Q3 2023 Energy Fuels Inc Earnings Call
Participants
Mark Chalmers; President & CEO; Energy Fuels Inc.
Tom Brock; CFO; Energy Fuels Inc.
Heiko Ihle; Analyst; H.C. Wainwright & Co., LLC
Joseph Reagor; Analyst; Roth Capital Partners LLC
Justin Chan; Analyst; SCP Resource Finance
Mike Heim; Analyst; Noble Capital Markets, Inc.
David McLaughlin
Presentation
Operator
Good afternoon. My name is John, and I will be your conference operator today. At this time, I would like to welcome everyone to the Energy Fuels third-quarter 2023 conference call. (Operator Instructions)
Thank you. Mr. Chalmers, you may begin your conference.
Mark Chalmers
Thank you, John, and good morning or afternoon depending on where you're joining this call from. Yes, and thank you for joining the Q3 conference call and webcast today. As John indicated, my name is Mark Chalmers, and I'm President and CEO of Energy Fuels. Joining me today are Tom Brock, our CFO; and Curtis Moore, our Senior VP of Marketing and Corporate Development.
All I can say it has been very busy. Uranium markets are continuing to strengthen, which is bringing more opportunities to the company. And we also believe we are experiencing greater appreciation for all the great things Energy Fuels does in the critical minerals space.
Every conference call, I emphasized how Energy Fuels is a truly unique investment vehicle for decarbonization and electrification. If you believe in the energy transition, we are our one-stop shop investment. No other company now has the ability to advance uranium, vanadium, rare earths, and potentially even medical isotope production capabilities while continuing to maintain and improve a very strong and improving balance sheet with zero debt.
In addition, many people keep asking me, it's great that you are making profitable uranium sales in 2023 but when are you going back into uranium production? The answer is we could resume uranium production right now if we wished. However, our current plan, we expect to resume commercial-scale uranium production early next year, and we'll talk about this more during the presentation.
I will also elaborate on Energy Fuels' financial and operational accomplishments during the quarter and what to expect during the remainder of the year. I also want to remind you that you're controlling your slides to the presentation from your own device and I'll endeavor to tell you when to advance to the next slide.
There will also be, as John mentioned, time for questions at the end of the presentation. For those of you who cannot join us today, we'll have replays of this presentation available for two weeks on our website either later today or tomorrow.
So let's get going. Certainly, this first slide, most of you, if not all of you, have seen it before. But again, Energy Fuels is a company that is focused on the energy transition. And when you look at the critical elements on and in the world, Energy Fuels currently has or will have the capability of producing 8 to 10 of those critical elements. Next slide.
I may be making some forward-looking statements and they're included in the presentation. Next slide.
So again, Energy Fuels is a leading US producer of uranium, vanadium, and rare earth elements all created to a better world on the energy transition. Next slide.
Now I've talked about the periodic table and the changes that we're seeing in the mining and processing industries over the last few years. And Energy Fuels, as we all know, has a long history of uranium/vanadium production, but is now adding the rare earth elements and radium. And so the whole focus on these different elements in the periodic table is increasing more by the day.
And when I graduated from the University of Arizona, I have to say it looks much different to a mining or geological professional today than it did 40 years ago because there's all these new elements that are all focused on electrification and decarbonization. Next slide.
So we know that all of our products that Energy Fuels makes or value adds to our high-value product lines, uranium, which is about 20% of the electricity in the United States; and 50% of the carbon zero electricity on and getting an increasing attention with the focus on small modular reactors and the need for baseload energy globally.
And basically all the forecasts are showing increase rates of demand over the coming years because of that realization. Rare earths use critical elements for the powerful magnets used in electric vehicles and wind generation, as well as other high-tech appliances. And Energy Fuels is quickly advancing our ability to separate rare earth elements into separated oxides. I'll talk about that more later.
Vanadium, again, is a critical element used for high-strength and also looked at and considered a very, very unique element for grid-scale batteries. And again, we have the only conventional vanadium processing plant in the United States, the medical isotopes critical for emerging cancer therapies. We're making great progress on that front and getting closer to signing some offtake agreements in hopefully not-too-distant future.
Recycling -- and I've said this many times -- without the ability to recycle natural uranium and vanadium, the mill would have shut down into reclaim decades ago. And that's a unique part of our business strategy in particularly weak market periods.
