[Dick_Nixon]

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Energy Fuels: A High-Leverage Play on the Uranium Price
Wednesday March 26, 2014, 1:41pm PDT

By Vivien Diniz - Exclusive to Resource Investing News

Rob Chang is a Metals and Mining Analyst at Cantor Fitzgerald Canada. He has covered the metals and mining space for over eight years for the sell-side and the buy-side. Prior to Cantor, Chang served on the equity research teams at Versant Partners, Octagon Capital and BMO Capital Markets. His buy-side experience includes managing $3 billion in assets as a director of research/portfolio manager at Middlefield Capital, where his primary resource portfolio outperformed its direct peer and benchmark by over 28% and 18%, respectively. He was also on a five-person multi-strategy hedge fund team, where he specialized in equity and derivative investments. He completed his Master of Business Administration from the University of Toronto’s Rotman School of Management.

RIN: We keep hearing about this uranium renaissance, but nothing has really happened yet. What’s been keeping the bull market for uranium at bay?

RC: In our opinion, there are two primary reasons prices remain low. First off, it’s the higher-than-normal inventory levels, and that’s mainly due to Japan not consuming the 20 million pounds that it usually consumes per year. Because of that we’re seeing a larger-than-normal inventory globally, so markets have 40 to 80 million pounds out there.

On top of that, we also have some markets waiting for Japan to announce the restarts of its reactors. There is a school of thought out there that believes Japan may never turn on any of the reactors although much of that dissipated with Japan’s recent announcement on its energy policy. However, as long as some of that still exists, there’s still going to be a little bit of an overhang, and a little bit of disbelief that the uranium renaissance, so to speak, will start.

That being said, we believe that’s unlikely for a couple of reasons. First off, Japan is running at a $75-billion deficit annually because of the substitution from nuclear power to other sources. That’s something it can’t afford given that the country continues to struggle economically.

On top of that, if we look at the global demand scenario and how it is shaping up, even if Japan doesn’t turn on all its reactors, the rate of growth will be so much that it doesn’t quite matter. In fact, given the current supply and demand situation, even if Japan doesn’t turn on any of its reactors, a major imbalance will still occur. Perhaps a little bit later, but it will still occur.

RIN: The general consensus is that uranium prices will go up. Do you have an idea of when that might happen?

RC: Our estimate is that’s going to be during the back half of this year. That’s when we’re going to really see the start. The reason is that from reports from utilities and producers, 2016 is the year when a lot of the utilities’ requirements will become uncovered.

What I mean by that is, generally utilities forecast how much uranium they need and make long-term contracts to get the supply in advance. However, because of the low price environment we’ve seen for awhile, many producers have been reluctant to negotiate at the lower prices. On top of that, utilities have been rewarded for waiting to lock in long-term contracts because the prices have been declining steadily, almost on a monthly basis. When you put those together, you’re seeing a lot less contract activity happening in the last few years. It’s to the point where, if we had full coverage, or close to full coverage of the last few years, in 2016 it flips dramatically to largely uncovered.

Knowing that, and being that we are only two years away, 2014 is the key year. We have a perfect storm happening.

RIN: Do you have an idea in terms of a target price? Are you expecting long-term prices to go up pretty quickly?

RC: Absolutely. We think prices will move pretty dramatically. For this year, we believe the price will average $43.25/lb. Then, next year, $62.50/lb and then $70/lb after. Given that we have $35/lb now, it’s going to be a pretty dramatic leap up.

RIN: That sounds good. You released a note on the US Department of Energy approving billions of dollars worth of nuclear loans. Can you elaborate a little bit on what that means for the nuclear landscape in the States? How does will it impact companies?

RC: The US is the number-one consumer, globally, of uranium and consumes about a quarter of global demand. There has been some thought that the US will be stepping away, or at least stagnant, in its uranium consumption.

This approval effectively green-lights Southern Co.’s Vogtle nuclear reactors in Georgia, and it shows the US is headed towards building more nuclear power. That shows domestic demand within the US, and is certainly positive that the country is going to consume more rather than the fear of them actually scaling back.

RIN: As far as the U.S. is concerned, what I’ve been hearing a lot more is to look at the ISR producers. What’s the difference in terms of economics between the hard-rock mining and the ISR mining?

RC: The difference between the two is that for ISR mining, it is solution mining. ISR miners are able to produce at a relatively low cost because essentially what they’re doing is drilling two holes. With one hole, they’re pumping solution into the ground; basically, soda water. On the other side they’re pulling it out. In between it’s dissolving uranium, making it mobile and sucking it up. It’s kind of an elegant low-environmental-impact way of mining. Generally, it’s lower cost because there’s very little rock moving and a lot less heavy equipment to operate the mine. That being said, it generally produces lower yields.

For the U.S. ISR producers, many of the ones that are emerging, or currently running, they’re generally expected to produce anywhere between 200,000 pounds to – when they’re fully ramped up – a million, maybe 2 million pounds. That’s pretty much their limit, given the type of mining method that they’re using and the size of most ISR amenable deposits.

Hardrock miners, such as Energy Fuels, which mine underground, and potentially open-pit as well, are the larger operations. Associated with them are higher costs, but they are capable of producing at a much larger scale. Whereas ISR producers would be doing 200,000 to a million pounds, EFR could scale up to multimillions rather easily, just like any other conventional type of mining you see. Higher cost is definitely higher production potential.

RIN: Just to look a little bit at Energy Fuels (TSX:EFR, NYSEMKT:UUUU), I’ve noticed that they get a lot of attention. They’re a pretty solid-looking company. What is it that draws this attention?

RC: There are a couple of really compelling points for Energy Fuels. First off, when you look at the fact that they own the only conventional mill in the entire US, that’s an important strategic advantage. There is no other place that you can conventionally mill uranium material, other than at the White Mesa mill.

The second thing is that it has a very impressive portfolio of projects, and past producing operations to the point where even though it is not currently operating in the current low price environment, quite a few can be turned on within six month and could probably over the course of a few years be able to ramp up production to anywhere from a million to potentially even 4 to 5 million pounds per year. When the price is right, EFR can act relatively quickly and be able to produce large amounts of uranium fairly quickly, capitalizing on the higher prices.

RIN: In terms of the significance of the White Mesa mill, you mentioned they are the only conventional mill in the US. What kind of a growth potential does the mill offer the company?

RC: The growth potential is that it has a strategic advantage for any new acquisitions because it will have the best cost profile in terms of figuring out the economics of acquiring projects. What I mean by that is if a competing company was to bid for a conventional mining asset, it would still need to factor in the cost of building its own mill … or the cost of paying EFR to mill the material for them. In contrast, EFR has that already built into their cost, and that’s a huge strategic advantage, because it can process it with its own mill – there isn’t that additional cost involved.

On top of that great negotiating power, EFR will have full visibility on the supply situation, at least on the conventional side, throughout the US. That’s because everyone has to go through EFR to process their material. It gives the company good informational advantages, and strategic acquisitions advantages as well.

RIN: Will Energy Fuels be taking advantage of toll milling?

RC: Absolutely. Toll milling gives EFR great opportunities to process other material at a very nice price. Since there is no competition, those using the toll mining services really have nowhere else to go, it’s certainly a very important key for Energy Fuels.

RIN: I found a December interview with Stephen Antony where he comments that Energy Fuels offers unique exposure to the growth of nuclear energy and the resulting uranium price increase. I think we touched a little bit on this already, but can you elaborate a little bit about what he may mean by that?

RC: It’s a high-leverage play on the price of uranium because the company is a higher-cost operator. When prices are low, of course the higher cost operator will not do as well as low cost producers, but if prices go higher, the company can make the decision to produce from its various operations fairly quickly. And as I said, within six months to about a year and a half it can produce up to 4 to 5 million pounds annually, quickly taking advantage and selling to the spot market that large volume of new production.

Keep in mind, the US only produces around 4 to 5 million pounds total, so EFR could effectively double US-based production if prices rise quickly. It can go from a company that is breaking even to a company that becomes very profitable very quickly. So that’s an excellent play. On top of that, the company owns a mill, so it gets to see supply coming from other locations, and of course, change prices accordingly to capture increased demand and increased desire to use its mill. That gives the company additional leverage.

RIN: You just mentioned how much the US produces per year, roughly. Is demand expected to grow?

RC: It’s expected to be mostly sideways. With the building of the new reactor right now, it’s certainly going to be positive. Long term, we still believe that the country is going to add anywhere between eight to 15 reactors from now until 2025. Globally speaking, the US accounts for about a quarter of the world’s power consumption of uranium, so it’s the world’s number-one consumer.

In total, the country consumes about 50 million pounds of uranium and produces about 4 to 5 million pounds. Because of that, the domestic security of supply is really important. Anyone producing from the US should get a premium simply because the US needs to have secure domestic sources of this material.

RIN: I heard recently that the DOE is actually selling some of its stockpiles of uranium. Is that true?

RC: Yes, the DOE uses that material to finance other parts of corroborations. For example, they’re decommissioning an enrichment facility, and they’re partially financing it by selling their inventories. So they have been doing that. It’s anywhere between 1 to 5 million pounds per year, sometimes up to 7 million. We do factor that into our model, and it’s expected that they will continue somewhere around that range.

