Exhibit 99.76
ENERGY FUELS INC. |
Management’s Discussion and Analysis |
Quarter Ended December 31, 2012 |
(Expressed in U.S. Dollars, Unless Otherwise Noted) |
INTRODUCTION
This Management’s Discussion and Analysis (“MD&A”) of Energy Fuels Inc. and its subsidiary companies (collectively, “Energy Fuels” or the “Company”) provides a detailed analysis of the Company’s business and compares its financial results with those of the previous year. This MD&A is dated as of February 12, 2013 and should be read in conjunction with the Company’s unaudited condensed consolidated financial statements and related notes for the quarter ended December 31, 2012, and the annual audited financial statements for the year-ended September 30, 2012. All financial information in this discussion and analysis is presented in United States dollars, unless otherwise stated.
Other continuous disclosure documents, including the Company’s press releases, quarterly and annual reports, technical reports, and Annual Information Form are available through its filings with the securities regulatory authorities in Canada at www.sedar.com and on the Company’s website at www.energyfuels.com.
In this discussion, the terms “Company”, “we”, “us”, and “our” refer to Energy Fuels and, as applicable, the Company’s wholly-owned subsidiaries: Energy Fuels Holdings Corp. (“EFHC””), White Canyon Uranium Limited (“White Canyon”), Magnum Uranium Corp. (“Magnum”), Titan Uranium Inc. (“Titan”) and their respective subsidiaries.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain information contained in this MD&A constitutes “forward-looking information", under applicable securities laws concerning the business, operations, financial performance and condition of Energy Fuels.
Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects", "does not expect", "is expected", “is likely”, "budget", "scheduled", "estimates", “forecasts", "intends", "anticipates", "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur", "be achieved" or “have the potential to”.
Forward looking statements are based on the opinions and estimates of management as of the date such statements are made, and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Energy Fuels to be materially different from those expressed or implied by such forward-looking statements. Energy Fuels believes that the expectations reflected in this forward-looking information are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking information included in this MD&A should not be unduly relied upon. This information speaks only as of the date of this MD&A. In particular, this MD&A may contain forward-looking information pertaining to the following: the estimates of Energy Fuels’ mineral reserves and mineral resources; estimates regarding Energy Fuels’ uranium and vanadium production levels and sales volumes; capital expenditure programs, estimated production costs, exploration and development expenditures and reclamation costs; expectations of market prices and costs; supply and demand for uranium and vanadium; possible impacts of litigation and regulatory actions on Energy Fuels; exploration, development and expansion plans and objectives; Energy Fuels’ expectations regarding raising capital and adding to its mineral reserves and resources through acquisitions and development; and receipt of regulatory approvals, permits and licenses and treatment under governmental regulatory regimes.
There can be no assurance that such statements will prove to be accurate, as Energy Fuels’ actual results and future events could differ materially from those anticipated in this forward-looking information as a result of those factors discussed in or referred to under the heading "Risk Factors" in Energy Fuels’ MD&A for the year ended September 30, 2012, dated December 20, 2012, and in Energy Fuels’ Annual Information Form dated December 20, 2012 available at www.sedar.com, as well as the following: global financial conditions, the market price of Energy Fuels’ securities, volatility in market prices for uranium and vanadium; ability to access capital, changes in foreign currency exchange rates and interest rates; liabilities inherent in mining operations; uncertainties associated with estimating mineral reserves and resources and production; uncertainty as to reclamation and decommissioning liabilities; failure to obtain industry partner and other third party consents and approvals, when required; delays in obtaining permits and licenses for development properties; competition for, among other things, capital, acquisitions of mineral reserves, undeveloped lands and skilled personnel; public resistance to the expansion of nuclear energy and uranium mining; uranium industry competition and international trade restrictions; incorrect assessments of the value of acquisitions; geological, technical and processing problems; the ability of Energy Fuels to meet its obligations to its creditors; actions taken by regulatory authorities with respect to mining activities; the potential influence of or reliance upon its business partners, and the adequacy of insurance coverage.