Financial strength, significant cash and inventory. We're always proud to report on our financial strength, $162 million of working capital, which is really quite conservative depending on how you add that all up. But -- and again, I'll talk more about that. But we are very, very proud to always have a strong balance sheet. Next slide.
Just a picture of Pinyon Plain Mine, which I've told many of you that I actually have built and bolted together that headframe in 1987. Next slide.
So a little bit more on our balance sheet, $162 million of working capital end of Q3. Made up of about $55 million in cash, cash equivalents; $61 million of marketable securities; $30 million of product and inventory, which currently at current commodity prices is almost $20 million greater than that. Zero debt. We have about a billion worth of infrastructure that's completely paid for and we still could have significant inventories of uranium, nearly 600,000 pounds of finished uranium, 900,000 pounds of finished vanadium, and also 11 tonnes of high-purity separated rare earth carbonate.
Now I also want to mention that in addition to that post quarter, enCore has repaid an additional $20 million on the convertible note that we have with them, leaving a balance of about $20 million yet to be paid off. So they paid off in total about $40 million of the $60 million convertible note. So again, just further strengthening our balance sheet. Next slide.
This quarter, we did sell 180,000 pounds to a US nuclear utility. That had a gross margin of about 50% and was sold at about $58 a pound. And I want to point out, even though the spot price is $73 to $74 a pound, the long-term prices are around $62 per pound. So when you sign contracts, you're not going to get the highest spot price at all times. But you do get certainty with floors and ceilings.
More on our preparation of our uranium mines. We are preparing four conventional uranium/vanadium mines for production, and I want to explain a little bit about this. First of all, La Sal Complex. We put in a new building there. We're ordering new mining equipment. We're also getting and hiring miners to refurbish and get ready to start mining at La Sal Complex, which includes the Beaver and La Sal Mines.
Also the Whirlwind Mine, which is in Colorado. We did almost a year's worth of (technical difficulty) of the decline by putting into a good operational shape to restart mining in the not-too-distant future. And the Pinyon Plain Mine in Arizona, we've done a lot of work around the shaft where we put in all the shaft pockets required for commercial production. And we're currently doing a vent hole, 8-foot diameter vent hole that we're currently advancing as we speak to establish ventilation.
So we're doing a lot of work. And as I said, if we wanted to, we could start mining today -- literally with a phone call. But we're getting all these projects ready to restart at commercial production when we're ready to do that.
I also want to indicate that these mines that we're getting ready will have the capacity to recommence at a production rate of about 1 million pounds of mine production per year -- maybe greater than that -- in 2024. And final production decisions really depends on our contract requirements, inventory levels, and market conditions.
One thing that is really unique about Energy Fuels is we can mix and match conventional production, ISR production, alternate feed in our inventories as required. And that gives us unique flexibility in a number of different ways.
We can mine uranium; we don't have to process it yet. We can stockpile it, we can process it, and nobody can do this. And we can do it at very attractive cost for whatever the requirements are with regard to our contracts or other future uranium sales.
Uranium inventory, I mentioned we have about 600,000 pounds of finished inventory, but we have nearly 400,000 pounds of raw materials yet to be processed uranium. Next slide.
So on the rare earth element production, we're currently awaiting our next shipment of monazite from Chemours. We expect that later in Q4 or early Q1 '24, and we'll start processing that once we receive it. And when we're ready to start commissioning our Phase 1 separation plant, which is expected to be operational in Q1 of '24.
We started a building expanding the SX building at White Mesa by modifying it and adding existing or additional solvent extraction capabilities to that existing SX building. And we expect to have capacity around 800 to 1,000 metric tonnes of separated NdPr oxide per year early next year capacity given adequate feed.
So the development work at the mill is well advanced. Major components have been ordered and are being installed. And we expect that to be -- the cost of doing that about $25 million.
We also showcase what we're doing at the mill at open house in October. We had about 200 people show up for that. And it was really a great event, including Miss America showing up and gave a really wonderful speech to the group about the positive aspects and expanding aspects of nuclear power going forward. Next slide.
We are also advancing what we call Phase 2 separation project, and that basically can be as big as we want it to be depending on what we think the future looks like for securing future feeds of monazite. It could be 3,000 tonnes or greater per year.
