In a significant move aimed at bolstering America’s Rare Earth Elements (REE) supply chain and reducing dependence on China, Energy Fuels Inc, a mining development company, has announced a non-binding Memorandum of Understanding (MOU) with Australia-based Astron Corporation Limited. The collaborative effort is set to co-develop the Donald Rare Earth and Mineral Sands Project, situated in the Wimmera Region of Victoria.
The MOU, delineating indicative commercial conditions, has granted Energy Fuels an exclusive period lasting until March 1, 2024. Within this timeframe, the company will conduct due diligence, and both parties will engage in negotiations to formalize agreements. Astron, with over 35 years of expertise in mineral sand processing and downstream product development, brings valuable experience to the partnership.
Energy Fuels, with a primary focus on establishing a robust REE supply chain, is actively working towards securing long-term sources of REE concentrate. This strategy involves offtake agreements and direct ownership, including the 100% owned Bahia Project in Brazil. The joint venture with Astron aligns seamlessly with this strategic direction.
The Donald Project is poised to become a world-class critical mineral deposit, offering a near-term, low-cost, and large-scale source of monazite sand in a REE concentrate. The REE concentrate will be shipped to Energy Fuels’ White Mesa Mill in Utah for processing into REE oxides and advanced REE products, along with uranium recovery.
Projected to supply Energy Fuels with 7,000-14,000 metric tons of REE concentrate annually, including 4,000-8,200 tons of total REE oxides, the Donald Project is anticipated to commence commissioning and ramp-up in 2026. The investment required for the project stands at A$180 million (US$122 million), with the majority of Energy Fuels’ expected investment scheduled for 2025.
In the financial realm, Energy Fuels reported a notable performance in the third quarter of 2023. The company posted an adjusted loss of 2 cents per share, a substantial improvement compared to the adjusted loss of 6 cents per share in the corresponding quarter of the previous year. Net sales also saw a remarkable increase, reaching $11 million, a significant jump from the $3 million reported in the third quarter of 2022.
However, as markets opened after the new year holiday, Energy Fuels’ stock, which closed the previous trading session at $7.19, experienced a slight uptick to $7.22 but has since witnessed a decline. Market analysts are closely monitoring the situation, and factors influencing the stock’s performance include broader market trends, geopolitical events, and developments in the rare earth industry.
The collaboration with Astron represents a crucial step for Energy Fuels in its mission to establish a reliable and sustainable REE supply chain. As countries globally seek to diversify their critical mineral sources, partnerships like these play a pivotal role in reshaping the dynamics of the rare earth market. Investors and industry observers are keenly watching as Energy Fuels continues to navigate the evolving landscape of rare earth elements.