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ENERGY FUELS INC. |
Management’s Discussion and Analysis |
Quarter Ended December 31, 2012 |
(Expressed in U.S. Dollars, Unless Otherwise Noted) |
Accordingly, readers should not place undue reliance on forward-looking statements. These factors are not, and should not be construed as being, exhaustive. Statements relating to "mineral reserves" or "mineral resources" are deemed to be forward-looking information, as they involve the implied assessment, based on certain estimates and assumptions that the mineral reserves and mineral resources described can be profitably produced in the future. The forward-looking information contained in this MD&A is expressly qualified by this cautionary statement. Energy Fuels does not undertake any obligation to publicly update or revise any forward-looking information after the date of this MD&A to conform such information to actual results or to changes in Energy Fuels’ expectations except as otherwise required by applicable legislation.
Cautionary Note to United States Investors Concerning Estimates of Measured, Indicated and Inferred Resources: “This MD&A” may use the terms “Measured”, “Indicated” and “Inferred” Resources. United States investors are advised that, while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize them. “Inferred Mineral Resources” have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of Measured or Indicated Mineral Resources will ever be converted into Mineral Reserves. United States investors are also cautioned not to assume that all or any part of an Inferred Mineral Resource exists, or is economically or legally mineable.
SUMMARY OF QUARTERLY RESULTS
Results for the eight most recent quarters ending with quarter ended December 31, 2012 are:
Dec 31 | Sept 30 | June 30 | Mar 31 | |||||||||
2012 | 2012 | 2012 | 2012 | |||||||||
$000, except per share data | $ | $ | $ | $ | ||||||||
Total revenues | 8,927 | 25,028 | - | - | ||||||||
Net Income (loss) | (2,256 | ) | (15,905 | ) | 35,882 | (2,414 | ) | |||||
Basic & diluted net income (loss) per share | (0.00 | ) | (0.08 | ) | 0.16 | (0.02 | ) |
Dec 31 | Sept 30 | June 30 | Mar 31 | |||||||||
2011 | 2011 | 2011 | 2011 | |||||||||
$000, except per share data | $ | $ | $ | $ | ||||||||
Total revenues | - | - | - | - | ||||||||
Net Income (loss) | (590 | ) | (223 | ) | (2,338 | ) | (301 | ) | ||||
Basic & diluted net income (loss) per share | (0.00 | ) | (0.01 | ) | (0.02 | ) | (0.00 | ) |
RESULTS OF QUARTERLY OPERATIONS
General
The Company recorded a net loss of $2.26 million for the quarter ended December 31, 2012 (the “Current Quarter”) compared with a net loss of $0.59 million for the quarter ended December 31, 2011 (the “Prior Quarter”), which represents a comparative increase in loss of $1.67 million. This increase is primarily due to the acquisition of all of Denison Mines Corp.’s mining assets and operations located in the United States (the “US Mining Division”) in June 2012 and the associated increases in payroll, administrative, carrying, and operating costs.
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ENERGY FUELS INC. |
Management’s Discussion and Analysis |
Quarter Ended December 31, 2012 |
(Expressed in U.S. Dollars, Unless Otherwise Noted) |
Revenues
Revenues for the Current Quarter totaled $8.93 million, which included the sale of 117,000 pounds of U3O8 pursuant to term contracts at a price of $58.00 per pound, the sale of 40,000 pounds of U3O8 in the spot market at a price of $41.50, the sale of 78,000 pounds of V2O5 at an average price of $5.30 per pound, and $84,000 from processing alternate feed materials.
Operating Expenses
Milling and Mining Expenses
During the Current Quarter, the Company processed conventional uranium and vanadium ores from the Company’s mines on the Colorado Plateau as well as alternate feed material. Uranium and vanadium production for the Current Quarter was 228,400 pounds of U3O8 and 234,600 pounds of V2O5.
Cost of goods sold for the Current Quarter totaled $8.64 million which consists of $8.02 million of mining and milling production costs and $0.62 million of depreciation and amortization.