We are also expecting to advance the crack-and-leach circuit head of the SX circuit of Phase 2 to allow the simultaneous production of rare earth and uranium separately at the mill site. Engineering for Phase 3 and commissioning and piloting is going to start on the -- the actual pilot is going to start later this year. And we still expect to have the capabilities of doing the separation of heavy oxides in that 2027 to 2028 time period.
The Brazil project, Bahia, is advancing. We are having a new sonic drill rig delivered to the site this month. The next phase of drilling is going to commence soon after that. We've done some initial test work on production of heavy mineral concentrate. We're awaiting results and we're starting community and stakeholder engagement. Next slide.
Not a lot has happened lately on the vanadium sales. We did do some sales earlier this year, and we sold it at about a 37% margin. And again, I just want to emphasize that the company has the only conventional vanadium circuit in the United States, also a critical element.
We still have about 900,000 pounds of finished vanadium in inventory. And we have the ability to recover more vanadium from our tailings or conventional mines when we decide to do that. Next slide.
So this slide just highlights a bit more about our significant liquidity and our strong balance sheet, $162 million. And as I said, that does not include the $20 million paid by enCore on the note post quarter. And it also does not include the value of our CUR/ISO investment or current inventory values.
So again, we define working capital based on GAAP principles. So we are, again, very strong on all fronts. No debt. Also, the inventories we have of uranium and vanadium. And when you value our inventories at current market values, you can get a substantial upgrade in the value of those finished goods and those inventories.
I mean, just look at, for example, the uranium on our books -- it's on our books for $29 a pound. Current price of $73, it's up over 150%. Vanadium prices have come down a bit, but still pretty steady on what our value is on the books.
So let's just look at what the 2023 guidance looks like. We will sell or we have sold 560,000 pounds of uranium at an average price of about $59.42. And as I said, you're never going to catch the spot price. If you try to hit the spot price, you will never have any long-term contracts. So we sold uranium to US reserve for about $61 a pound earlier this year. And we made two sales at two of US utilities: 80,000 and 180,000 pounds in separate deliveries.
We're continuing to prepare at least one mine to go in production. It's probably going to be more than one mine. As I said, we can start anytime but we're waiting until we're completely ready to start at commercial levels and optimal levels. We're looking for additional long-term supply agreements, which we think -- certainly with the pricing range went up and the scarcity of uranium, that there will be other contracts to be had on the market with utilities.
We're not doing any uranium production in terms of processing uranium in 2023 for finished goods. We are processing uranium and keeping it in solution at the mill. We're processing rare earths. And we're continuing to build up our alternate feed inventories. And when we start producing uranium at the mines, we'll be stockpiling uranium when we go back into commercial production.
We plan to process later this year, early next year about another 600 tonnes of monazite to commission the circuit, and we'll continue to advance and commission this Phase 1 circuit that I've already mentioned late -- probably later in Q1 2024.
We're still looking for rare earth offtakes. The Bahia project I mentioned, we're advancing that. And we are aggressively looking for M&A opportunities in both the rare earth space and the uranium space globally. So that's the end. Next slide.
This is beautiful sunset in San Juan County, Utah. I now open it up for any questions anyone would have of myself, Tom Brock, or Curtis Moore. Thank you.
Question and Answer Session
Operator
(Operator Instructions)
Heiko Ihle, H.C. Wainwright.
Heiko Ihle
Thanks for taking my questions, Mark.
Mark Chalmers
Hey, Heiko.
Heiko Ihle
And also, thanks for joining us for a couple of weeks ago. Your balance sheet was very solid, but let's talk a bit about the use of funds. Can you break down some of the larger things that you're going to spend money on the 12 months or in 2024?
Mark Chalmers
Yeah. Heiko, some of the major uses of capital are on increasing uranium production in terms of more mining. I mean, a lot of development work, as I mentioned, with regard to like vent or shaft work, all that is getting close to being completed.
So basically, for every tonne we mine, there will be cash consumed for the mining. In addition, we're looking at finishing up the Phase 1. Now it's around a $25 million and a significant portion, probably half of that has been spent thus far. We're looking at securing or purchasing additional monazite. That's also a work in progress, the permitting.
But I think the biggest uses are certainly restarting the mines, also advancing our rare earth initiatives. But yeah, we have a strong balance sheet to cover them.
Heiko Ihle
You would be able to quantify any of these line items, would you?
Mark Chalmers
You know, Heiko, I can quantify it more depending on -- I'd rather do it offline. But I mean, for example, each time we mine, an ore is going to cost us somewhere between $100 to $200 a tonne for every tonne that we mine. That doesn't include processing.