RIN: Is that a strategic move on their end?

RC: They have a really large supply. They can afford to sell this material to finance projects and with this era of fiscal constraint, economics now rule the the day.

RIN: They aren’t even getting the best price for it at the moment, are they?

RC: Not at all. The ideal situation is that the DOE holds onto the material and does not further flood the market with material.

RIN: Now, Energy Fuels has a few partnerships with Cameco and Sumitomo. How do those factor into the company’s model?

RC: They certainly give support given that those are two large and notable organizations that have checked the quality of EFR’s portfolio and are backing the company. That certainly lends more credibility to the company, and those are experienced investors. That’s why I certainly believe it’s a positive to see them on the shareholder register.

RIN: What should investors be on the lookout for in regards to Energy Fuels in the coming year?

RC: The key thing really is the uranium price. Once it starts moving higher, it becomes an increasingly compelling story. As general market activity picks up, because it has a mill, the company is set to do very well; it is set up to become a good consolidator of the uranium space, especially on the western side of the US.

You may also see the company opportunistically pick up some good assets, which is going to be good for the overall portfolio. Overall, it’s a good leverage play.

RIN:Well that’s I have for today. Thank you for joining me Rob.

RC: Thank you.







Editorial Disclosure: Energy Fuels is an advertising client of the Investing News Network. This interview was conducted as part of their advertising campaign. This is paid-for content.

Rob Chang did not received compensation from the company for participating in this interview.

Securities Disclosure: Vivien Diniz holds no investment interest in any of the companies mentioned.

Rob Chang and Cantor Fitzgerald hold investments in Energy Fuels.



Tags: Energy Fuels, OTCQX:EFRFF, tsx:efr, uranium market, uranium price
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[Dick_Nixon]

Ignite Your Portfolio With This Radioactive Pair Trade: Short Uranium Resources And Long Energy Fuels
Jul 30 2013, 10:30 | about: URRE (Uranium Resources, Inc.), EFRFF.PK (ENERGY FUELS INC), includes: USU
Editor's notes: URRE's recent run-up has left it drastically overvalued and EFRFF.PK accordingly undervalued. A former hedge fund analyst who called OCLS's decline likes the combination as the market looks closer.
Alpha-Rich articles are our best money-making long and short investment ideas.
They are released exclusively to Seeking Alpha Pro users 24 hours before publication.
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Disclosure: I am short URRE. (More...)

EFRFF Should be Trading at Conservatively 10x the Valuation of URRE

As an analyst, I will admit to having a short bias by nature in the current market. This is mainly a function of the significant run-up in the overall equity market recently, and my thinking that a market correction may be in store in the near future. That being said, I know it is a much more difficult, and oftentimes futile, effort to try and time the overall market than it is to perform the diligent fundamental analysis required to find the best companies to both invest in and to bet against. As a result, I am always scanning for what seem to be the most primed stocks both to outperform and underperform in a given sector, looking to put on both a long and short trade at the same time in the same sector. A "pair trade" allows an investor to hedge out some market risk while also allowing for the potential of outsized gains by investing with the best and betting against the worst. Some of the largest and most sophisticated investment funds, including the largest hedge fund in the world at Bridgewater Associates, have been known to use pair trades often.

I found what looks to be a perfect setup for a pair trade with the recent run-up in the share prices of several uranium stocks. Not every stock in the sector enjoyed this run-up, including what I believe to be the strongest fundamental company in the uranium sector from a valuation perspective. This is a big positive in terms of timing an investment for the long side. I will get back to this company in a moment.

Unsubstantiated, Other-worldly Stock Price Takeoff in Two Particular Uranium Stocks

The shareholders of two uranium stocks in particular enjoyed quite spectacular elevator rides up in recent weeks: USEC Inc. (USU) has gone from $2.96 on July 8th to closing at $29.02 yesterday, rising almost 900% in just three weeks. Fellow Seeking Alpha author J Mintzmyer just put out a piece yesterday on why he thinks investors should stay away from USEC at the current price.

I had looked at USU before this article, and now, even after having read it, there is one uranium company that stands out to me as a significantly better short opportunity: Uranium Resources (URRE). There are several outside factors in play that caused an unjustified double in share price over just a one week period for URRE. In some ways, URRE reminds me of another company, Oculus (OCLS), that I covered thoroughly here and here on Seeking Alpha and recommended readers to short the stock when the share price was $6. Just as fast as Oculus had risen to $6, it came back to its current share price of $2.76. I expect a similar fate for URRE once investors realize this is not the stock to be holding to get the leveraged benefit of an upside turn in the uranium market.

As previously mentioned, there is one uranium company that I have found stands particularly poised to benefit from what seems to be a consensus among analysts will be a near-term significant rise in uranium spot prices. This rise in uranium spot prices will be a product of good old-fashioned supply and demand economics. I like when investment theses can be spelled out almost as simply as these three charts help show:

Here are two charts showing the increasing demand and resulting shortage of supply in the overall uranium market:

(click to enlarge)

(click to enlarge)

Now here is a Uranium Mine Production Cost Curve put together on 2010 data from the World Nuclear Association suggesting US$40/lb is a marginal price:

(click to enlarge)

The World Nuclear Association also notes at the bottom of this chart that "the cost curve may rise steeply at higher uranium requirements." It is pretty clear from the two charts above it that the uranium requirements have already risen significantly since 2010 and are set to continue to rise even more significantly. Production will not be able to keep up with supply. The U.S. alone consumes 55 million pounds of uranium each year while producing just 5 million pounds. The company I referenced earlier that I believe to be the long in the uranium sector is responsible for 25-30% of U.S. production while having the only operating conventional uranium mill in the U.S. This company is Energy Fuels (EFRFF.PK).

Here is the chart of Energy Fuels, where you can see the price run-up prior to Fukushima in 2011 when uranium spot prices went from $40 to $70:

(click to enlarge)

Here is the uranium spot price chart showing the price run-up from $40 to $70 prior to Fukushima:

(click to enlarge)

History Repeats Itself; Smart Money Again Backing Energy Fuels

Another key thing to note regarding the 10x jump in Energy Fuels stock price shown above, in addition to the rise in uranium spot prices during the same time frame, was the smart money that invested in Energy Fuels at $0.16/share in 2010 and experienced the 10 bagger potential here firsthand. Dundee Resources acquired a 19.8% ownership interest in Energy Fuels on July 7, 2010 at $0.16 per common share, right before the stock rose to $1.40 a share. Dundee Resources is a renowned smart-money investment fund in the resource space. Ned Goodman, the CEO of Dundee, and his firm have gotten so behind Energy Fuels that his son Mark Goodman joined the board. A top investment banker in the uranium space, Graham Moylan from Goodman's own Dundee, joined the company as CFO as well. This speaks volumes about Dundee's belief in and commitment to Energy Fuels.

More importantly for us as investors today, Energy Fuels' stock is back to $0.18 per share and Dundee just invested again at $0.14 per share last month. History repeats itself and smart money gets into the beaten down sectors ahead of the curve. Now is the time to get in alongside them and ride the wave again.

This table that Dundee Securities put together is an eye-opener as well in regards to the current severe mispricing of Energy Fuels' stock:

Further Analysis and Breakdown Between URRE and EFRFF

This past week URRE was up 112% vs 6% for EFRFF in the same time period. URRE's share price performance was likely primarily a result of the Japanese upper house election results last Sunday, which many believe paves the way for the historically pro-nuclear LDP party to re-start the vast majority of Japan's 50 nuclear reactors. These reactors have been idle since the March 2011 Fukushima incident. The re-start of Japan's reactor fleet could have an even further significant impact on near-term uranium demand and uranium prices.

The outlook for uranium prices is already very bright given the robust growth projected in nuclear power worldwide, but the re-start of nuclear reactors in Japan could be an important near-term catalyst. The uranium spot price has fallen from $73 per lb. pre-Fukushima to its current level of $34.50 per lb. The U.S. is the largest nuclear power market in the world, but is heavily reliant on imported uranium for ~90% of its supply requirements. The Russia-U.S. HEU agreement, which currently supplies the U.S. with ~50% of its imported uranium, is set to terminate in November 2013. As such, many market observers, including myself, believe that it is an ideal time to look at U.S. uranium producers.

A number of investors last week went to URRE as a means to get exposure to a brighter outlook for uranium prices. Below are eight reasons why I believe investors looking for exposure to a strengthening uranium market should be buying Energy Fuels and Shorting Uranium Resources:

1. Bona Fide Uranium Production

EFRFF is a substantial U.S.-based uranium producer, the second largest in the country with guidance of 1.175m lbs of uranium production for the current fiscal year. URRE will have no uranium production in the current fiscal year. URRE will most likely have minimal (50,000-100,000 oz) to no production next year either.