Production costs1 at the White Mesa Mill for the Current Quarter were $46.64 per pound U3O8. As previously reported by Denison Mines Corp., production costs1 were $50.93 per pound U3O8 for the quarter ended December 31, 2011.
Mineral Property Exploration, Evaluation and Development
Energy Fuels is also engaged in uranium exploration and development on its properties in the U.S. For the Current Quarter, exploration, evaluation and development expenditures totaled $3.18 million as compared to $0.68 million for the Prior Quarter. The majority of the development expenditures in the Current quarter were for development activities at the Canyon and Pinenut mines in Arizona and the evaluation expenditures were for the Sheep Mountain project in Wyoming, while the exploration and development expenditures in the Prior Quarter were primarily related to the acquisition of the Skidmore lease in the Sage Plain project area.
During the Current Quarter, Energy Fuels completed drilling on ten holes totaling 5,900 feet. These holes were drilled on the Whirlwind property for the purpose of expanding the known resource base.
General and Administrative
Selling, general and administrative expenses totaled $3.89 million for the Current Quarter compared to $0.90 million for the Prior Quarter. General and administrative expenses consist primarily of payroll and related expenses for personnel, contract and professional services, stock option expense and other overhead expenditures. Included in selling expenses for the Current Quarter was $0.80 million, resulting from amortization of the intangible asset recorded for the U3O8 sales contract values in excess of spot price at the June 29, 2012 acquisition date of the US Mining Division. The Company also recorded $0.65 million in general and administrative expense for costs incurred on previously impaired mineral properties. General and administrative expenses for the Current Quarter increased as compared to the Prior Quarter due to the acquisition of the US Mining Division in June 2012, and the additional costs related to the contract amortization expense and costs for impaired properties.
______________________________
1 Production costs per pound include the costs of mining the ore fed to the mill in the period, which include fair value adjustments to beginning stockpile inventories, plus the costs of milling less a credit for vanadium produced in the period and excluding depreciation and amortization, divided by pounds produced, which is a non-GAAP measure.
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ENERGY FUELS INC. |
Management’s Discussion and Analysis |
Quarter Ended December 31, 2012 |
(Expressed in U.S. Dollars, Unless Otherwise Noted) |
Other Income and Expenses
Finance income totaled $2.44 million for the Current Quarter compared to $4,000 for the Prior Quarter. The increase is primarily the result of a mark-to-market adjustment for the convertible debentures of $2.05 million as well as earnings from investments in the surety bond collateral account.
Finance expenses totaled $0.96 million for the Current Quarter compared to $16,000 for the Prior Quarter. The increase was primarily the result of interest expense in the amount of $0.50 million related to interest expense on the convertible debentures and expense of $0.38 million recorded for the mark-to-market adjustment on the Mega Uranium Ltd. common shares held by the Company.
Acquisition of Joint Venture Interests of Aldershot Resources Ltd.
On October 1, 2012, the Company acquired the interests of Aldershot Resources Ltd. (“Aldershot”) in the Sage Plain Project for $0.75 million in cash, the cancellation of debt owed by Aldershot to Energy Fuels, and the issuance of 3,527,570 common shares in the capital of the Company. In the transaction, Energy Fuels acquired Aldershot’s membership interests in Colorado Plateau Partners LLC (“CPP”) and Arizona Strip Partners LLC (“ASP”), two 50/50 joint ventures between subsidiaries of Energy Fuels and Aldershot. CPP holds a majority of the properties in the Company’s Sage Plain Project area, including the Calliham lease, the Crain lease, four State of Utah School and Institutional Trust Lands Administration (“SITLA”) leases, and 94 unpatented mining claims on land managed by the U.S. Bureau of Land Management (“BLM”). As a result of the acquisition, Energy Fuels now owns 100% of the Sage Plain Project, which is located about 15-miles northeast of Monticello, Utah and about 54 road miles from Energy Fuels’ White Mesa Mill. In addition, Energy Fuels acquired Aldershot’s interest in ASP which holds several prospective exploration properties in northern Arizona.