But I don't know. Mr. Brock, you're on there. You've been working with some of the budgets for 2024. Is there anything you'd want to add to that in terms of expenditure?
Tom Brock
Yeah. Thank you for that. I think you're spot on that, Mark. Heiko, Tom Brock here. We continue to work through the budgeting process for 2024. We're pretty in tune to what's coming down the pike, if you will, based on our business strategies for '24 and beyond.
But as Mark mentioned earlier, one of the outliers here is M&A activity and our success there.
Mark Chalmers
So you've got the operational activities, but you also have to look at what potential M&A activities we could have that also could potentially consume cash.
Heiko Ihle
Fair enough. I was trying to set up a slightly different question, but I think I want to ask it anyways. I mean, you got $54 million of cash. You got $70 million of marketable securities.
Obviously, there is a cost to ramping up, starting up all that stuff. I mean $162 million in working cap, we're probably beyond any limits of anything that could be really done in a logical way. And I get that you want your balance sheet to be strong because who knows what the future holds.
But is it fair to say that working cap in excess of $100 million, $120 million, $140 million, $150 million is more than enough than we think we really going to need?
Mark Chalmers
You never have too much cash, Heiko. (laughter) But really, really, we're looking at this in a couple of aspects as Tom hit on. We're looking at it at what we need for our -- currently, our business strategy, when it comes to the uranium and reverse but we're also looking at in terms of M&A activity.
So there's two pieces of that. And we're not being shy on sort of the potential scale that M&A could be. And so we're trying to make sure we have plenty of powder here to give us the biggest chance of success on all fronts.
Heiko Ihle
Fair enough. It's been a great year for the company. Keep up the good work, and I'll get back in queue. Thank you, Mark.
Mark Chalmers
Thank you, Heiko.
Operator
Joseph Reagor, Roth MKM.
Joseph Reagor
Hey, Mark and team. Thanks for taking the questions. Following a little bit on what Heiko was asking about the budget next year. Do you have a range, you think, your all-in costs might fall into for uranium once you start the milling campaign?
Mark Chalmers
I have to be careful as you can see there on giving the exact numbers because we don't have exact numbers. But what I have said, this is the -- our lowest -- well, our inventory is around $30 a pound of finished goods. The Pinyon Plain Mine, we expect it to be somewhere between $35 to $40 per pound.
When we look at a combination of Pinyon Plain, these other mines are restarting alternate feed material, we believe it will be under $50 a pound and very competitive -- we're all competitive in terms how we can mix and match. As I said, the inventories, the alternate feed production from Pinyon Plain and other operations. So it's going to be -- I can say, it is pretty good. I believe it will be a well under $50 per pound.
Joseph Reagor
Okay. That's helpful. And then I didn't hear you -- I know you mentioned ISR, but I'm assuming you're referring to Nichols Ranch. Any thoughts there on when we might see a restart? Is there a certain price you need for a certain period of time? Or is it just a certain number in the Q? Like how do we think about that project?
Mark Chalmers
I think I've mentioned it before. When you look at you look at the ISR projects, when you produce a pound of uranium from conventional mine, you can mine it, you can stop that day. You can stockpile it; you can process it. There's a number of steps you can make as you're building your book for production at different steps.
With ISR, once you produce a pound from ISR, you're basically committed to that production for 10 years plus through restoration. And it's harder to stop that process. So we're really looking at when we get the absolute -- the demand signals with long-term contracts supporting that longer-term approach.
I mean, currently, our market contracts go up to about eight years, but we're really looking for that. So we like the way that we can be modular with our conventional mining assets and our alternate feed at this point in time. But we're certainly looking for restart when the time is right. But we think that in our circumstances, the restart of the conventional mines makes more sense at this time.
Joseph Reagor
Okay. Fair enough. And then one final thing on contracts versus inventory. As you guys look out to 2024 with this plan to potentially start milling in the latter part of 2024 or early '25, how do you think about your inventory as far as like available pounds that you could sell if pricing were to spike versus what's under contract? Like how much is that gap left? And how much of it would you be comfortable selling in the right circumstances?
Mark Chalmers
Well, I guess it comes down to in the right circumstances. We look at the inventory that we have on as giving us a lot of optionality on all things, like not only when we mine uranium, how much we mine, and when we process.
