Can Energy Fuels Deliver on Its Low-Cost Uranium Strategy?

Energy Fuels Inc. UUUU is positioning itself to become one of the lowest-cost uranium producers globally. The company plans to achieve this by beginning to process low-cost ores from its Pinyon Plain mine in the fourth quarter of 2025 through the first quarter of 2025. During this period, it expects to produce 1.1-1.4 million pounds of finished uranium. 

This is expected to deliver exceptional cost advantages. Average mining and transportation costs to the White Mesa Mill are estimated at $10-$14 per pound of recovered uranium and milling costs at $13-$16 per pound. This will take the total weighted average cost of goods sold between $23 and $30 per pound of uranium recovered, among the lowest in the world. 

Initially, the high-grade Pinyon Plain ores will be blended and processed with the lower-grade, higher-cost La Sal/Pandora ores through early 2026. After this, Energy Fuels will have the flexibility to process Pinyon Plain ores alone to maximize margins, or continue to blend with other sources. 

As of June 30, 2025, the company’s finished uranium inventories carried a weighted average cost of $53 per pound, reflecting historic production and purchases. With the integration of lower-cost Pinyon Plain output, the cost of goods sold for uranium sales is projected to fall to $50–$55 per pound through late 2025 and decline to $30–$40 per pound in early 2026. 

This steady reduction in costs, coupled with stable uranium pricing, is expected to significantly enhance Energy Fuels’ gross margins, reinforcing its competitive advantage in the North American market.

Energy Fuels’ gross margin was 3.3% in the second quarter, mainly weighed down by a 52% plunge in revenues on lower uranium sales, even though costs applicable to revenues were down 0.7%. 

UUUU’s gross margin was lower than the industry average of 35.76%.  Meanwhile, peer Centrus Energy LEU reported a gross margin of 36% in the second quarter. Cameco Corp.’s CCJ gross margin was 35.51% in the second quarter.

UUUU’s Price Performance, Valuation & Estimates

Energy Fuels shares have gained 101.6% so far this year compared with the industry’s 3.2% growth. During this time, the Basic Materials sector has risen 14.8%, while the S&P 500 has gained 9.6%. Cameco and Centrus Energy shares have gained 167% year to date.

UUUU is trading at a forward 12-month price/sales multiple of 24.93X, a significant premium to the industry’s 2.74X.  Cameco and Centrus Energy shares are trading at 13.17X and 6.68X, respectively. 

The Zacks Consensus Estimate for Energy Fuels’ 2025 loss is pegged at 33 cents per share. The bottom-line estimate for 2026 is pegged at earnings of one cent per share. Here is how the EPS estimates for 2025 and 2026 have been revised over the past 60 days.

The company currently carries a Zacks Rank #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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