Investment in Virginia Energy Resources Inc.
On December 28, 2012, the Company announced it had reached an agreement to acquire a 19.9% interest in Virginia Energy Resources Inc. (“Virginia Energy”) as part of a non-brokered private placement financing. The transaction was completed on January 25, 2013. However, as a result of Virginia Energy’s expansion of the original financing, Energy Fuels’ acquired interest amounted to 16.5% (rather than the previously announced 19.9%) . Energy Fuels acquired 9,439,857 common shares of Virginia Energy at a price of C$0.42 per share, for an aggregate subscription price of C$3.97 million ($3.94 million). The subscription was satisfied by a combination of C$0.25 million ($0.25 million) of cash and the issuance of 21,851,411 common shares in the capital of the Company. Pursuant to the subscription agreement, for so long as Energy Fuels owns at least 9.9% of the outstanding shares of Virginia Energy, the Company has the right to participate in equity financings by Virginia Energy in order to maintain its percentage ownership. In addition, the Company has the right to nominate one director for election or appointment to the Board of Directors of Virginia Energy as long as it holds at least 5% of the issued and outstanding common shares of Virginia Energy, increasing to 9.9% after two years. Graham Moylan, the Chief Financial Officer of Energy Fuels, will be appointed as a director of Virginia Energy. Cantor Fitzgerald Canada Corporation acted as the Company’s financial advisor in connection with the investment transaction. The Company will issue 270,270 common shares of the Company to Cantor Fitzgerald in partial satisfaction of the financial advisory fees.
OUTLOOK FOR FY-2013
Production
The Company’s uranium production is be expected to be approximately 1 million pounds U3O8 from conventional ore and alternate feed sources. Production from conventional ore is expected to include ore mined from the Company’s Beaver, Pandora, Daneros and Arizona 1 mines. Mining on the Arizona Strip is expected to continue during FY-2013 at the Company’s Arizona 1 and Pinenut mines. As a result of the conventional ore production from Beaver and Pandora ores, vanadium production is anticipated to be 1.7 to 1.8 million pounds V2O5 in FY-2013.
The Company expects to produce 250,000 to 300,000 pounds of U3O8 during the quarter ended March 31, 2013, sourced from alternate feed sources and conventional ore from the Beaver and Pandora mines.
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ENERGY FUELS INC. |
Management’s Discussion and Analysis |
Quarter Ended December 31, 2012 |
(Expressed in U.S. Dollars, Unless Otherwise Noted) |
Sales
FY-2013 Uranium sales are forecasted to be approximately 1.0 to 1.05 million pounds of U3O8 of which 957,000 pounds will be sold into long-term contracts and the remainder will be sold on the spot market. Vanadium sales are estimated to be between 1.7 and 1.8 million pounds V2O5 in FY-2013.
Pursuant to its long-term supply contracts, the Company expects to sell 533,334 pounds U3O8 during the quarter-ended March 31, 2013 and between January 1, 2013 and February 12, 2013, the Company delivered and received payment for 216,667 pounds U3O8.
Development Activities
During FY-2013 Energy Fuels plans to pursue the permitting of the Sheep Mountain Project in Wyoming. The total planned cost of the Sheep Mountain permitting program in FY-2013 is $1.10 million.
Development of the Canyon mine in Arizona is planned to continue in FY-2013, with the start of shaft sinking planned to begin during the first half of FY-2013. The estimated cost of development activities at Canyon is $3.90 to $4.40 million for FY-2013.
Permitting and exploration activities for other Energy Fuels’ mineral properties are estimated to be approximately $1.80 million during FY-2013.
USE OF PROCEEDS FROM CONVERTIBLE DEBENTURES FINANCING
The following table outlines the proposed use of funds for direct project categories (excluding general working capital) from the net proceeds received from the issuance of 22,000 convertible debentures (“Debentures”) on July 24, 2012 as compared to the actual expenses incurred to December 31, 2012.