We plan to mine more uranium than we have under contract and that gives us ability to play that market when the time is right. So I don't have an absolute answer for it, but we'll always look at what we think makes the most sense for our shareholders.
Joseph Reagor
Okay. Fair enough. I'll turn it over. Thanks, Mark.
Operator
Justin Chan, SCP Resource Finance.
Justin Chan. Your line is now open.
Justin Chan
Great. Thanks, guys. I guess my first question is on just in terms of mining volumes, when you start up time -- to get an understanding of how to model that and what that will look like, do you expect to produce a steady volume of tonnage that either matches your contracts? Or has a higher number? Or will mining be similar processing and campaigns you stockpile or you choose to process it? Just trying to get a sense of that cadence.
Mark Chalmers
Yes, Justin, as I said, we're looking at being able to be in a position in 2024 to, at the very least, mine around 1 million pounds or greater per year. And then depending on how the market matures, we can increase that to 2 million pounds of uranium production per year with limited capital, and then we can go up from there. But then we start having to spend greater quantums of capital.
I mean, generally speaking, we like to be contracted for, I'd say, in the order of at least 50% of our production, Justin. It could be more, could be less, but still more in that kind of order.
So we're planning on about 1 million-plus pounds per year. And as I said, it depends on how we want to mix and match with inventories from $30 per pound to Pinyon Plain and other sources, how we mix it. But it's very competitive. I said it was under 50; it could be in a range of 40 to 50, depending on how you mix and match to serve the requirements that we're doing.
But again, I don't want to be held down to that because of a conference call like this, but it's very competitive. We're very comfortable with our price structures compared to the rest of the world.
Justin Chan
Got you. But if I were to -- so just based on that, once you start out at that kind of million pounds number, you would anticipate -- well, I'd say if market conditions don't change, you kind of produce around that level? And then at some future point, you could increase it?
Mark Chalmers
Correct, correct.
Justin Chan
Okay.
Mark Chalmers
I mean, some of the things that -- like just getting miners rehired and trained and whatnot takes time. So we're comfortable we can get to that million pound level quickly like in 2024. We don't have to process that ore. We'll stockpile it, put it at the mill, keep it at the mine sites, but it will be all along the rate of about a million pounds until we decide to go greater than that.
Justin Chan
Okay, got you. And then in terms of the various side of the business, as you ramp up the separation circuit, do you have enough material right now to, I guess, allow you to ramp up? Are you comfortable with your inventory levels there yet?
Mark Chalmers
Justin, we've been challenged on the monazite quantities. As you're aware of, we received material from Chemours and they've underdelivered. We're still working to resolve that with them.
Yeah. To get to that 800 to 1,000 tonnes of NdPr per year is still subject to securing of adequate feed. I've said we've been talking to a number of parties in that regard.
Now one thing that's working in our favor is that the price of rare earth has come down quite materially since a year ago or so. And that's helping create more urgency with others to supply material to the mill. But that is certainly subject to securing the feed to get to those quantities. And that's around 8,000 to 10,000 tonnes a year of monazite to get to 800 to 1,000 tonnes of NdPr tonnes per year.
Justin Chan
Got you. And then just maybe a question towards that end. I guess, can you talk me through what you expect your timelines are? So there's more drilling in Q4. Would that drilling round give you enough to declare a resource? Or do you think you -- would you anticipate more drilling next year before you put out a resource?
Mark Chalmers
Yeah. We're hoping to put out a resource as soon as we can. It's a large land area. And you can appreciate that when you have a large area, you can't drill without any -- into short order. So we are looking at putting out a resource at least on some areas in the next -- within the next year. We're ramping up the permitting there, community consultation and whatnot. So it's still going to take a few years to get to producing an agency concentrate. But what we do, we plan to ramp it up as quickly as we can.
Justin Chan
Okay. Got you. All right. Thanks very much and I'll free up the line. I appreciate your answers today and congrats on a very, very strong balance sheet, among other things.
Operator
Mike Heim, Noble Financial Market.
Mike Heim
Okay, great. We've talked a couple of times about the mill campaign in '24, '25. I just want to make sure I understand that. Is that simply just talking about getting things started? Or are there upgrades to the system or other type of costs that might come into play that you should talk about?
Mark Chalmers
Well, the '24 time period is really focused on using the mill for the Phase 1 cracking, leaching, and separation into oxides. And that's that $25 million-ish for basically completing the extra SX and the existing SX building. And that's really it.