2. Control of the Only Conventional Uranium Mill

EFRFF owns the only licensed, operating conventional uranium mill in the U.S., the White Mesa Mill in Blanding, Utah. It is a very costly and time consuming process to permit and build a new uranium mill in this country, creating a very significant barrier to entry in the U.S. market (currently the largest nuclear power market in the world). URRE does not have a conventional mill and therefore its conventional uranium resources are "stranded" from a production perspective, unless it can actually permit and build a new mill or negotiate access to White Mesa from EFRFF (for example through toll milling).

3. Scalability

EFRFF has a truly scalable production base that can increase as uranium prices increase through its standby mines, other development projects as well as toll milling opportunities. URRE's potential production from its ISR projects is comparatively smaller with less scale.

4. Quality Uranium Sales Contracts with Utilities

EFRFF will deliver ~1 million lbs of uranium in its current fiscal year pursuant to contracts with three different utilities at a realized price of $56 per lb, a 60%+ premium to the current spot price. A key consideration for utilities when entering into long-term uranium supply contracts is security of supply. URRE has two contracts with foreign trading houses that have realized prices based on discounts to either the quoted uranium spot or long-term prices.

5. Analyst Coverage and Target Prices

According to Bloomberg, EFRFF has four covering analysts with an average target price of $0.3775, a 102% premium to yesterday's closing price. URRE only has coverage from one analyst with a price target of $3.90, a discount of 27% to yesterday's closing price.

6. Acquisition and Growth

EFRFF is growing. EFRFF is in the process of a major acquisition of Strathmore Minerals (STM-T, STHJF-OTCQX) which presents numerous operational synergies and greatly enhances EFRFF's production scalability. URRE recently announced significant cost-cutting efforts and in its most recent 10-Q indicated that it will likely need to issue equity pursuant to an ATM share offering program over the next 12 months to meet its funding requirements. This means shareholders are facing likely large dilution in the near-term.

7. Key Strategic Partner

KEPCO is Energy Fuels' (and Strathmore's) largest shareholder and is supporting Energy Fuels' acquisition of Strathmore (as announced last week). KEPCO invested $8 million in Strathmore in 2012 to develop Strathmore's Gas Hills project in Wyoming. There could be significant synergies between Strathmore`s Gas Hills project and its Sheep Mountain project in Wyoming which are only 28 miles apart. In 2012, Energy Fuels released a Pre-Feasibility Study on Sheep Mountain which described attractive project economics under three separate production scenarios, with the preferred scenario having a Net Present Value of $201 million (using a 7% discount rate and $65/lb. uranium price) and a production rate of up to 1.5 million lbs. per year and an initial mine life of 15 years.

Conclusion

M&A activity has picked up in the uranium market, which can typically signal a market bottom as major players eye value in the space. I believe Energy Fuels offers the best combination of limited downside in current market conditions and leveraged upside to rising prices in the Uranium spot price market. On the other end of the spectrum, Uranium Resources has significant downside risk, particularly after its share price just doubled in a week and there is the near-term likelihood of the company accessing its available $9 million in share value under ATM. Its future looks far bleaker as well in terms of any potential upside with no current or near-term production.

Upon completion of the Strathmore acquisition, Energy Fuels will have a fully diluted market cap of $180 million at its current share price. Uranium Resources currently supports a $110 million market cap. Being conservative, based upon Energy Fuels' current production of ~1 million pounds of uranium per year and an optimistic projection for Uranium Resources of 100,000 pounds of uranium next year, in addition to everything else discussed in this article, Energy Fuels should be trading at 10x the valuation of Uranium Resources.

I believe a pair trade of going long Energy Fuels and short Uranium Resources is the ideal way to play the uranium sector.

Additional disclosure: I am long EFRFF
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[Dick_Nixon]

Denison finalizes $110M deal to sell U.S. assets to Energy Fuels
By The Canadian Press | May 24, 2012
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TORONTO - Denison Mines Corp.(TSX:DML) has reached a definitive agreement to spin off its U.S. assets in a mostly stock deal that will see its shareholders receive a controlling interest in fellow uranium miner Energy Fuels Inc. (TSX:EFR).

Under terms of the stock-swap deal valued at more than $100 million, Energy Fuels will issue a promissory note and a nominal amount of cash to acquire Denison's U.S. mining assets and operations as well as all of the inter-company debt between Denison and the U.S. mining division.

Toronto-based Energy Fuels will later pay off the note by issuing some 425.4 million common shares to Denison's shareholders, who will then own about 66.5 per cent of the stock in Energy Fuels.

Based on Wednesday's closing price of 26 cents per Energy Fuels share, the deal would have a value of about $110 million.

The arrangement, which is subject to shareholder and regulatory approval, also calls on the parties not to solicit competing offers and provides the right to match any superior proposal. A reciprocal break fee of $3 million is payable under certain circumstances.

In the past, analysts have said that Denison, by divesting its U.S. assets and operations, would make itself a more attractive takeover prospect.

Back in April, RBC Capital Markets analyst Adam Schatzker said the U.S. operations "acted as a poison pill for potential acquirers."

"The U.S. assets suffered from unpredictable grades, fluctuating production and high cash costs," Schatzker wrote in a note to clients.

"While they offered investors financial leverage through high operating costs, they were likely not attractive to more senior mining companies. On the other hand, the Canadian assets, located in the heart of one of the top uranium camps in the world, offer the potential for world-class discoveries."

Energy Fuels president and CEO Steve Antony said at the time that the proposed deal would be transformational for his company and reshape the landscape of the uranium sector in the United States.

"It combines the highly strategic asset of the only operating uranium mill in the U.S., White Mesa, with a significant resource base that substantially increases White Mesa's available feedstock."

"The result is an unmatched production growth profile and the opportunity for both Energy Fuels and Denison shareholders to benefit from the clear operational synergies that result from this transaction.''


http://www.canadianbusiness.com/article/85353--denison-finalizes-110m-deal-to-sell-u-s-assets-to-energy-fuels

[Dick_Nixon]

[Dick_Nixon]

Small Uranium Stocks Tempt Major Players
Companies / Uranium May 09, 2012 - 01:53 AM

By: The_Energy_Report

Companies

Best Financial Markets Analysis ArticleInvestors may still be holding their breath, but larger mining companies aren't waiting around for the price of uranium to go up. No, indeed, they are buying smaller companies on the cheap. In this exclusive interview with The Energy Report, Equity Research Analyst Rob Chang of Versant Partners makes his case for deep value and discusses his favorite plays. With or without Germany and Japan, life goes on for uranium producers.

The Energy Report: Fourteen months after the fact, the biggest story in uranium is still the tsunami that struck Japan and destroyed four nuclear reactors at the Fukushima Daiichi nuclear power station. Japan is attempting to eradicate its dependency on nuclear energy. Are any plants still operating? Will all reactors be shut down in the near future?

Rob Chang: My numbers indicate that there are 50 reactors in Japan in total with only one still operating, and that last one is scheduled for a regular maintenance shutdown in early May. Since the Fukushima disaster occurred, every reactor that has been turned off for routine maintenance has not been permitted to restart. By mid-May, Japan will no longer run on nuclear power at all.

TER: There is a huge rise in carbon emissions in Japan, where fuel oil consumption for power production has doubled. Are drastically increased emissions likely to affect policy decisions in Japan, Germany or elsewhere?

RC: The carbon emissions are certainly growing. For Japan and Germany, an incredible rise is expected. There was an estimate that over the next few years, the increase in CO2 for Germany alone will be between 170–400 million tons (Mt) of additional CO2, which completely contradicts the country's previous goals. The populations and governments of these two countries are currently putting carbon emission concerns behind their fears of nuclear power. Germany is aggressively following its anti-nuclear power path while moving toward renewables and using other sources of power, such as natural gas, which unfortunately does generate a lot of CO2. Whether the country decides to go back to its original commitment of reducing CO2 emissions or to stay the path of avoiding nuclear at all costs will certainly be an issue, considering that alternative energy sources can't yet meet their energy demands.

TER: It sounds like there could be some very interesting alternative plays emerging from Germany and Japan's planned energy shifts, as both countries have large economic bases.

RC: That's the goal for both countries, to move toward alternative energy, which includes solar, wind power, hydro and geothermal. The problem with that is none of these can really provide a consistent form of baseload power. With solar, if you get a sustained period of darkness, you're going to have problems. You could also have a lack of wind, or a lack of suitable locations to build dams to generate hydro-electric power. As for geothermal, Japan has some capacity, but studies show that it's not enough to fully replace nuclear.

TER: What are the predominant, global sources of baseload energy?

RC: Baseload sources of power, those that are available at all times, include natural gas, coal and nuclear. Of the three, only one is zero-carbon emitting after being built, and that would be nuclear power. That's the big argument in favor of nuclear power. It is pretty much the only source of baseload power that solves all of the problems in terms of carbon emissions, low-cost power production and being relatively safe outside of the potential of nuclear meltdowns. Even when we look at Fukushima, it's really more about fear than reality. Nuclear power is still quite safe.

TER: Rob, you said nuclear is low-cost compared to other forms of energy. Tell me more.

