UUUU (2020 - Q2)

Good morning. My name's Colin, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Energy Fuels Q2 2020 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Mr. Chalmers, you may begin your conference. Mark Cha

Thank you, Colin, and good morning, everyone, and welcome to our webcast. My name is Mark Chalmers, and I'm President and CEO of Energy Fuels. Joining me today will be Dave Frydenlund, our CFO and General Counsel; Matt Tarnowski, our Chief Accounting Officer; and Curtis Moore, VP of Marketing, Corporate Development. To start off, I just want to say Energy Fuels is continuing to make big things happen. We strengthened our balance sheet, we resumed uranium production, and we continued to build our industry leading uranium inventory position. One of the most exciting parts of this call is we are making phenomenal progress on rare earth elements. And I'll repeat that phenomenal progress. I look forward to providing you with this update. And as Colin said, we'll answer questions at the end of my presentation. Very quickly, just a reminder, everyone on this call that that is -- they're controlling their own slides. So, I'll do my best to tell you next slide so that you can make sure that you don't get ahead or behind. But you're actually in control, not me. I have quite a bit to get through. So let's get started. So my first next slide. I will be making a number of forward-looking statements today. Please review the disclaimers at the end of the presentation. Next slide. This slide describes our main investment themes, and many of you have seen it before. But I just want to reiterate we are, first and foremost, a uranium producing company. We have more assets that can produce quicker, faster than any of our peers. We're also a leading U.S. vanadium producer, and actually, we're the leading and only conventional vanadium producer. The rare earth potential that we're working on is developing very quickly, and I'm looking forward to giving you more during the presentation on the rare earth side. There is growing support, U.S. government support, for critical minerals as a whole, but particularly, on the uranium front for the U.S. uranium reserve. The Nuclear Fuel Working Group was a very, very strong policy document, and there is a lot happening on the Russian Suspension Agreement front. We also have significant financial strength, and we are retiring debt. We currently have in the order of $53 million of cash securities or concentrate inventory as of June 30. Next slide. I'll start out talking about uranium. As I said, we resumed uranium production at White Mesa in the second quarter. Our guidance is 125,000 pounds to 175,000 pounds of uranium production in 2020, I believe, and very comfortable with this guidance. I hope it's conservative. But that is what our current guidance is. Second quarter, we produced 83,000 pounds. Currently, at the end of June, we had 575,000 pounds of inventory. If you value that at current spot prices, it's nearly $20 million. We expect to have 640,000 pounds to 690,000 pounds of inventory at the end of 2020. And that is our guidance, but again, I believe it is conservative. Nichols Ranch ISR facility was placed on standby in first quarter of this year. But we continue to maintain Alta Mesa in our conventional mines on standby. And as I said, we can scale up uranium production quicker, faster than any other producer. Next slide. Q2 was a busy time for uranium markets, particularly with the significant production cuts due to COVID-19 pandemic. I'm sure all of you are aware that uranium prices rose about 30% in March and April, mainly due to the shutdowns in Kazakhstan, Canada, Namibia and elsewhere. TradeTech has announced that, thus far, there's been about 14 million pounds removed from the market. Cameco just recently announced the restart of Cigar Lake in early September, and Kazakhstan is extending with some of their shutdowns. Spot market has primarily been dominated by producers, mainly people like Cameco and even Kazatomprom. In intermediaries, the spot market has been fairly light, but we are seeing some utilities coming back in, looking for near-term and longer-term demand. The market is still assessing the effects of Cigar Lake restart, but also the likely extension of the Russian Suspension Agreement, which I'll talk about more later. Next slide. Now, I'd like to say something about vanadium. As I said, Energy Fuels was the largest primary producer of vanadium, actually in the United States, and was the largest producer in 2019. But we stopped in early 2020, due to weak market. We had produced about nearly two million pounds of vanadium in 2019. We currently hold nearly 1.7 million pounds of very high-purity inventory. At current prices, that's valued at nearly $9 million. The Vanadium Recovery Project was very successful for us. It was the first time we recovered the vanadium from our tailing solutions. We still have another 1.5 million pounds to three million pounds that can still be recovered from those sources, and we plan to produce and sell when market conditions warrant. Some of you may have heard that recently, there was a vanadium Section 232 initiated by AMG Vanadium and U.S. Vanadium. We were not directly involved with that. That could significantly benefit Energy Fuels because vanadium is a critical metal. The Department of Commerce initiated that in June, and the DOC, Department of Commerce, has until February 27 to issue a report with recommendations to the President. The President will then have 90 days after receipt to impose trade remedies, if any. But this is something that we submitted comments on. We're not directly involved, but we could certainly benefit if there's relief given in the vanadium area. Next slide. Now, again, as I said, we're