When it comes to -- when we go back into uranium production at the mill, there really isn't any major capital work that has to go in for that. But we have to flip the mill over so we can produce uranium and vanadium when we elect to do that. So no major capital outside of the, say, $25 million for the SX building for the rare earths.
Mike Heim
Okay. And then maybe a question on rare earth, specifically the costs for the rare earth carbonate. I couldn't help but notice that the cost per tonne dropped 30% year over year. Is that just a reflection of ramping things up? Or are there other items that make that -- I guess what I'm looking forward to is that a reasonable number to use going forward?
Mark Chalmers
One of the problems we have with the carbon, the quantities are so low that it doesn't really reflect the cost in absolute terms because the quantities are so small. So we really got to get it up to get a better cost.
Tom, are you on the line? Can answer any question in terms of the rare earth processing costs?
Tom Brock
Yeah, I would agree with your comment there, Mark, that the fact that we're not fully utilizing efficiently the process for rare earths at this point in time, you're going to find a lot of fixed costs that are not being necessarily absorbed, leading to a higher cost per production. To answer your question, I would not use that as a go forward.
Mike Heim
I mean, it could even get better as production ramps higher?
Tom Brock
Correct.
Mike Heim
And then (multiple speakers) --
Mark Chalmers
Look, Michael, if you looked at like processing 500 tonnes in a year and you need to be up to 1,000 or 10,000 tonnes or something, you can see where there's pretty small quantities to get real material numbers on.
Mike Heim
And then finally for me, I just want to ask one question about the M&A that kind of was a little bit new and I certainly don't expect any exact comments. But can you talk about what type of things you'd be looking to gain through M&A? Is it facilities? Is it reserves? Is it technology? What type of things would you be looking for?
Mark Chalmers
The main thing we're looking for to take the rare earth is what we call pounds in the ground. It's really tonnes of monazite in the ground. And the main thing there is that if you look at their heavy mineral sand business, even a few years ago, monazite was just a waste stream. It wasn't counted to attribute any value into those operations at all; it was even a negative value.
And so we're trying to secure as many of our own sources of monazite as we can at least a few jurisdictions so that we basically own what we bring into the mill. Now that doesn't mean that we're not going to purchase or partner or joint venture in different ways to also bring feed into the mill. But the real key here is to control and have mines that are dedicated to our project going forward because we think ultimately that lead to the lowest cost in rare earth production.
Now on the uranium front, anything that we might look at in terms of M&A on the uranium front would really be how do we get improved synergies with either other blocks of land close to our projects or other projects close to our projects to get better synergies from a uranium perspective.
Mike Heim
Okay. That's very helpful. That's all the questions I have.
Operator
(Operator Instructions)
David McLaughlin.
David McLaughlin
Okay. Well, thank you very much. I was a shareholder in Minas and also Medallion Resources. They are both -- especially Minas been involved a long time in the processing of monazite for rare earth elements. And Medallion was doing a lot of research on various methodologies associated to that process.
I do have -- are using -- I don't know if I can call it a conventional FX module right now. Are you still -- and this is only one of three of my questions possibly, are you looking at less cost effective ones -- less cost intensive ones that are more exotic as far as getting your REE out at a lower cost at the plant level?
Mark Chalmers
We're really looking at using proven technologies, costs to crack for the extraction of the uranium and the thorium. And we're using solvent extraction because we have a long history of using solvent extraction at the White Mesa mill. And so we're using sort of traditional approaches to processing of monazite.
Now our main advantage is we have the ability to deal with the radionuclides with the tailings facility and recover the uranium, where others, it is a bigger problem. So we are focused on existing technologies that are proven, technologies that were --
David McLaughlin
I can't give you enough credit for that because, yes, you are already situated to be in the REE business. And I saw this four or five years ago, and I actually held your stock a little bit then. But you know, of course, your uranium is also going to be possibly extremely more important coming forward here as some of the green energy dreams become not so productive.
And rare earths, I mean, they're so important as far as super magnets go. I wanted to ask, how are you paying -- the Bahia property is huge. Has it produced any material amount of monazite concentrate to date?
Mark Chalmers
No, no, it's really an exploration project. It was quite well known by a number of the heavy mineral sands producing companies.
Yeah. So like 60 square miles, but it was well known, but it also has a good monazite grade. And the monazite grades historically were looked at as a negative. And now they're looked at as a positive. And so that's why we secured Bahia as one of our acquisitions.
