a potential strategic uranium reserve? We talked about Project Vault earlier. Maybe some color there would be great.

We definitely don’t want to sell a large amount of uranium at low spot prices, and we haven’t really done that. If prices drop, we’re willing to buy, but when prices go up, it benefits our contract pricing due to the formulas in most of our contracts. We aim to time our spot sales for when it’s most advantageous. We have sold some uranium for around $77 to $80, but our focus is on achieving higher prices. I believe the actual replacement value for a pound of uranium is still above the current spot price, and we keep that in mind when making sales. Additionally, companies need to demonstrate revenue growth and progress towards profitability. We won’t hold back from selling uranium solely because we’re not satisfied with the price. If we have a reasonable margin, given our production costs, we want to continue growing our revenue and profitability while minimizing any losses as we develop our overall strategy. We’re in a unique position to use our uranium business as a significant bridge over the next few years.

Yes. I would just add, when you look at the long-term supply and demand fundamentals, you can't help but be pretty bullish on uranium. And so we're trying to maintain good optionality between our spot and our term contracts that give us that optionality to play it if it does go stronger like we think it will.

Your next question comes from Heiko Ihle with H.C. Wainwright.

Mark, congratulations on your retirement and on that same token, Ross, congratulations on your appointment here. Mark has done a wonderful job with the firm. Ross, I actually just looked this morning, and we initiated coverage of the company on June 29, 2015, with a $6.30 price target. So that's 10.5 years ago.

We've come a long way, fantastic.

Shows you where we've come. I was a little bit hesitant to ask this question on a public call, but I just can't help myself. The firm has changed so much since then. And presumably, with the near-term appointment of you, some changes will be in the air. And I assume that most of these changes are going to be minor given how well the old company 'has done.' But do you want to just give us a touch of color on your expectations for the company going forward, maybe things that are not as obvious in press releases or in guidance or anything along the lines of that you think you're going to bring your expertise and maybe change things around just a touch?

I'm letting Ross answer that question.

Yes, it's a great question. And look, when you look at our growth plans, they're pretty ambitious. We're going to have 4 major construction projects going on simultaneously. So I think the key is we're going to have some significant additions to the team that are around execution in multiple geographies. So it's really setting the company up for execution success with some very diverse geographically and commodity projects. So it's all about execution going forward and ensuring that we have the right additions to the team.

Fair. And then just on guidance, and you sort of hinted at this in the prepared remarks. You're building off of a good year. But I mean, the 2.5 million pounds, can you go through some of the factors that could get you all the way to 2.5 million? You mentioned earlier in the prepared remarks that it's obviously dependent on the mill. But besides that, anything that we should be looking out for in our models, please?

We're establishing a more consistent mining rate at Pinyon Plain, which gives us confidence that we can meet or possibly exceed our targets. The same progress is being made at La Sal, where we've trained a significant number of miners to address previous challenges in conventional mining. Additionally, we have plans to advance Whirlwind toward production, targeting 2027 for its first output. We're also continuing drilling at Energy Queen and determining the startup timeline for Nichols Ranch in Wyoming. The key to successful conventional mining is increasing our work areas and workforce, which allows for gradual ramp-up with minimal risk. We are currently mining more than we usually intend to process or sell, which will help us build up substantial inventories. This unprocessed uranium can be quickly converted to finished products especially when the mill is operational. We have a level of flexibility that many others may not possess, and we intend to leverage that effectively.

Your next question comes from Noel Parks with Tuohy Brothers Investment Research.

I just had a couple of things. The additional oxides you're going to be pursuing in Phase 1 that you announced last night, is that essentially sort of the Phase 1c that you've been mentioning late last year?