Estimated | Actual Costs Incurred | |||||
Use of Financing Net Proceeds (000's) | Allocation of Net | to December 31, | ||||
(excluding General Working Capital) | Proceeds | 2012 | ||||
Sage Plain Project permitting and mine design (1) | $ | 5,065 | $ | 1,214 | ||
Sheep Mountain Project permitting, mine design and development | 4,300 | 525 | ||||
Sustaining capital for existing mines | 2,660 | 3,539 | ||||
Daneros Mine development, permitting and exploration (1) | 1,600 | 0 | ||||
Payment to Uranium One for Titan Uranium loan | 1,050 | 1,055 | ||||
Payment to Pinetree Capital for Titan Uranium loan | 1,030 | 1,039 | ||||
Canyon & Pinenut Mines permitting and site rehabilitation (1) | 825 | 2,513 | ||||
Energy Queen Mine permitting, site rehabilitation and exploration (1) | 550 | 0 | ||||
| $ | 17,080 | $ | 9,885 |
(1) Concurrent with the Company's decision to place its Colorado Plateau mines on standby in the Current Quarter due to lower uranium spot market prices, the permitting and development projects on the Colorado Plateau were scaled back and the Company allocated additional funding to the Arizona Strip development projects which are the Company’s higher grade development properties.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents were $3.61 million at December 31, 2012 compared with $13.66 million at September 30, 2012. The decrease of $10.05 million was due primarily to cash used in operations of $2.13 million, cash used in investing activities of $6.56 million and cash used in financing activities of $1.35 million.
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ENERGY FUELS INC. |
Management’s Discussion and Analysis |
Quarter Ended December 31, 2012 |
(Expressed in U.S. Dollars, Unless Otherwise Noted) |
The Company’s revenues can vary significantly on a quarterly basis as a result of the timing of deliveries pursuant to its uranium term supply contracts. During the Current Quarter the Company generated sales of 157,000 pounds U3O8, of which 116,667 pounds U3O8, was pursuant to term supply contracts. The Company expects to sell 533,000 pounds U3O8 pursuant to its long-term supply contracts during the quarter-ended March 31, 2013, and between January 1, 2013 and February 12, 2013, the Company has delivered and received payment for 216,667 pounds U3O8. In addition, the Company uses significantly more cash when the White Mesa Mill is processing conventional ore, and during the Current Quarter the Company produced 209,400 pounds U3O8 from conventional ore. The Company will primarily manage its liquidity by appropriately managing uranium concentrate inventories and conventional ore processing schedules in a manner such that firstly, it has access to sufficient uranium concentrates required for deliveries pursuant to its term supply contracts and secondly, it also generates sufficient cash from concentrate sales such that it has sufficient cash on-hand for the higher expenditures required when conventional ore is processed at the White Mesa Mill. The Company is also in the process of evaluating loan financing for accounts receivables and concentrate inventories to increase its operational flexibility.
Uranium concentrates and work-in-progress inventories were 358,000 pounds U3O8 at December 31, 2012. Based on spot market prices at December 31, 2012, this inventory has a value of $15.57 million. At December 31, 2012, a total of 115,000 tons of conventional ore was stockpiled at the mill containing approximately 528,000 pounds U3O8 and 1,600,000 pounds V2O5. The Company also had approximately 240,000 pounds U3O8 contained in alternate feed material stockpiled at the mill at December 31, 2012.
Net cash used in operating activities of $2.13 million during the quarter ended December 31, 2012 is comprised of the net loss for the period in the amount of $2.26 million, adjusted for non-cash items and for changes in working capital items. The cash net loss resulted primarily from funding of general & administrative costs of $1.70 million and $0.6 million of expenses related to the Piñon Ridge Mill license.
Net cash used in investing activities was $6.56 million which consisted of expenditures for property, plant and equipment of $2.69 million, exploration and evaluation activities of $3.18 million primarily on the Canyon, Pinenut and Sheep Mountain projects, and acquisition of joint venture interests of $0.76 million.
