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.

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…

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.