RC: The costs of operating a nuclear power plant after it's already been built are probably the lowest among all energy sources. If you look at it in terms of alternative energy, which are heavily government-subsidized forms of power, it's actually very expensive to run those projects. On top of that, you still have the additional not-in-my-backyard problems for wind farms, which many people dislike. Although alternative forms of energy sound like a great option, nuclear power makes a lot more sense.

TER: Looking at a chart, uranium seems to have some support at about $50/pound (lb), and it seems to be in a trading range now with resistance at around $55/lb. That looks like a consolidation pattern to me.

uranium

RC: I'm more of a fundamentals analyst than a technical analyst, but I do observe the same patterns that you're seeing. It seems like it's trading in that range primarily because of near-term supply and demand fundamentals. Two, three or five years from now, if mine production schedules go the way they're supposed to, we should be in balance, with maybe even a slight surplus.

TER: Where is new supply coming from?

RC: The three primary mines that are coming online that are expected to meet upcoming demand are Cigar Lake in the Athabasca, run by Cameco Corp. (CCO:TSX; CCJ:NYSE), the expansion of Olympic Dam by BHP Billiton Ltd. (BHP:NYSE; BHPLF:OTCPK) in Australia and the Imouraren mine that's run by AREVA (AREVA:EPA) in Niger. Together, these make up the bulk of the upcoming supply that's theoretically supposed to balance the increase in demand. That's assuming the World Nuclear Association's best-case scenario, as presented last year, unfolds. Demand may be lower or higher, but it does take into account the shutdowns in Japan and Germany.

TER: Does this consolidation pattern have anything to do with the acquisitions we've been seeing in the industry?

RC: I can't really say it is definitely a consolidation pattern. But when you are seeing consolidation in the industry, you generally see it in the low parts of the market when larger firms can see value in other firms and believe that their prices are going to go up and markets are going to be better. They might as well buy now when it's cheap and get bigger. We are certainly seeing that now, and we have been seeing that for the last two years. In my opinion, we're going to see more of it going forward.

We've seen some pretty nice ones—the Chinese buying Extract Resources Ltd. (EXT:TSX; EXT:ASX), Fission Energy Corp. (FIS:TSX.V; FSSIF:OTCQX) getting Pitchstone Exploration Ltd. (PXP:TSX.V) and now Energy Fuels Inc. (EFR:TSX) acquiring the U.S. assets of Denison Mines Corp. (DML:TSX; DNN:NYSE.A). These represent a lot of very positive signs for the industry because usually when you see consolidation, it signals the bottom in most industries. It looks as though we may be seeing that as well here.

TER: What about uranium price? Will it remain weak, as it is now at $50–55/lb.?

RC: It could, unless we have a catalyst. Right now, it seems like a very comfortable range for uranium. The main catalysts that many are waiting for is Japan's possible decision to restart its nuclear reactors. Once that happens, I would bet that we would see a run-up in the spot price. How far up it goes will be tough to say. It will entirely depend on how aggressive the nuclear roll-out or re-ignition occurs in Japan. For most of us, we believe that it's not a matter of if, but when the reactors are restarted. The government has already decided that it needs to. It's more a matter of getting the locals and the mayors in the areas to sign off on it. But once that happens, we should see the price go up.

TER: What is your price forecast?

RC: I believe uranium prices will rise a little bit, from here at least. For 2012, we're expecting an average price of $55/lb.

TER: If it rose above $55/lb, would that create a secular bull trend in uranium equities?

RC: I believe so. The uranium equities have been moving higher over the last six to eight months, primarily based on the fundamentals despite the fact that the uranium price hasn't moved. I fully recognize that they've come off highs from January and February, but overall they're still up relative to the Fukushima event. I believe that as the uranium spot price moves higher, there will certainly be more interest in the uranium equities.

TER: What names are you recommending to investors?

RC: The three names that we cover are Energy Fuels, Fission Energy and Kivalliq Energy Corp. (KIV:TSX.V). We still are very bullish on all three.

TER: Ok, let's take Energy Fuels first.

RC: As you know, Energy Fuels acquired the U.S. assets of Denison Mines, but Denison has been getting most of the publicity because it is basically cleaning itself up to be acquired by Rio Tinto (RIO:NYSE; RIO:ASX) for its Athabasca assets. However, people should be recognizing Energy Fuels as a big winner given that it has established itself as the premier producer in the U.S. That's pretty significant, because the U.S. is the largest consumer of uranium. The U.S. consumes over 50 million pounds (50 Mlb), but it only produces 4 Mlb/year. So there's a massive shortfall between U.S. demand and supply. Security of supply is always going to be important for power generation.

Another thing is that Energy Fuels acquired the White Mesa mill from Denison, which allows it to put its Energy Queen and Whirlwind mines into production. Those are two turn-key mines that could be turned on within a year of the production decision. Those two mines are basically on pause while Energy Fuels clears all of the permitting and rebuilding hurdles for the Piñon Ridge mill, but now that it has acquired the White Mesa mill, it no longer needs to wait for Piñon Ridge. It can just go and process everything through there. So, unlocking those two mines will allow it to produce over 1 Mlb/year in the U.S. and provide immediate upside. There aren't that many producers out there, and Energy Fuels is a new producer on the block. I can see the company commanding a premium once the dust settles.

TER: Your target price on Energy Fuels is $1.10, which is an implied 300% return from here. Do you believe that startup of these two turn-key mines is going to be the catalyst for that kind of move?

RC: It's one of many catalysts. It's a near-term producer now, so that is also factoring the net asset value (NAV) of the production coming from those mines. It factors in all revenue streams coming into the company. The reason why, in my opinion, Energy Fuels has been trading this low is that uranium has been out of favor and Energy Fuels has been viewed previously as a developer that was not producing and still needed a permit. These hurdles have been addressed, improved upon or eliminated. I think once people give Energy Fuels a good hard look, they will realize it's significantly undervalued.

The overall market has been pretty negative, so investors are pretty reluctant to deploy capital. And they generally prefer producing companies that are large and subsequently safer. Energy Fuels has historically been a developer, but will be a producer after the deal closes. For this combination of reasons, it is not moving up as much as it should be. I believe that this is temporary and when sanity returns to the market, Energy Fuels will rise.

TER: What about Kivalliq?

RC: Kivalliq has the highest grades of any uranium company outside of the Athabasca Basin, 0.69% U3O8. The global median for U3O8 grades is 0.07%. So at 0.69%, Kivalliq is actually one decimal spot to the left of the global median. Kivalliq is located in Nunavut, which does present some challenges given there is little infrastructure in the area. However, the company already has 27 Mlb of this high-grade uranium near the surface. It has the potential of getting a lot more. There is the possibility that it could grow this to a +100 Mlb resource with the proper time and drilling. This makes Kivalliq a very interesting company. Another reason to like this company is that to the northeast of it, AREVA is developing the Kiggavik uranium deposit, which is a +100 Mlb uranium deposit. AREVA is way ahead of Kivalliq in terms of exploration/development, and there may be some synergies involved there in terms of Kivalliq being able to use AREVA's infrastructure builds. So I'm very positive on Kivalliq.

TER: Kivalliq has been weak for the past month. Does that make it even more interesting to you? Do you see it as a deep value currently?

RC: Absolutely. I have $1.10 target price for Kivalliq as well. That's about 150% of upside from here. So I believe there is lots of upside.

TER: Your third pick was Fission.

RC: I really like Fission Energy. This is in the Athabasca Basin, located right next door to Hathor Exploration, which is now Rio Tinto's Roughrider deposit. In fact, the western extension of the Roughrider deposit actually goes over the border into Fission's territory. If Rio Tinto was to ever develop this, it would make a lot of sense to develop that little nub that goes over the border. There's no reason for Rio Tinto to stop right at the property line. A few meters to the west of that is Fission Energy's J Zone deposit, which has an initial NI 43-101-compliant resource of 9 Mlb that it announced earlier this year. It would make a lot of sense for anyone, like Rio Tinto, wanting to consolidate the region, to buy Fission Energy next door as well as Denison's and AREVA's assets. Within a 5 kilometer (km) area, there is already more than 110 Mlb of uranium. So it would make a lot of sense for one company just to consolidate the whole region.

TER: An acquisition certainly does not look to be baked into Fission's stock price.

RC: It was previously. Fission traded over $1 at one point in November, when Hathor was being acquired. It's the classic situation where investors buy on the potential and when it doesn't happen immediately, they give up and sell. It is further exacerbated by the fact that we have a negative market in general.

Even though you've seen Fission drift lower, the story hasn't fundamentally changed. If anything, it is closer to actually happening now than it was right after Rio Tinto bought Hathor. I haven't seen many scenarios where an acquiring company buys Company A and immediately turns around and buys Company B. They generally take some time in between to digest the acquisition or do more work. So, if anything, now would probably be a better time to buy Fission.

Another reason Fission has drifted down is that many expect Rio Tinto to acquire Denison first given that it's larger, and then turn its attention to Fission last, or after AREVA. So maybe it's more of a timing issue and people would get back into Fission when they see more activity in the basin and because they could see a bid for Denison.

TER: What are some other names you like?