very excited about the rare earth element sector. We've been talking about it for a few months. And what's amazing to me is we announced just four months ago that we are getting into the rare earth sector, and we have made great progress since then. We are becoming increasingly confident of the role that White Mesa can play in the revival of U.S. rare earth industry. And as we've said previously, one of the key elements in our proposition, our value proposition, is many of the rare earth ores contain uranium in it. That uranium must be recovered before that rare earth ore string can be further processed or separated, and that's where we fit in. Currently, China is the only country that is recovering the uranium from the rare earth monazite streams that we're looking at. And the White Mesa Mill, as we all know, is existing. It's constructed. It's paid for. And it can process rare earth ores and recover uranium under existing licenses or routine amendments. So that places us in a very unique position. Our ongoing test work is very positive. We've engaged a very significant team of experienced rare earth commercial, and technical experts, and that is growing. We are in active discussions with several entities with regard to supplying rare earth ores to the mill, and also to others with regard to selling concentrate produced by Energy Fuels. So, this is moving very quickly. And it is also an area that is also potential for significant government support, and very much received the support, bipartisan support, from the Democrats and Republicans, due to the critical nature of rare earths to the United States of America. Next slide. Advantages of the mill. Well, first of all, we're going to start small, but we believe we're in a unique place to cost effectively ramp up our production, as we've seen fit and as we grow, and we also look forward to separation in the future if we're successful. The White Mesa Mill is a very flexible facility. It can be reconfigured as required. I already mentioned it has the licenses, and this is something that others -- it's a very long lead time to have a facility that can deal with monazyte streams because of the lead time and the cost to develop such a facility. The rare earth ores present no additional health, safety, or environmental impacts. We have been treating uranium ores and alternate feed responsibly for over 40 years. So, we're very well equipped to handle this material. We also have the skillsets for many of the different process steps required for rare earth recovery, and we are working to generate -- and we're confident that we are working to generate positive cash flow from rare earths within 12 months. Now, we still have a number of steps to take there, but we are moving rapidly. Next slide, please. I also want to talk about our building relationships, particularly with new performance materials. Neo could potentially be a buyer of concentrates from Energy Fuels in the future. In our latest announcement with our financials, we announced that we had signed a letter of intent with Neo just a few days ago. Neo is one of the world's leading producers of advanced industrial materials, including earth-based engineering products in global markets. We will continue the relationship with Constantine Karayannopoulos and his team at Neo. Constantine, when he first became an advisor to Energy Fuels, was the Non-Executive Chair of Neo. He has now been appointed President and CEO of the company he founded in July of this year, and he is one of the most successful rare earth industry executives in the world. So, we'll continue working closely with Neo, developing technical and commercial aspects of the rare earth strategy. It's not an exclusive agreement, but it is a very strong agreement, and I am very excited at how we can work together to help solve the issues of rare earth processing, not in China or former Soviet Union. We continue to have a very strong working relationship with Brock O'Kelly as an advisor. And as I've said in the past, Brock worked for many decades at Mountain Pass, and is currently working at the Colorado School of Mines, focused on rare earth processing. We still have a longstanding relationship with ANSTO. And recently, we signed up Jack Lifton, who has decades of experience in rare earth industry, including advising governments and serving on several technical advisory boards. So, we are putting in place, I think, an extremely impressive group of individuals, who are helping us and have also decided to join us for the right reasons; people that have been doing this for decades and have done it successfully. So, again, I think that bodes well for how we move forward. Next slide. Okay. Now, I'm going to switch back to uranium, and I'd like to say a few words on the U.S. government front. A lot of this is not new news to you, but I think it's good to go through it again. The Nuclear Fuel Working Group issued their report in April, April 23. It was one of the strongest government commitments and documents issued for the domestic uranium industry in decades. It's a nonpartisan policy document, supports a variety of possible solutions for the industry. It provides strong justifications for congressional appropriations and executive actions, whether it be support of national security, clean energy, counter Russian influence, exporting of U.S. technology abroad, promoting global safety, non-proliferation, and creating American jobs. This report has given us substantial support in Washington, D.C. I also want to say that Energy Fuels has been the main company leading this charge on these initiatives. We have been the only U.S. company continuously in this fight from the beginning, and no other company can say this. We are, however, very appreciative of others because