Yes. One of the things we're doing with our Phase 1, which involves the existing rare earth SX circuit, is adding what we refer to as 1b. It can be a bit confusing since we have several phases, but Phase 1b will allow us to take the SM+, which is a heavy concentrate, and separate out Dy, Tb, and other rare earths. We believe this gives us a significant advantage in establishing a commercial plant in the United States more quickly than others. The 1c concept emerged around mid to late last year, focusing on the intermediate product IMREC, which can come from cracked leached monazite, ionic clays, or other sources. This will enable us to utilize our Phase 1 infrastructure efficiently for both light and heavy rare earths, with 1b handling heavy separation and 1c managing IMREC. This provides us with substantial flexibility and faster deployment. When we engage with OEMs or government agencies, speed is a priority. We view 1b and 1c as quick solutions. Looking ahead to Phase 2, expected to receive approval in 2027 and commence construction that same year alongside the FID decision, we plan to scale up approximately five times and establish a more permanent facility, while still retaining 1b and 1c for the long term.

I wanted to ask about the progress towards closing ASM and if there are any updates on that. Additionally, do you need specific regulatory approval from South Korea for the plant? Also, do you have any estimate on the capital requirements for the future phases of the Korea plant?

I'll answer some of it, but also have Ross jump in. We have a scheme document that we're executing that was signed by ASM. And again, we're planning to close June of this year. We have to get the FIRB approval, which is Foreign Investment Review Board in Australia. We had to do the same thing for Base Resources. So the good news is we've gone through the scheme process recently in Australia. We still got to get a shareholder vote. We've got to get all the various other approvals in the jurisdictions that they have assets in. So we're advancing that. Ross, do you want to add on things like capital or approvals?

So yes, I should have mentioned this Phase 2 is already funded for ASM. So that's adding the 18 different additional furnaces and the additional strip caster. So that is already budgeted and funded. Yes. And then going forward, if we do Phase 3, we don't have numbers around that just yet, but they're relatively modest numbers. I think the key time line, as Mark mentioned, is really getting the FIRB approval and the scheme document approved by the shareholders in Australia. So it's something we've done recently with the base acquisition, and I think we're pretty familiar with the process there.

Your next question comes from Joseph Reagor with ROTH Capital Partners.

I think most of them might have already been answered, but a couple of small things. I guess on the uranium sales guidance, what's the breakdown there between existing contracts and spot sales for this year? And then if you guys can give any color on what we should expect for pricing either over the remaining, call it, 3.5 million pounds you have under contract or just for 2026 for those contract pounds?

Yes. Look, at this one, I'm going to flip to Curtis because he's on the call here, and he's in charge of our uranium sales. But go ahead, Curtis.

Sure. It's great to hear from you. This year, we expect total contract sales to be between 650,000 and 880,000 pounds, and we've already achieved some of that in the first quarter. This range includes some flexibility we offered on these initial contracts we signed in 2022 in order to secure them. These contracts also support the operation of the Pinyon Plain Mine, which is currently the largest and lowest-cost mine in the United States. The remaining sales may include spot sales, midterm contracts, or sales based on the forward price curve this year. As Mark mentioned, if prices drop, we will likely purchase uranium to replenish our inventories, but we anticipate being price-sensitive sellers.

Okay. And can you give any color on what the contract pricing is kind of set around either for this year or if you are more comfortable just over the remainder of the book?

We haven't provided any guidance on that. Looking at our contract pricing from the past couple of years gives a good indication of the prices for our initial set of contracts. We signed three contracts in early to mid-2022, and we secured better pricing on those contracts than what was initially reported, although they were not high-priced contracts. The base and fixed price components of those hybrid contracts have been increasing with inflation. Recently, we've also signed three additional contracts over the last 18 months, which have higher prices. We are still delivering on the 2022 contracts this year, and one of the recent contracts also has deliveries scheduled this year. Overall, you can expect our contract pricing to increase throughout the year, though Q1 may be slightly lower due to the delivery from one of our 2022 contracts. That particular contract will be completed for the year, and after that, we expect to see a significant rise in pricing.

I want to emphasize that our prices will be in the $70s or higher. Depending on uranium prices, they could even reach the $80s. We are definitely not in the $60s range, which many others are quoting.