RC: Uranerz Energy Corp. (URZ:TSX; URZ:NYSE.A) is a near-term producer. It is scheduled to produce by the end of this year, which would make it the next uranium producer in the world. It is located in the Powder River Basin in Wyoming. It has pretty high grades as far as in situ recovery (ISR) mining goes. It's an ISR miner, which means it uses injection wells and pumps the solution out of the ground. It is a low-cost operation similar to that of Uranium One Inc. (UUU:TSX) in Kazakhstan and some of the assets that Cameco has in the U.S. Uranerz is also run by one of the best management teams that I've come across in the uranium space. Given that it's a near-term producer, I am very positive on Uranerz for the same reason I feel that Energy Fuels is a bigger deal than what the market is giving it credit for.

Another name that I've very positive on is U3O8 Corp. (UWE:TSX.V). It is basically a South American consolidator of uranium assets, with assets in Colombia, Argentina and Guyana. I had the opportunity to visit all three. The flagship property is in Colombia, where it has decent grades. It looks like it there will be a suite of metals that the company can extract. In fact, it believes it can economically extract other metals such as molybdenum, vanadium, some rare earths and phosphate. Its asset in Guyana could be another Athabasca Basin.

TER: Many thanks to you, Rob.

RC: I've enjoyed it. Thank you for having me back.

Versant Partners Analyst Rob Chang has extensive financial markets experience dating back to 1995. He helped run a multistrategy hedge fund, worked in base metals research at BMO Capital Markets, managed resource funds at a boutique investment management firm and was a global mining equity analyst at an independent investment bank.

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DISCLOSURE:
1) George S. Mack of The Energy Report conducted this interview. He personally and/or his family own shares of the following companies mentioned in this interview: None.
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3) Rob Chang: I personally and/or my family own shares of the following companies mentioned in this interview: From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles on the site, may have a long or short position in securities mentioned and may make purchases and/or sales of those securities in the open market or otherwise.

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[Dick_Nixon]

PRESS RELEASE
April 16, 2012, 5:16 p.m. EDT
Energy Fuels Inc. and Denison Mines Corp. Announce Transaction to Create Leading U.S. Uranium Company

TORONTO, ONTARIO, Apr 16, 2012 (MARKETWIRE via COMTEX) -- Energy Fuels Inc. ("Energy Fuels" or "EFR") CA:EFR -7.27% and Denison Mines Corp. ("Denison" or "DML") CA:DML -3.91% DNN -2.25% today announced that they have entered into a Letter Agreement to complete a transaction (the "Transaction") whereby EFR will acquire all of Denison's mining assets and operations located in the United States (the "US Mining Division") from Denison in exchange for 425,441,494 common shares of EFR (the "EFR Share Consideration"). Immediately following the closing of the Transaction, Denison will complete a Plan of Arrangement (the "Denison Arrangement") whereby Denison will complete a reorganization of its capital and will distribute the EFR Share Consideration to DML shareholders on a pro rata basis as a return of capital in the course of that reorganization. Upon completion of the Denison Arrangement, Denison shareholders will receive approximately 1.106 common shares of EFR for each common share of DML owned and will in aggregate own approximately 66.5% of the issued and outstanding common shares of EFR.

Energy Fuels and Denison believe that the Transaction and the Denison Arrangement will provide a number of substantial benefits for shareholders of both companies, including the following:




-- Creation of the largest 100% U.S. pure-play uranium producer and one of
the largest holders of National Instrument 43-101("NI 43-101") compliant
U.S. based uranium resources.
-- 2012 production forecasts totaling greater than 25% of total U.S.
estimated production.
-- Measured and Indicated Resources of 49.8 million lbs of U3O8, plus
Inferred Resources of 17.9 million lbs of U3O8.
-- U.S. focus provides compelling fundamentals: domestic consumption of 55
million lbs of U3O8 per year vs. domestic production of only 4 million
lbs of U3O8 per year.
-- Clear operational synergies and capital efficiencies to increase
production.
-- Combination of mining and development assets which will accelerate the
rate of development of EFR mines, provide higher throughput of mill
feed, and extend the number of years of production at the White Mesa
Mill.
-- EFR's Sheep Mountain Project is an advanced-stage development asset
which provides flexibility to bring an additional 1.5 million lbs per
year of U.S.-produced U3O8 on-line.
-- Creation of a strategic platform for continued uranium consolidation
within the U.S.
-- Substantial vanadium by-product from the White Mesa Mill and Colorado
Plateau Properties, where historic uranium to vanadium ratios have
averaged approximately 5:1.
-- Combined management expertise, with decades of combined uranium mining
and processing experience.
-- DML shareholders to benefit from the division of two distinctly
different business profiles as well as exclusive management focus on
exploration and development, such as DML's high-profile Wheeler River
project in the Athabasca Basin region of northern Saskatchewan and its
Mutanga project in Zambia.




Steve Antony, President and CEO of Energy Fuels commented, "This transaction is transformational for Energy Fuels and reshapes the landscape of the uranium sector within the U.S. It combines the highly strategic asset of the only operating uranium mill in the U.S., White Mesa, with a significant resource base that substantially increases White Mesa's available feedstock. The result is an unmatched production growth profile and the opportunity for both Energy Fuels and Denison shareholders to benefit from the clear operational synergies that result from this transaction. I look forward to working with Denison's U.S. team to maximize the benefits of this important combination."

Ron Hochstein, President and CEO of Denison added, "This transaction is an important step forward for Denison. The Company has evolved on two parallel but different tracks, being both an exploration and development entity with a global footprint and an established producer in the United States. We are pleased to have the opportunity to combine our U.S. operations with such a complimentary set of assets and people. I'm excited about the opportunities that lie ahead for both Denison and Energy Fuels shareholders and believe that this transaction only serves to strengthen the operations of both companies."

Transaction Details

Pursuant to the Letter Agreement, the parties have agreed to enter into exclusive negotiations with a view to entering into a definitive agreement in respect of the Transaction (the "Arrangement Agreement"). The execution of the Arrangement Agreement is subject to the following conditions:




(a) Korea Electric Power Corporation ("KEPCO") shall have waived its right
of first opportunity provided for in the strategic relationship
agreement dated as of June 15, 2009 among Denison, KEPCO and a
subsidiary of KEPCO, or the 30-day period for exercising such right
shall have expired without KEPCO exercising right;
(b) the entering into of support agreements with all directors and
officers of Denison, who own shares of Denison, and Zebra Holdings and
Investments S.a.r.l. and Lorito Holdings S.a.r.l.;
(c) the entering into of support agreements with all directors and
officers of Energy Fuels, who own shares of Energy Fuels, and with the
three largest shareholders of Energy Fuels;
(d) the prior approval by the boards of directors of each of Denison and
Energy Fuels;
(e) there shall not have been any event or change that has had or would be
reasonably likely to have a material adverse effect on the business,
operations, results of operations, prospects, assets, liabilities or
financial condition of the U.S. Mining Division and of the Energy
Fuels group taken as a whole.




The three largest shareholders of Energy Fuels, Dundee Resources Ltd., Pinetree Capital Ltd. and Mega Uranium Ltd. who collectively own approximately 22.7% of Energy Fuels' outstanding common shares, have indicated their willingness to enter into support agreements in respect of the Transaction. Zebra Holdings and Investments S.a.r.l. and Lorito Holdings S.a.r.l., which combined are one of the largest shareholders of Denison, owning approximately 9.9% of Denison's outstanding commons shares, have also indicated their willingness to enter into support agreements in respect of the Transaction.

At its shareholder meeting to approve the Transaction, Energy Fuels also expects to seek shareholder approval to implement a 10-for-1 consolidation of its common shares.

Following execution of the Arrangement Agreement, it is anticipated that completion of the Transaction will be subject to the following additional conditions:




a) approval of the Denison Arrangement by Denison shareholders;
b) approval of the issuance of the EFR Share Consideration as part of the
Transaction by Energy Fuels shareholders;
c) court approval of the Denison Arrangement;
d) receipt of third party approvals and consents; and
e) receipt of all required regulatory approvals, including acceptance by
the Toronto Stock Exchange.




The Letter Agreement contains customary deal protection mechanisms, including a reciprocal break fee of Cdn$3.0 million payable in certain circumstances, non-solicitation provisions and a right to match any superior proposal.

Completion of the Transaction is subject to a number of conditions and contingencies, many of which are beyond the control of Denison and Energy Fuels. These conditions include the entering into of definitive agreements, receipt of third party and regulatory approvals, receipt of shareholder and court approval, and the absence of any material adverse changes. Although it is the intention of Denison and Energy Fuels to proceed as expeditiously as possible toward completion of the Transaction and the Denison Arrangement, there can be no guarantee that these transactions will be completed.

Advisors and Counsel

Dundee Securities Ltd. is acting as financial advisor to Energy Fuels and its board of directors, and has provided a verbal opinion to the effect that, as of the date hereof, the consideration offered to Denison by Energy Fuels is fair, from a financial point of view, to Energy Fuels. Dundee Securities Ltd. and Dundee Resources Ltd. are wholly-owned subsidiaries of Dundee Corporation. Borden, Ladner and Gervais LLP is acting as legal advisor to Energy Fuels.