there have been others that have also provided substantial support, and we want to thank them for their contributions. Next slide. Again, many of you have seen this, but I thought it'd be helpful to go back through it. The main recommendations on the U.S. uranium reserve, which is $150 million per year over 10 years, that's ongoing. We're in an excellent position to capitalize on that if there is money appropriated. In addition to that, there is nearly 20 million pounds that could be added to that from the American Assured Fuel Supply. The Department of Energy is going to end the bartering program. The Russian Suspension Agreement negotiations are ongoing, and I'll talk about that more in a minute. The NRC has the ability to deny imports of fabricated fuel from Russia. Streamlining of reform and land access to uranium is ongoing, and this could be -- other subsequent support will be considered as deemed necessary across a 10-year period. Next slide. Okay. I'll drill down a little bit on the uranium reserve and the Russian Suspension Agreement. It has been put in Trump's 2021 budget. As I mentioned, there are several bills in the Senate and the House working through committee and appropriations. The U.S. Department of Energy is pushing aggressively for appropriations. The timing is still a bit unknown. Perhaps the most significant thing that is also going on at this time is the Russian Suspension Agreement, limiting imports of Russian uranium into the United States. And this is where the Nuclear Fuel Working Group report is very, very powerful. The current agreement expires at the end of this year, and there's currently negotiations going on to extend the agreement for 10 years to 20 years. For the first time in a long time, the U.S., we believe, is playing hardball with the Russians. The Nuclear Fuel Working Group report says that the suspension agreement should be extended and perhaps reduced. We think the government is focused in that regard. There has been a threat, through a preliminary administrative review, to cancel the agreement that was to be potentially cancelled on August 4. That has now been extended into mid-late September, maybe early October. If they did cancel it, it could impose tariffs on Russian imports, which could shake up the market substantially. So, kind of watch this space. The Department of Commerce also found that the ending of this agreement -- that there was price suppression by the Russians. And so, I think we're in the strongest position we have been in years on this front. So, this is -- as I said, keep an eye on it, and it could be something significant to the market in the coming weeks. Next slide. Now, I'd like to talk a bit about our financials. As I mentioned earlier, we had $53 million in cash and inventories at the end of June, including nearly 600,000 pounds of uranium and 1.7 million pounds of vanadium. Currently, we do not intend to sell inventory this year, unless we can capitalize higher prices, and hopefully, significantly higher. Just to put it into context, for every dollar increase in the price of uranium, our working capital increases by over a $0.5 million. For every dollar increase in the price of vanadium, our working capital increases by nearly $2 million. None of our peers have this kind of leverage to these commodities. We also paid off half our debt in July, July 14, so we're working away at our debt. By contrast, many of our peers are incurring more debt. On this front, I would like to talk a little bit about dilution that Energy Fuels has incurred. First, we are raising cash on our timing and our terms. I think many of you have seen other companies that have gotten overextended on debt, and it can be disastrous for shareholders. And also, instead of diluting, there are companies that are just adding onto their debt service to fund their operations, which eventually will have to be addressed. Well, we are addressing it now to address it on our terms, as I said, earlier. Much of this debt has been taken on in very tough terms, including very high interest rates. And servicing debt, as I said earlier, can be extremely destructive and burdensome for shareholders. We also have far more fully-permitted operational assets than any other company in the United States. It costs money to keep these properties in good standing. And there are other companies that have a project or two, at best if, they're lucky, but we're maintaining several of these projects. At the end of the day, if you're incurring losses, you're diluting. And every North American uranium company is diluting, except Cameco. We believe we're doing what is best to get this lowest cost of capital in the least disruptive way possible for our shareholders, and we will be debt free at the end of this year. So we are addressing the debt. It'll be gone, and we will not have to dilute to pay off debt, looking to the future, unless we have cash flow-related line of sight to cash flow for those purposes. Next slide. Now, this slide is a good slide for people to understand where Energy Fuels fits into the North American uranium space. It also shows how we should be differentiated from others. If you kind of look at us from a market cap perspective, we're kind of in the middle of the road. The next column over, the $45 million of cash working capital, that reflects after paying down the $8 million worth of debt. The next column over, the $8 million, that is our remaining debt that will be gone at the end of this year. We're not going to refinance that. We'll pay it off at the end of the year or sooner, as we elect. The next column over, 0.58, is our uranium inventory that is building, and again, a differentiator on the amount of inventory that we're holding. And then when you go across to all these little green