And as I said, we're actively looking at securing other acquisitions that are kind of along the lines of Bahia. But certainly, anything that's more advanced in the exploration stages is appreciated.
David McLaughlin
Yeah. Because you don't want to be politically hostage to maybe a non-capitalistic government. Okay. If you do have a very productive mine site in a critical field like a green energy, right? I mean Mexico is already nationalize their lithium properties apparently. But so yes, it will be definitely good to supply.
But this probably doesn't have much of the vanadium, but zirconium, like some of the monazite properties do?
Mark Chalmers
Yeah. It's a traditional heavy mineral sand deposit with titanium, zirconium.
David McLaughlin
Yeah. Okay. And you've done economic analysis as far as what you think it might be to get it concentrate, made in Brazil, and shipped up to your plant?
Mark Chalmers
We're still working through those pieces and steps. But we have looked at it with consultants previously. We have done some sampling and testing in the early stages. And basically, the people at that were helping advisors thought it was a good project. But yeah, you've got to take all the steps to get there. And we're trying to do (multiple speakers) --
David McLaughlin
I can't give you enough credit for doing this. I mean, you know about old Molly Corp. I guess that mine has reopened. So fortunately, we have a little bit of REE production here in the United States. But we need more; we need more. We definitely do. This is -- if our society continues to go forward in an industrial way.
We're kind of going backwards right now in market. And there's all kinds of problems in the world that are going to affect markets going forward. But no, for some reason I looked at your stock the other day and I saw this project, like I can't give enough credit for getting involved in this. And I hope it really works out well for you.
Mark Chalmers
So thank you. We hope it works out well as well and we plan to make up for that.
David McLaughlin
No. It is a natural fit for uranium processing because there is frequently a decent amount of uranium or radioactive materials in monazite and you already deal with them. Okay.
And I don't know about thorium. I mean, there's a -- people have been talking about going into thorium as a nuclear plant fuel for a while. It just doesn't seem to be happening. And I don't know if there's that much thorium and then there's monazite down in Brazil.
But it looks like -- and I don't know how well disseminated the monazite is in your area. You're going to find some of that out as you drill, I think. But hopefully, you'll either find the pockets or they will be well enough disseminated, but still rich enough to make this -- be a good source of monazite for you. You don't have to rely on somebody else, to consult with somebody else. If it's yours, you control it.
Mark Chalmers
Correct. That's the key. Controlling some of these projects to dedicate them to our requirements and our infrastructure.
David McLaughlin
Right, right. I wish you a lot of luck on the uranium side, too. I mean, we haven't built a nuclear plant here, I don't think, in a long time. And you know, there's resistance to that. We all know why. I mean what was in Japan? I mean, I put duct tape on my windows two days after I heard about what happened there. I saw it on the -- in any case, if we're going to try to get away from fossil fuels, which ultimately, we might have to -- I'm not a green energy, I'm not a climate change. I think it's a scam for political purposes, political control purposes and taking over the economy.
But in any case, we've got to keep moving forward and trying to find ways to get more out of the energy we have. It takes a decent amount of energy to make electricity so that we can use rare earth magnets and get a lot of more force out of than conventional electric motors. And boom, it's a plus. So anyway, thank you very much.
Mark Chalmers
Thank you.
Tom Brock
Thank you.
Operator
There are no further questions at this time. I would now hand the call back over to Mr. Chalmers. Please continue.
Mark Chalmers
Okay. Well, thank you, John. Yes, look, in closing, thank you for your time and your interest in Energy Fuels. As I said, we are a unique story, being able to do all these different things that others cannot do because of the uranium -- contained uranium and the radionuclides -- low-level radionuclides.
And as I said, whether it be the rare earths or the uranium, particularly uranium, we can mix and match between existing inventories and whatnot to build price -- competitive pricing to fit a number of different requirements. And that is, in itself, very unique and it's very competitive. So we believe we have a very bright future.
I always say that we're going to be aggressive and not reckless. We plan to continue to have a strong balance sheet to put us in the strongest position possible for our new uranium production, our new rare earth production in processing, and M&A as and when it is -- it makes sense for our company. So we want to be in a strong position. We want to deliver exceptional results as we go forward in this whole critical mineral area.
So thank you very much and that concludes the conference call.
Operator
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.
