Energy Fuels’ Rare Earth Expansion Plan Gains Investor Confidence

Energy Fuels CA2926717083

A newly published feasibility study from Energy Fuels has provided a compelling financial blueprint for its planned rare earth elements (REE) expansion, shifting market focus to the company's White Mesa Mill in Utah. The detailed capital expenditure and return metrics, which surpassed prior market concerns, are capturing investor attention. The central question for the market is no longer the project's viability, but whether the extended development timeline can sustain the stock's recent powerful rally.

The expansion initiative arrives as U.S. policy and industry increasingly prioritize domestic supply chains for critical minerals. Energy Fuels aims to build a production capacity that could potentially meet up to 45% of U.S. demand for certain rare earths by 2030. Market observers view this as a strategic move to navigate the complex landscape of supply security and geopolitical dependencies.

The project, termed the "Phase 2" expansion at White Mesa, targets the processing of rare earths. According to the Bankable Feasibility Study (BFS), the estimated capital expenditure (CAPEX) is $410 million. This figure, noted by the company and market commentators, comes in below previous expectations—a significant positive in a sector where project costs have been trending upward.

Compelling Economics and Production Scale

The study outlines robust economics for the standalone Phase 2 project:
* After-tax Net Present Value (NPV): $1.9 billion (using an 8% discount rate)
* Internal Rate of Return (IRR): 33%

When consolidated with the potential output from the "Vara Mada" Toliara project in Madagascar, the company's projected scale grows substantially. The combined entity shows a potential NPV of $3.7 billion and an average annual EBITDA of $765 million, reinforcing Energy Fuels' ambition to become a major supplier of strategic metals.

The production targets underscore the project's magnitude. At full capacity, the facility is designed to yield over 6,000 tonnes of neodymium-praseodymium (NdPr) oxide annually, supplemented by 66 tonnes of terbium and 240 tonnes of dysprosium. These are critical heavy rare earth elements essential for high-performance magnets used in electric vehicles, wind turbines, and other advanced technologies.

Stock Performance and Forward Timeline

The market's reaction to these prospects has been pronounced. Energy Fuels' share price currently stands at $20.92, reflecting a gain of more than 300% over the past twelve months. In the last 30 days alone, the stock has advanced over 80%, indicating that the BFS is acting as a primary catalyst. The heightened trading activity and intraday volatility noted in source materials highlight active reassessment by both institutional and retail investors.

Despite the strong financial metrics, the path to full production is a long-term endeavor. Energy Fuels is targeting the necessary permits for the Phase 2 expansion by mid-2027. Construction and commissioning would follow, with the expanded facility planned to be operational in the first quarter of 2029.

On the operational front, the cost position appears competitive. The study estimates an "all-in" production cost of $29.39 per kilogram for NdPr equivalent from the Vara Mada feedstock, a rate that supports the projected returns in the BFS. In the coming quarters, progress on permitting will be a key benchmark. Adherence to the projected timeline would substantiate the current NPV and IRR assumptions and likely continue to support the ongoing re-rating of the equity.