Net cash used in financing activities during the quarter was $1.35 million. This was comprised primarily of $0.82 million in interest paid to convertible debenture holders and $0.25 million paid on the Skidmore Mineral Lease note.
Contingencies
Legal matters
On November 16, 2009, as amended on February 1, 2010 and July 22, 2011, the Center for Biological Diversity, Grand Canyon Trust, Sierra Club, Kaibab Band of Paiute Indians and Havasupai Tribe (the “Plaintiffs”) filed a lawsuit in the U.S. District Court for the District of Arizona against the U.S. Secretary of the Interior and the U.S. Bureau of Land Management (“BLM”) (together, the “Defendants”) seeking an order declaring that the Defendants have violated environmental laws in relation to the Company’s Arizona 1 mine, by not requiring a new Plan of Operations in connection with the start of mining activities. The Plaintiffs also claimed that, if a new Plan of Operations is not required, the Defendants failed to conduct a review of potential environmental impacts from the mine since the existing Plan of Operations for the mine was approved by BLM in 1988. The Company’s subsidiary Energy Fuels Resources (USA) Inc. (“EFRI”) intervened in the case. The Plaintiffs sought an order declaring that the Defendants have violated these environmental laws in relation to the Arizona 1 mine, and an injunction directing operations to cease and stopping the Defendants from authorizing or allowing any further mining or exploration operations at the Arizona 1 mine until the Defendants comply with all applicable laws. On October 7, 2011, the District Court issued its final ruling in favor of the Defendants and EFRI and against the Plaintiffs on all counts. On November 28, 2011, the Plaintiffs appealed the District Court’s ruling to the Ninth Circuit Court of Appeals, and on February 4, 2013 the Court of Appeals issued its ruling in favor of the Defendants and EFRI, and against the Plaintiffs, on all counts. The Plaintiffs have until March 21, 2013 to file a petition for rehearing.
The Company’s subsidiary EFRI entered into a fixed price construction contract with KGL Associates, Inc. (“KGL”) in 2009 relating to the construction of tailings cell 4B at the Company’s White Mesa Mill. The performance by KGL of its obligations under this contract is under dispute in the Seventh District Court in San Juan County, Utah. In the litigation: (a) EFRI seeks approximately $3.25 million in damages from KGL, including indemnity and reimbursement from KGL for monies paid by EFRI to KGL subcontractors or suppliers unpaid when KGL abandoned the project; (b) KGL seeks payment of approximately $1.84 million for alleged project labor and/or equipment inefficiencies allegedly caused by EFRI and foregone profits; and (c) both parties seek pre-judgment interest, attorney fees and costs. The litigation was fully joined in February 2011. A case management order is in place and discovery has been completed. A trial is expected to occur in 2013. Under the Arrangement Agreement dated May 23, 2012 between the Company and Denison Mines Corp., which was entered into in connection with the acquisition by the Company of the US Mining Division in June 2012, Denison has agreed to fully indemnify the Company in connection with this litigation.
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ENERGY FUELS INC. |
Management’s Discussion and Analysis |
Quarter Ended December 31, 2012 |
(Expressed in U.S. Dollars, Unless Otherwise Noted) |
On June 13, 2012, Denver District Court Judge John N. McMullen ruled in favor of the Colorado Department of Public Health and Environment (“CDPHE”) and Energy Fuels on the ten substantive environmental, health and safety claims in the lawsuit challenging CDPHE’s issuance to Energy Fuels of a radioactive materials license (“License”) for the proposed Piñon Ridge Mill. The Judge ruled partially in favor of the Plaintiffs, Sheep Mountain Alliance and the Towns of Telluride and Ophir, Colorado, on one procedural claim, ordering an administrative hearing. The License has been set aside, pending the completion of the hearing. On October 11, 2012, the Company announced a settlement with the Town of Telluride and San Miguel County, Colorado (San Miguel County was granted party status in the administrative hearing). As a result of this settlement, these entities did not participate in the hearing. The Town of Ophir remains a party but is no longer represented by counsel. The administrative hearing was conducted on November 7, 2012 to November 13, 2012. On January 14, 2013, the hearing officer for the administrative hearing issued a positive decision for Energy Fuels, holding that the hearing satisfied the requirements of Colorado law and that the CDPHE must consider any new evidence presented. On January 30, 2013, the plaintiffs appealed the hearing officer’s decision to the Executive Director of CDPHE. CDPHE must issue a new License decision by April 2013.