Haywood Securities Inc. is acting as financial advisor to Denison and its board of directors, and has provided an opinion to the effect that, as of the date hereof and subject to the assumptions, limitations and qualifications set out therein, the consideration to be received by shareholders of Denison is fair, from a financial point of view, to shareholders of Denison. Blake, Cassels & Graydon LLP is acting as legal advisor to Denison.

Conference Call

Energy Fuels and Denison will be hosting a conference call on Tuesday, April 17, 2012 starting at 10:30 a.m. (Toronto time) to discuss the Transaction. The call will be available live through a webcast link on Energy Fuels website ( www.energyfuels.com ) and Denison's website ( www.denisonmines.com ), and by dialing 1-888-789-9572 (toll free) or 416-695-7806. A recorded version of the conference call will be available for playback approximately two hours following the conclusion of the call by dialing 905-694-9451 or 800-408-3053 (password:6637859). The presentation will also be available at www.energyfuels.com and www.denisonmines.com .

Overview of EFR and Denison's U.S. Mining Division

Energy Fuels Inc.

Energy Fuels Inc. is a uranium and vanadium mineral development company. The Company recently acquired Titan Uranium Inc., including the Sheep Mountain Project in the Crooks Gap District of Wyoming. The Company also received a Final Radioactive Materials License from the State of Colorado for the proposed Pinon Ridge Uranium and Vanadium Mill in March 2011. The mill will be the first uranium mill constructed in the United States in over 30 years.

With about 61,000 acres of highly prospective uranium and vanadium properties located in the states of Colorado, Utah, Arizona, Wyoming, and New Mexico, as well as exploration properties in Saskatchewan's Athabasca Basin totaling approximately 32,000 additional acres, the Company has a full pipeline of additional development prospects. Energy Fuels, through its wholly-owned subsidiaries, has assembled this property portfolio along with a first class management team, including highly skilled technical mining and milling professionals.

On March 1, 2012, Energy Fuels announced an updated Preliminary Feasibility Study for Sheep Mountain. The study contemplates the concurrent development of the underground and open pit deposits for a 15 year mine life. This option generates a pre-tax Internal Rate of Return (IRR) of 42% and a Net Present Value (NPV) of US$201 million, at a 7% discount rate and a $65/lb long term U3O8 price. This option has an expected initial CAPEX requirement of US$109 million and OPEX of US$32.31 per lb. recovered. The Sheep Mountain project is currently at an advanced stage of permitting. Production is expected to commence in 2015, with a peak production rate of 1.5 million lbs U3O8 per year.

The Sheep Mountain Project contains an Indicated Resource of 12,895,000 tons at an average grade of 0.12% eU3O8 (30,285,000 lbs eU3O8). This figure includes Probable Reserves of 7,453,000 tons at an average grade of 0.123% eU3O8 (18,365,000 lbs eU3O8). Energy Fuels' Colorado Plateau properties additionally contain Measured & Indicated Resources of 1,951,486 tons at an average grade of 0.24% eU3O8 and 0.89% V2O5 (9,371,821 lbs eU3O8 and 34,862,116 lbs V2O5).

The technical information in this news release regarding the Sheep Mountain Project was prepared in accordance with the Canadian regulatory requirements set out in NI 43-101 and is extracted from Preliminary Feasibility Study for Sheep Mountain dated April 13, 2012 which is filed on EFR's SEDAR profile and is available for viewing at www.sedar.com .

Stephen P. Antony, President and CEO of Energy Fuels, is Energy Fuels' Qualified Person (as defined by National Instrument 43-101) for uranium projects and is responsible for the technical information related to EFR's assets contained in this release.

Denison's U.S. Mining Division

All of Denison's U.S. assets are held directly or indirectly through its wholly-owned subsidiary Denison Mines Holdings Corp. ("DMH"). DMH holds its uranium mining and milling assets through subsidiaries, as follows:




-- the White Mesa Mill, a 2,000-ton per day uranium and vanadium processing
plant near Blanding, Utah through Denison White Mesa LLC;
-- the Colorado Plateau mines, straddling the Colorado and Utah border,
through Denison Colorado Plateau LLC;
-- the Daneros uranium mine in the White Canyon district of southeastern
Utah, and other exploration properties through Utah Energy Corporation;
-- the Arizona Strip properties through Denison Arizona Strip LLC;
-- the Henry Mountains uranium complex in southern Utah and other
exploration properties through Denison Henry Mountains LLC; and
-- miscellaneous properties through Denison Properties LLC.




All of the U.S. properties are operated by Denison Mines (USA) Corp., a wholly-owned subsidiary of DMH.

Denison's White Mesa Mill in Utah is the only conventional uranium mill currently operating in the U.S. It is fully licensed and permitted to process 2,000 tons per day, producing up to 8 million lbs of uranium per year. A vanadium co-product recovery circuit allows for the processing of vanadium ore within the Colorado Plateau mines and its central location allows for hauling of uranium ore from Arizona, Utah, Colorado, and New Mexico.

The Arizona Strip has higher grade production from breccia pipes. The Arizona 1 mine is currently producing with a track-record of resource replacement. A second mine (Pinenut) is expected to open in 2012. Shaft sinking is expected to begin at the Canyon mine in the fourth quarter 2012, pending regulatory approval, and the EZ1 & EZ2 properties are progressing through permitting.

The Henry Mountains Complex in Utah consists of the Bullfrog and Tony M deposits and represents Denison's largest resource in the U.S. (12.8 million lbs Indicated Resources, 8.1 million lbs Inferred Resources). Currently the complex is on care and maintenance. It was fully permitted in September 2007 and has excellent infrastructure, access, and is production ready. Haulage to the mill is along County and State highways.

The technical information in this news release regarding the Henry Mountains Complex was prepared in accordance with the Canadian regulatory requirements set out in NI 43-101 and is extracted from the technical reports prepared for DML titled "Technical Report on the Tony M-Southwest Deposit, Henry Mountains Complex, Utah, USA" dated March 19, 2009, and "Technical Report on the Henry Mountains Complex Uranium Project, Utah, U.S.A." dated October 17, 2006, which are filed on Denison's SEDAR profile and are available for viewing at www.sedar.com .

Ron Hochstein, President and CEO for Denison, is Denison's Qualified Person (as defined by National Instrument 43-101) for uranium projects and is responsible for the technical information related to Denison's U.S. Mining Division contained in this release.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain information contained in this news release, including any information relating to the proposed Transaction between Energy Fuels and Denison, the benefits and synergies of the Transaction, future opportunities for the combined company and any other statements regarding Energy Fuels' and Denison's future expectations, beliefs, goals or prospects constitute forward-looking information within the meaning of applicable securities legislation (collectively, "forward-looking statements"). All statements in this news release that are not statements of historical fact (including statements containing the words "expects", "does not expect", "plans", "anticipates", "does not anticipate", "believes", "intends", "estimates", "estimates", "projects", "potential", "scheduled", "forecast", "budget" and similar expressions) should be considered forward-looking statements. All such forward-looking statements are subject to important risk factors and uncertainties, many of which are beyond Energy Fuels' and Denison's ability to control or predict. A number of important factors could cause actual results or events to differ materially from those indicated or implied by such forward-looking statements, including without limitation: the parties' ability to consummate the Transaction; the conditions to the completion of the Transaction, including the receipt of shareholder approval, court approval or the regulatory approvals required for the Transaction may not be obtained on the terms expected or on the anticipated schedule; the ability of the parties to agree to terms on the definitive agreements relating to the Transaction; the parties' ability to meet expectations regarding the timing, completion and accounting and tax treatments of the Transaction; the volatility of the international marketplace; and other risk factors as described in Energy Fuels' and Denison's most recent annual information forms and annual and quarterly financial reports.

Energy Fuels and Denison assume no obligation to update the information in this communication, except as otherwise required by law. Additional information identifying risks and uncertainties is contained in Energy Fuels' and Denison's respective filings with the various provincial securities commissions which are available online at www.sedar.com . Forward-looking statements are provided for the purpose of providing information about the current expectations, beliefs and plans of the management of each of Energy Fuels and Denison relating to the future. Readers are cautioned that such statements may not be appropriate for other purposes. Readers are also cautioned not to place undue reliance on these forward-looking statements, that speak only as of the date hereof.

CAUTIONARY NOTE REGARDING TECHNICAL DISCLOSURE

This news release and the information contained herein does not constitute an offer of securities for sale in the United Sates and securities may not be offered or sold in the United States absent registration or exemption from registration. The terms "Inferred Resources", "Indicated Resources", "Measured Resources", "Mineral Resources" and "Probable Reserves" used in this news release are Canadian mining terms as defined in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM") Standards on Mineral Resources and Mineral Reserves (the "CIM Standards"). The CIM Standards differ significantly from standards in the United States. While the terms "Mineral Resources", Measured Resources", "Indicated Resources", "Inferred Resources" and "Probable Reserves" are recognized and required by Canadian regulations, they are not defined terms under standards in the United States. "Inferred Resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Resource will ever be upgraded to a higher category. Under Canadian securities laws, estimates of Inferred Resources may not form the basis of feasibility or other economic studies. Readers are cautioned not to assume that all or any part of Measured or Indicated Resources or Probable Reserves will ever be converted into reserves. Readers are also cautioned not to assume that all or any part of an Inferred Resource exists, or is economically or legally mineable. Accordingly, information regarding resources and reserves contained or referenced in this news release containing descriptions of our mineral deposits may not be comparable to similar information made public by United States companies.