little ticks, we had uranium production, ISR in conventional in 2009. The only other company that had that was Cameco. No one had vanadium production. And then you look at the alternate feeds, which traditionally has been a $5 million to $15 million a year recycling business force, and we still are advancing on a number of fronts on that area. And then lastly, no one has exposure to the rare earth element business. I can look at a number of companies in the rare earth element business that have market caps of $100 million up to one -- or potentially seem to have market caps up to $1.5 billion. And I can tell you, we are right in the game, and I do not believe we have really any significant recognition for the rare earth space in our stock or the value of our company. We will first and foremost be a uranium miner, but we have several positive possible cash flow generation opportunities, most of which we have capitalized on, either currently or in the past. So it is proven businesses that we have benefited from over years. Next slide. Now, again, I think many of you have heard me say this is one of my favorite slides because it shows the uranium production in the United States over the last 15 years. The gray is production from Cameco. The blue is production from Energy Fuels or our assets. The yellow line is the price of uranium, how it has declined basically since 2017. In addition, Ur-Energy is in green. Uranium One is sort of that pink or red. If you look at just Energy Fuels and Cameco, the two companies that produce 85% of the uranium produced over the last 15 years in the United States. If you include Ur-Energy and Uranium One, it's well over 95% just four companies. So I think this slide speaks volumes. We have been there, we have done it, and we'll do it again, with our production history, and with our significant project holding including three fully operable production centers. Next slide. Again, many of you have seen this slide before, but again, I think it's helpful to highlight how we have properties from Wyoming all the way down to South Texas. The three production centers are the stars in Wyoming, Nichols Ranch is on standby, Alta Mesa in Texas is on standby, and again, in such a recovery project; White Mesa Mill is that blue star in the Four Corners region, and a number of projects that surround White Mesa Mill, but we also have other projects surrounding Alta Mesa and Nichols Ranch. So we have a very extensive footprint in the proven production districts of the United States of America. Next slide. Now, this is something that is new, and it has just been availed on this call. We are evaluating the potential to divest some of our non-core assets. The reason we're planning to do this is we do not think we're getting value for these assets, and this is a way to cut costs, generate some cash, and unlock value. We haven't decided exactly which projects it is going to be, but it'll probably be two or three fully-permitted conventional mines, not our main mines, but our conventional mines that are fully permitted. And many of these projects, several these projects, have production histories greater than several existing uranium companies in the United States; greater production history and probably at lower cost structures. If we divest these mines, they will come potentially with a toll milling agreement. They will be the only projects outside of our projects that will have a toll milling agreement. We'll also consider providing permitting and compliance assistance, access to the databases, and again, the rationale is cut holding costs, cut compliance, retain -- and this is important, retain the milling and marketing rights. That ore still has to come to the mill, and will have the marketing rights and unlock value. We will probably consider, if people give us sufficient consideration and our reputable, cash share type transaction. We plan to have expressions of interest in August or September. And so again, this is something that no other company -- if you have one project or two projects, you're certainly not going to divest two or three. And again, we have such a large portfolio. We still have the mill. We can still mill this material. We still have the marketing rights. I think it is a no brainer, but it's also a substantial opportunity for somebody else. You will be the envy of the Western U.S. You'll have the only milling agreement, potentially, with White Mesa, no one else will. Next slide. And I'd just like to kind of go through what I've already talked about. Number one, unmatched ability to increase low-cost uranium production from proven assets with long histories of delivery, more production facilities, more capacity, more experience than any other company in the United States. The rare earth opportunity is moving quickly. We are building this for the future, and this is extremely exciting for us and anyone that is really interested in critical minerals. Energy Fuels is becoming a one-stop-shop for a lot of the critical minerals that the United States needs. We're well-positioned financially. We have a strong balance sheet. Our debt is being retired. We will be debt-free at the end of the year. We're evaluating this potential divestment opportunity, which again, I think can be material for the Company. And no one else has the vanadium, no one else has the alternate [ph] feed. The land cleanup is still a significant opportunity on its own, it's been kind of slowed down because of COVID on the Navajo Nation, but we are currently receiving material from a private group as we speak. It's sort of in the order of a couple hundred thousand dollars per month of revenue, which is small but material for us. And that is it for my presentation. I'd now like to open it up for questions. Thank you very much.