On November 26, 2012, the Company was served with a Plaintiff’s Original Petition and Jury Demand claiming an unspecified amount of damages from the disease and injuries resulting from mesothelioma from exposure to asbestos, which the Plaintiff claims was contributed to by being exposed to asbestos products and dust from asbestos products while working at the White Mesa Mill. The Plaintiff has also named a number of manufacturers of asbestos and asbestos-related products in the law suit. The Company is currently evaluating this claim, but does not consider it to have any merit at this time. On January 28, 2013, the Company filed a Special Appearance to Challenge Personal Jurisdiction, Motion to Transfer Venue, Motion to Dismiss for Forum Non Conveniens and Original Answer Subject Thereto.
On January 11, 2013, the Ute Mountain Ute tribe filed a Petition to Intervene and Request for Agency Action challenging the Corrective Action Plan approved by the State of Utah Department of Environmental Quality (“UDEQ”) relating to nitrate contamination located in the shallow aquifer at the Company’s White Mesa Mill site. This challenge is currently being evaluated by UDEQ and the Company, and will involve the appointment by UDEQ of an Administrative Law Judge to hear this matter under Utah administrative procedures. The Administrative Law Judge will set a schedule for further proceedings which will involve a hearing to resolve the challenge. After the hearing, the judge will issue a recommended decision to the final agency decision maker, the Director of UDEQ. An appeal can be taken from the Director's decision to Utah's appellate courts.
OFF-BALANCE SHEET ARRANGEMENTS
The Company does not have any off-balance sheet arrangements.
TRANSACTIONS WITH RELATED PARTIES
The Company has not engaged in any transactions with related parties.
DIVIDENDS
The Company has not paid dividends in the past and it does not expect to pay dividends in the near future. If the Company generates earnings in the future, it expects that they will be retained to finance further growth. The directors of the Company will determine if and when dividends will be declared and paid in the future based on the Company’s financial position at the relevant time.
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ENERGY FUELS INC. |
Management’s Discussion and Analysis |
Quarter Ended December 31, 2012 |
(Expressed in U.S. Dollars, Unless Otherwise Noted) |
OUTSTANDING SHARE DATA
At February 12, 2013, there were 705,031,088 common shares issued and outstanding, of which 1,046,067 were acquired by the Company pursuant to the Titan Uranium Inc. acquisition and are treated as treasury stock. In addition, the Company has 29,930,250 warrants issued and outstanding to purchase a total of 29,930,250 common shares, and 29,831,000 stock options outstanding to purchase a total of 29,831,000 common shares for a total of 764,792,338 common shares on a fully-diluted basis. In addition, at February 12, 2012, there were 22,000 Debentures outstanding, convertible into a total of 73,333,333 common shares.
CONTROLS AND PROCEDURES
The Company’s Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer are responsible for establishing and maintaining the Company’s disclosure controls and procedures and internal control over financial reporting for the Company. They are assisted in this responsibility by the Company’s management team. The Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, after evaluating the effectiveness of the Company’s disclosure controls and procedures and the design of internal controls at December 31, 2012, have concluded that the Company’s disclosure controls and procedures are adequate and effective to ensure that material information relating to the Company and its subsidiaries would have been known to them.
During the Current Quarter, there were no changes in the Company’s internal control over financial reporting that materially affected, or are likely to materially affect, the Company’s internal control over financial reporting.
QUALIFIED PERSON
The disclosure of scientific and technical information regarding Energy Fuels’ properties in this MD&A was prepared under the supervision of Stephen P. Antony, P.E. President and Chief Executive Officer of Energy Fuels, who is a Qualified Person in accordance with the requirements of National Instrument 43-101.
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