This news release and the information contained herein does not constitute an offer of securities for sale in the United Sates. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.




Contacts:
Energy Fuels Inc.
Stephen P. Antony
President & CEO
[phone]
[e-mail]

www.energyfuels.com
Denison Mines Corp.
Ron Hochstein
President & CEO
[phone] x232
[e-mail]

www.denisonmines.com




SOURCE: Denison Mines Corp. and Energy Fuels Inc.



mailto:[e-mail]

http://www.energyfuels.com mailto:[e-mail]

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http://www.marketwatch.com/story/energy-fuels-inc-and-denison-mines-corp-announce-transaction-to-create-leading-us-uranium-company-2012-04-16

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Energy Fuels Reports on Sage Plain Project Exploration and Development Activities

TORONTO, ONTARIO--(Marketwire - Jan. 19, 2012) - Energy Fuels Inc. (TSX:EFR) ("Energy Fuels" or the "Company") today provided an update on recent drilling, technical reports, and development activities at the Company's new Sage Plain Project ("Project") located in San Juan County, Utah and San Miguel County, Colorado, about 20 miles northeast of Monticello, Utah. As has been previously reported in several press releases over the last year, Energy Fuels has been assembling a significant land package, largely contiguous, in the Project area. The Project will be the 3rd and 4th uranium and vanadium mines owned or controlled by Energy Fuels. The Project is being developed by Colorado Plateau Partners LLC ("CPP"), a 50:50 joint venture between subsidiaries of Energy Fuels and Aldershot Resources Ltd. of Vancouver, B.C.

The Sage Plain Project consists of 5,635 acres, including about 1,680 acres of fee land, 2,013 acres of Utah State School and Institutional Trust Lands, and 1,942 acres of unpatented mining claims on land managed by the U.S. Bureau of Land Management ("BLM"). This area is located in the southern extension of the Uravan Mineral Belt, which is characterized by vanadium-to-uranium ratios in excess of 6:1.

Most of the Project and all of surface disturbance will be located in Utah, with a small portion of the underground workings extending into Colorado. There are two historic uranium-vanadium mines within the project area, the Calliham Mine and the Sage Mine. These two historically productive mines have been idle for about 20 years. Both mines were operated by Atlas Minerals in the 1970's and 1980's. The Calliham Mine was acquired by Umetco Minerals, who operated the mine briefly in the early 1990's. Both mines ceased production due to depressed metal prices, not resource depletion.

Drilling:

In the Fall of 2011, CPP conducted two drilling programs in the Project area for the purpose of verifying historic drilling and map data. Seven holes were drilled on the Sage claims, and ten holes were drilled near the Calliham mine. This drilling successfully confirmed the accuracy of the historic data and increased the historic mineral resource totals. Previous drilling had been performed on the Calliham and Sage Mines by several operators, namely Hecla, Atlas Minerals, Pioneer, and Truchas. These companies drilled approximately 1,349 holes within the Project boundary.

Recent NI 43-101 Technical Report:

As a result of this drilling and additional data analysis, CPP filed a NI 43-101 technical report in December which supports the presence of 642,971 tons of Measured and Indicated Mineral Resource in the Project area with an in-place grade of 0.22% U3O8 and 1.39% V2O5 (2,833,795 lbs. U3O8 and 17,829,289 lbs. V2O5). Additionally, Inferred Mineral Resources are estimated at 49,136 tons with an in-place grade of 0.184% U3O8 and 1.89% V2O5 (181,275 lbs. U3O8 and 1,854,034 lbs. V2O5).

Energy Fuels' share of the combined Project Measured and Indicated Mineral Resources is 439,093 tons containing 1,975,704 lbs. U3O8 (0.225% U3O8) and 12,224,227 lbs. V2O5 (1.39% V2O5). Energy Fuels' portion of Inferred Mineral Resources is 24,568 tons containing 90,638 lbs. U3O8 (0.184% U3O8) and 927,017 lbs. V2O5 (1.89% V2O5).

Under the CPP joint venture agreement, Energy Fuels will be the operator of the Sage Plain Project. It is anticipated that the uranium and vanadium resource will be milled at Energy Fuels' proposed Piñon Ridge Mill, approximately 76 road miles away.

Current Development Status:

Currently, the Project is transitioning from exploration to development, and with that transition, Energy Fuels has assumed the Project operator role. CPP initiated permitting on both the Calliham and the Sage Mine in the Fall of 2011. The primary agency for the mine permits is the Utah Department of Oil Gas and Minerals ("DOGM"). Surface mapping has been completed, along with topsoil sampling and groundwater sampling. Consultants are being evaluated to support the permitting team.

The Energy Fuels team has enjoyed considerable recent permitting success with county, state and federal agencies for mines in Colorado and Utah. In addition, Energy Fuels has obtained major approvals for the proposed Piñon Ridge Uranium-Vanadium Mill in Montrose County, Colorado, including approval from the U.S. Environmental Protection Agency ("EPA") in October 2011.

The estimated timeline to complete permitting of the Calliham and Sage Mines is 16 to 20 months (about the 2nd Quarter 2013).

Steve Antony, Energy Fuels' President and CEO stated, "We believe there is excellent potential to expand upon this resource and our goal is to put these mines back into production. Once in production, the Sage and Calliham Mines along with our Energy Queen and Whirlwind mines will produce sufficient mill feed to meet 100% of the needs of our proposed 500 ton per day Piñon Ridge Mill. We are also working with local miners to develop ore purchase opportunities in the vicinity of the mill to supplement and extend our production."

Stephen P. Antony is a Qualified Person as defined by National Instrument 43-101 and has reviewed and approved the content of this press release.

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Colorado Court of Appeals Upholds Montrose County Special Use Permit for Energy Fuels’ Piñon Ridge Mill

Toronto, Ontario – December 8, 2011
Energy Fuels Inc. (TSX-EFR) (“Energy Fuels” or the “Company”) announced today that the Colorado Court of Appeals upheld the Montrose County Special Use Permit for the Piñon Ridge Uranium and Vanadium Mill. On March 3, 2011, the State of Colorado District Court in Montrose County denied a legal challenge by Sheep Mountain Alliance (“SMA”) seeking to overturn the Montrose County Board of County Commissioners’ decision to issue a Special Use Permit for the Piñon Ridge Mill. Today’s decision affirms the District Court’s decision to deny that legal challenge by SMA.
“Energy Fuels is extremely pleased with today’s decision. This is another major step forward for the Piñon Ridge Mill and Energy Fuels,” stated Stephen P. Antony, President and CEO of Energy Fuels. “The Appellate Court’s well-reasoned decision verifies the quality of our project and the thoroughness of the regulatory review process.”
SMA now has 45-days to request a rehearing on the case. SMA can also petition the Colorado Supreme Court to hear the case; however, the Colorado Supreme Court does not typically choose to hear cases on straightforward county land-use decisions. Energy Fuels believes that the narrow legal avenues still available to SMA have very little chance of success.
SMA has also challenged the Radioactive Materials License for the Piñon Ridge Mill issued by the Colorado Department of Public Health and Environment. That challenge is currently being heard by the State of Colorado District Court in Denver.
“Two State Courts have now upheld the Piñon Ridge Mill decision,” continued Mr. Antony. “We remain optimistic that the Colorado District Court in Denver will also uphold the Radioactive Materials License for the Piñon Ridge Mill which will allow Energy Fuels to move forward toward construction of this important project.”

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Energy Fuels Inc. and Titan Uranium Inc. Sign Letter of Intent to Merge

TORONTO, ONTARIO and VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 25, 2011) -

NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Energy Fuels Inc. ("Energy Fuels" or "EFR") (TSX:EFR) and Titan Uranium Inc. ("Titan") (TSX VENTURE:TUE) today announced they have entered into a Letter of Intent (the "LOI") to pursue a transaction whereby EFR will acquire by way of a plan of arrangement all of the outstanding common shares of Titan (the "Transaction"). Upon completion of the Transaction, existing Titan shareholders will own approximately 42% of the issued and outstanding common shares of EFR, which will then own 100% of Titan.

Energy Fuels and Titan believe that the Transaction will provide a number of significant benefits to the shareholders of both companies, including the following:

Increased scale and market presence in the uranium sector
Substantial NI 43-101 compliant resource (37 million pounds U3O8 Measured + Indicated, 4.3 million pounds U3O8 Inferred – see details below)
Enhanced near-term production profile
Focus on US production with low political risk
Creation of a strong platform for continued uranium consolidation within the US
Greater financial strength
Combined management experience and expertise
On completion of the Transaction, Titan shareholders will receive 0.68 common shares of EFR for each whole common share of Titan. Based on the 20 day volume weighted average prices and the closing prices of each company's common shares on the TSX and TSX-V, on October 24, 2011, this share exchange ratio represents a premium of 24.5% and 33.6%, respectively, to the Titan shareholders.