Thank you. [Operator Instructions] Your first question comes from Mark Reichman of Noble Capital Markets. Mark, please go ahead.

Good morning and thank you for taking my question. With respect to the rare earth strategy, would you elaborate on sources of ore for the mill and markets for the sale of the concentrates, including potential commitments with Neo performance to buy and sell the rare earth element concentrates produced at White Mesa?

Firstly, our main focus is on the United States, as far as feed sources. so our first port of call is looking at sources of monazyte in the United States. After we've kind of covered off on that, we'll branch out maybe to Canada or other sources. As I said, we're going to kind of do this starting small and kind of working our way up the chain. There are a number of sources of monazyte material from particularly these mineral sands operations that, in many cases, is very high grade in total rare earth concentrates, TREO. So we're going to try to build on that. We may become a miner in time, but not at this point in time. When it comes into what we do with the concentrate, once we've processed it, as I said, we're not exclusive with Neo, but we think that they're an excellent company. They also have the capability to take this thing further down the chain in non-Chinese and Russian countries. So there's nothing in place at this point in time, but that could change. As I said, we've got a very strong relationship with them, and we're looking at the possibility where we'd have full integration of running through the supply chain here through a company like Neo. But as I said, we want to maintain our ability to service the U.S. market. There are a few other players that we know are trying to build up their capabilities, so we want to make sure that we stay true to getting the United States independent of China as quickly as possible. But there are only so many potential buyers of concentrate, and one of them is China. So Neo fits this really nicely because of what they do. And there are some others that might. But it's a very healthy relationship with Neo, and I think we complement each other, and I look forward to a very long and strong relationship with Neo going forward.

As a follow-up, what additional steps would need to be taken to enable capability to refine, separate, and recover the elements versus just producing the concentrate?

Well, look, that's a work in progress. We don't see any reason why we can't go some of these extra steps of separation, looking towards magnet material. The monazytes have a very favorable distribution with some of the heavies in it. That's another reason why it's attractive to us, plus the fact that it has uranium that we can cover. We're going to keep it simple. We're going to take the step, and I'd say that four Cs -- the four Us is our trading symbol, but the four Cs are concentrate on a concentrate, concentrate on a concentrate. And once we've made that step successfully, and modestly, we will build from there, Mark, and then go looking at other steps and processes that are value ads.

Thank you, Mark. That's very helpful.

Your next question comes from Heiko Ihle of HC Wainwright. Heiko. Please go ahead.

Hey, thanks so much for taking my questions, and I apologize for the lousy connection here. I'm still in Europe.

That's okay, Heiko. Fire away.

Perfect. Hey, more of a comment than a question, but I mean, in regards to something you said earlier, %I agree with you that you don't get enough recognition for the vanadium rare earth capabilities that you have. And my gut feeling is that that's going to change over the next couple of quarters. So again, more of a question than a -- more of a statement than a question, but I just figure I'd point it out. Off to the questions, given the recent impact of COVID-19 and the border closures that it has led to -- and you sort of alluded to this in your presentation a little bit with nonpartisan support for uranium. Have you heard or seen any impact on the global uranium market, as countries, in general, seem to be a little bit more focused on themselves right now? I mean, clearly, you'd be a huge benefactor of more than one domestically sourced supply. Can you just provide a little bit of color, if you've seen anything, please?

You're kind of breaking up there a bit, Heiko. But you're saying color kind of on the impacts of COVID in various countries in terms of [indiscernible]. Is that correct?

Exactly. In regards to countries just focusing more on themselves, rather than one being one global marketplace.

Yes. Well, listen, I think that certainly, COVID's been a wake-up call for everyone, all countries, and how fragile all these industries can be, particularly in the cases with this pandemic. I think it has also highlighted this whole issue of critical minerals of all types and materials, not just minerals. So I think it's woke up a lot of people and woke up a lot of politicians, including, like you said, from a bipartisan perspective. And so, even though as I said, Heiko, we're first and foremost, a uranium focused company with more assets, and more history, and more cash, and a cleaner balance sheet than any of these other people. We think this critical minerals area hub, adding with the vanadium in rare earths, is really becoming a no-brainer. And I think it's going to be greater value placed on that in the future because COVID has helped us, but other situations as well, too. So it's all dynamic, but I think people are starting to get it, that you cannot be completely dependent on state-owned enterprises and going to the cheapest supplier of certain materials, whatever they are, in the world.

Yes. Fair enough. And then just a clarification, can you provide us with a little bit of breadth of what you think your balance sheet might be looking like by the end of the year? I mean, you mentioned earlier on the call and on Slide 17 of that presentation, that you plan to have the remaining $8 million debt retired by the end of the year. But just with and without divestitures, just walk us through scenarios that you see your balance sheet looking like, please. Thank you very much.