Okay. That's very helpful. You also provided updated reserves and resources with the K, and it looks like the numbers went up a little bit. Can you explain what contributed to some of those gains? Was it due to higher pricing or other adjustments? I know Pinyon was a significant factor, but I'm curious about the overall situation.

Yes, I don’t have my geologists with me as he is currently traveling. Looking at Pinyon, that is the main area generating cash flow right now. The original estimate for the upper zone main zone was around 1.6 million pounds, but the most recent assessment has significantly increased that figure two to three times. It’s interesting because the main zone that was estimated was the most drilled-out area I’ve encountered in my career, yet their estimates were off by a significant margin. It’s challenging to obtain what I believe to be accurate estimates, especially for the Juniper zone. However, we observed a substantial increase in both the main zone and its grade, almost doubling previous expectations. This higher grade contributed to the discrepancies in estimates. In the Juniper zone, we have a 600-foot area, and we are currently mining the upper 200 feet, leaving an additional 800 feet to explore. I see a lot of exploration potential in this area. We know there are very high-grade intercepts in the Juniper zone; however, there hasn’t been much drilling, particularly 200 to 300 feet below. It remains very open-ended. I’ve been involved in a few mines that initially had only a year’s worth of resources or reserves, yet they continued to produce much longer. While I don’t expect Pinyon Plain to last for 20 years, I am optimistic about its longevity and believe it will help keep our costs low due to the high grades.

Your next question comes from Matthew Key with Texas Capital.

I wanted to drill down a little bit on the 2026 guide on mined U3O8. I was wondering if you could provide maybe an asset breakdown on that total, particularly as it relates to Pinyon Plain. Should we be expecting a similar run rate in 2026 that we saw in late 2025? Obviously, that mix would be important just as we kind of model out costs. So just trying to get a sense of the breakdown there.

Yes. We are quite confident that Pinyon Plain alone will produce at least 2 million pounds. The remaining production will come from the La Sal Complex, which currently has two mines. We are also looking into refurbishing another mine at La Sal and then there's the Whirlwind mine as well. Most of the production is expected from Pinyon Plain. Importantly, at La Sal Complex, we are currently only extracting uranium and not vanadium, which is approximately five times the grade of uranium. If vanadium prices continue to rise, we might consider recovering vanadium, providing an additional byproduct that could lower our costs further at the La Sal Complex. Therefore, we anticipate Pinyon Plain to produce around 2 million pounds, with La Sal contributing additional production. Moreover, with Energy Queen, Whirlwind, and Nichols Ranch, we could potentially reach up to 3 million pounds if we choose to enhance our production. This projection of 3 million pounds can be achieved with limited capital—essentially just working capital. Additionally, if vanadium prices keep increasing, we could also benefit from vanadium production, which would significantly reduce our costs.

This concludes the question-and-answer session. I will now turn the conference back over to Mark Chalmers for any closing remarks.

Thank you to everyone listening and for the questions asked. In closing, I've always mentioned that we've pursued an aggressive yet sensible strategy. We aim to maintain a strong balance sheet and require capable individuals to support this strategy, and we are making progress on that front. We're generating significant global interest, and it has been a pleasure to be involved over the past 10 years. I intend to remain engaged with Ross and the team, as I've invested considerable time in many of these assets. I’m truly excited about what lies ahead; there is so much happening. I don’t want investors to believe that we’ve hit a plateau, as we are still pushing towards transforming this company into one worth over $10 billion. I'm also looking forward to stepping back from the seven-day workweek to have more time for leisure activities like skiing and spending time with my grandkids, family, and friends, which have been somewhat limited over the last decade. Ross, would you like to add anything?

Well, again, I'd just reiterate that Mark is going to be on a 2-year contract going forward, and I fully intend to utilize his expertise. He brings such an incredible wealth of knowledge. But look, the company is set up for just incredible success, incredible continued growth. To Mark's point, we have a lot of exciting things on our plate right now. And yes, excited for the future of this company.

Thank you everybody.

This concludes today's call. Thank you for attending. You may now disconnect and have a wonderful rest of your day.