Steve Antony, President and CEO of Energy Fuels commented, "Energy Fuels is very pleased to be able to add Titan's very significant NI 43-101 mineral resource to our pool of assets, and to increase our presence in the conventional uranium mining space. Following the Transaction the combined company will have 37 million pounds of measured and indicated resources and 4.3 million pounds of inferred resources, placing the combined company among the largest holders of NI 43-101 compliant uranium resources in the US."

Chris Healey, President and CEO of Titan added, "We at Titan are excited at the potential to be part of a growing future producer, moving towards our stated goal of being part of a mid-tier uranium producer, with assets recoverable by conventional mining techniques and located in the US."

Overview of EFR and Titan and their Assets

Energy Fuels Resources

The Energy Fuels management team has extensive permitting and operating experience in conventional mining, and has concentrated on developing the first uranium mill to be licensed in the US in 30 years. Its Piñon Ridge uranium/vanadium mill, 12 miles west of Naturita in the Paradox Valley of western Colorado was granted its final radioactive materials license on March 7, 2011.

At the same time the Energy Fuels team has assembled uranium properties in western Colorado, eastern Utah, and northern Arizona. Energy Fuels has filed NI 43-101 Technical Reports documenting 1,309,000 tons of measured and indicated resource at a grade of 0.25% (6,538,000 lbs. contained U3O8) and 986,000 tons of inferred resource at a grade of 0.22% (4,346,000 lbs. contained U3O8). Significant historical production in this region came from several miners including Union Carbide, Atlas Minerals, and Pioneer-Uravan and major historic resources also remain in place to be developed.

Additionally, Energy Fuels has two fully permitted mines, the Whirlwind and Energy Queen Mines and has initiated permitting on two additional mines, the Calliham and the Sage, both in southeastern Utah.

Stephen P. Antony, President and CEO of Energy Fuels, is Energy Fuels' Qualified Person (as defined by National Instrument 43-101) for uranium projects and is responsible for the technical information related to EFR's assets contained in this release.

Titan Uranium Inc.

Titan has focused on exploring and developing uranium properties in the western USA. Its major asset is a 100% interest in the Sheep Mountain uranium mine in the Crooks Gap Mining District of Fremont County, Wyoming. The Sheep Mountain mine has an NI 43-101 compliant Indicated Resource of 13,841,000 tons at an average grade of 0.110% eU3O8, (30.4 million pounds contained U3O8). The technical report on the Sheep Mountain uranium project, dated January 20, 2011 was prepared for Titan by BRS Inc. Additional information including the estimation method and cut-off grade may be found in the report which has been filed on SEDAR.

The Sheep Mountain project is currently at an advanced stage of permitting. Production expected to commence in 2014, with a peak production rate of 1.5 million pounds U3O8 per year.

Titan also has significant interests in uranium exploration projects in Utah, Wyoming, Arizona and Saskatchewan.

The Titan management team brings extensive uranium exploration and production experience, including both conventional and in-situ recovery mining, to the company.

Chris M. Healey, PG (Wyoming), President and CEO for Titan, is Titan's Qualified Person (as defined by National Instrument 43-101) for uranium projects and is responsible for the technical information related to Titan's assets contained in this release.

Transaction Details

Pursuant to the LOI, the parties have agreed to enter into exclusive negotiations with a view to entering into a definitive agreement in respect of the Transaction (the "Merger Agreement"). The execution of the Merger Agreement is subject to the following conditions:

the entering into of support agreements with all directors and officers of Titan and with the two largest shareholders of Titan;
the entering into of support agreements with all directors and officers of Energy Fuels and with the two largest shareholders of Energy Fuels;
the prior approval by the boards of directors of each of Titan and Energy Fuels;
the satisfaction of each party with the results of its due diligence investigations of the other party.
The three largest shareholders of Titan, Pinetree Capital Ltd., Mega Uranium Ltd., together with their CEO Sheldon Inwentash, also the Chairman of the Board of Titan, who collectively own approximately 19% of Titan's outstanding common shares, and the two largest shareholders of Energy Fuels, Dundee Resources Limited and Pinetree Capital Ltd., who collectively own approximately 24% of Energy Fuels' outstanding common shares, have indicated their willingness to enter into support agreements in respect of the Transaction.

The LOI also provides that, upon signing of the Merger Agreement and satisfaction of certain conditions, EFR will lend Titan up to US$1,500,000 in the form of a secured bridge loan. The loan would be secured against Titan's Sheep Mountain project, bear interest a rate of 5% per annum payable at maturity and mature upon the earlier of (i) the closing of the Transaction and (ii) February 28, 2012. The LOI also permits Titan to obtain interim debt financing of up to US$1,000,000 prior to signing of the Merger Agreement.

Following execution of the Merger Agreement, it is anticipated that completion of the Transaction will be subject to the following additional conditions:

approval of the Transaction by Titan shareholders;
approval of the Transaction by Energy Fuels shareholders;
court approval of the plan of arrangement; and
receipt of all required regulatory approvals, including acceptance by the Toronto Stock Exchange and TSX Venture Exchange.
The Merger Agreement will contain customary deal protection mechanisms, including a break fee payable in certain events, non-solicitation provisions and a right to match any superior proposal.

Dundee Securities Ltd. is acting as financial advisor to Energy Fuels.

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Energy Fuels Announces Acquisition of Key Uranium and Vanadium Property in Utah’s Sage Plain District
Toronto, Ontario – October 17, 2011
Energy Fuels Inc. (TSX-EFR) (“Energy Fuels” or the “Company”) announced today that the Company purchased a 20-year mining lease (the “Skidmore Lease”) in southeast Utah’s Sage Plain District from privately held Nuclear Energy Corporation for US$1,500,702. With this acquisition, Energy Fuels has assembled sufficient contiguous historical resource acreage to begin permitting a uranium/vanadium mine in the Uravan Mineral Belt with Utah’s Department of Oil, Gas, and Minerals. This has the potential to be the third mine permitted to feed Energy Fuels’ proposed Piñon Ridge Uranium and Vanadium Mill near Naturita, Colorado, supplementing future production from the already permitted Whirlwind Mine near Gateway, Colorado, and the Energy Queen Mine near La Sal, Utah.
Consideration of US$500,000 is payable at closing with the balance due in equal interest- free installments over the next four years. The Skidmore Lease is located on approximately 709-acres in San Juan County, Utah, and includes large portions of the historic Calliham Mine. It is also adjacent to the Calliham Lease, the Crain Lease, the Sage Properties, and other mining claims already owned or controlled by Energy Fuels through Colorado Plateau Partners, LLC, (“CPP”), a 50/50 joint venture joint venture of Energy Fuels and Lynx-Royal JV, LLC (“Lynx-Royal”).
Energy Fuels intends to assign the Skidmore Lease to CPP, in exchange for Lynx-Royal paying US$250,000 to Energy Fuels, reducing Energy Fuels’ current net expenditure on the Skidmore property to US$250,000. In addition, the CPP joint venture will assume 100% of future monetary obligations for the purchase. As the contractual operator of any mines developed by CPP, Energy Fuels will receive all production from this property as feed for the Piñon Ridge Mill.
The Skidmore Lease currently contains 184,000 tons of historic uranium and vanadium resources at grades of 0.20% eU3O8 (729,000 lbs.) and 1.11% V2O5 (4,072,400 lbs.). These historic estimates are categorized as “mineable” in a 1994 report by Umetco Minerals Corporation (“Umetco”), successor to Union Carbide Corporation, prepared after the most recent mining occurred on the property. The report categorizes an additional 50,000 tons of uranium and vanadium resources on the Skidmore Lease as “potential” at grades of 0.18% eU3O8 (192,000 lbs.) and 1.26% V2O5 (1,266,000 lbs.).
This same 1994 Umetco report states that the Skidmore, Crain, Calliham, Sage, and other nearby properties, collectively referred to as the “Sage Plain Project Area” by Energy Fuels, which is all owned or controlled by the Company through CPP, contain 627,850 tons of historical “mineable” and “potential” uranium and vanadium resources at grades of 0.21% eU3O8 (2,636,620 lbs.) and 1.268% V2O5 (15,921,780 lbs.).
While deemed reliable by Energy Fuels’ geologists, the 1994 Umetco (Union Carbide) report is not in compliance with NI 43-101, and the historical resource estimates should not be relied upon. In the opinion of Energy Fuels’ geologists, Umetco’s “mineable” category generally corresponds to the “measured and indicated” classification under NI 43-101, and the “potential” category generally corresponds to the “inferred” classification under NI 43-101. Umetco’s resource estimate is not supported by current technical reports, and a qualified person has not done the work necessary to verify the estimates under NI 43-101. Energy Fuels intends to undertake the work necessary over the next 18 months to establish a current mineral resource report on the property in compliance with NI 43-101.
According to Stephen P. Antony, President and CEO of Energy Fuels, “The Ski