Yes. Well, look, I won't go into details, and I've got Dave Frydenlund on the call. We might have him jump in here. But yes, we plan to have that residual $8 million addressed, and we have the ability to pay that off in cash and shares. We may pay it off sooner. Just kind of as a company policy, we -- so we'll have no debt at the end of the year. We always try to keep ourselves in the order of around minimum, plus or minus, $40 million of cash or working capital to make sure that we have plenty of capacity to not get flagged with a going concern, Heiko. So, look at, we -- I've learned from being in this business for 40, 45 years, it's never sail too close to the wind, particularly with debt. So, Dave, do you want to chirp in here on your thoughts? Our CFO.

Yes. Thanks, Mark. I think I like what you say, that we strive to keep about at least $440 million [ph] in working capital at all times. And our plants right now have us paying off the debt by the end of the year and maintaining that level. I think that's about all we can say right now.

Very good. Thank you for taking my questions, and apologies for that lousy connection. I'm not sure what's going on with that. Thank you.

Your next question comes from Joseph Reagor of ROTH Capital Partners. Joseph, please go ahead.

Hey, guys. Thanks for taking the questions. A couple of things. I guess, firstly, a little bit more info on your guys' view on the Russian Suspension Agreement. What do you see is the most likely outcome? There hasn't been a lot of reporting on this, given other bigger issues in the world. And then second part, if it were to be canceled or not continued, do you think there'd be a carve-out for pre-existing contracts? I know a lot of the utilities have contracts with suppliers who use Russia as the basis of the low-grade uranium.

Yes. Look, I think -- and again, I don't -- we can't get into a lot of the details because a number of us are participating in this process. But I think, generally speaking, people are assuming that the agreement will be extended. The Nuclear Fuel Working Group said that the quantity should be reduced. I think they will be reduced over time. Some of this -- and this was brought out in this preliminary review, that there's been a number of groups that have over-contracted here. How to address that is part of the issues of how that gets addressed. There's still no guarantee the Russians will sign a new agreement. If it crashes and burns, I think you end up with this issue of tariffs potentially going back into place, which is not an outcome that we support or really want, but it certainly would turn the applecart upside down. All those things are the complexities that are being looked at and considered. So, I don't know, Curtis, do you have anything you'd like to say in that regard with RSA?

Thanks for turning it over to me. There are a whole lot of outcomes in this thing. There's been proposals going back and forth. Again, we can't talk about what was being discussed. I mean, the U.S. government is playing hardball with Russia right now. They basically said that if you don't come to the table and be reasonable, we're willing to -- as the U.S., is willing to just cancel this agreement all together and impose 115% tariffs. And Mark said that we don't support the tariffs. We only do that -- we don't really don't support it because it would be -- it'd be tough on U.S. utilities. But if Russia is not willing to be reasonable, yes, we support that. I mean, we need to make sure that we have a fair level playing field here. We don't know if Russia is going to sign kind of what's been put in front of them right now. They may do some brinksmanship and see -- roll the dice with the tariffs, see if the Department of Commerce does have the backbone to actually cancel the agreement. But yes, we do think that it's going to be extended, I think, at some level. And that should be positive for the U.S. uranium industry.

Okay, thanks for the additional color there, guys. Switching gears a bit. Looking at spot prices, they're in the [indiscernible] range, and have been for a while. Two questions on that. One, what are you guys seeing or hearing as far as long-term contract levels compared to spot? And then two, it seems, given that there was so much supply that went offline because of COVID and is still offline because of it, that the price maybe should have been higher right now. It kind of indicates or may indicate that the utilities have reduced spot market purchases in order to not cause a price spike. Is that anything you guys are seeing out there as well? Anything you can give me on those two items would be great.

Curtis, I'll let you continue on.

We definitely are seeing a little bit of additional interest from utilities in the term market. The COVID pandemic did quiet things down significantly on the buying side. I mean, there was also some refueling outages happening at some of the utilities that also -- they just had their [Technical Difficulty].

…for a lot of years, and I can't believe that we have this significant optionality. On all the fronts that we've discussed, I understand this it's a little bit complicated. If any of you have any other questions that you want to talk to me directly, feel free to call me or call Curtis. We're happy to talk to you. And all I can say is watch this space and stay safe. And we really want to see our shareholders do very well out of our company and how we're placing it for the future. So, thank you very much.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating. And ask that you please disconnect your lines.