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Energy Fuels (NYSE: UUUU) - Grabbing A Tiger By The Tail. Uranium Market Goes Wild

|About: Energy Fuels Inc. (UUUU)
Summary

US President Donald Trump's reaction to the Section 232 petition and the expectation from the 90 Day Working Group.

Has Energy Fuels made any enemies along the way?

State versus Federal level subsidies.

M&A, cash position and possible regrets?

Mark Chalmers, CEO of Energy Fuels (NYSE: UUUU) tells us that the Section 232 Petition was an unwanted but necessary process and that the Presidential Memorandum has been received positively by the US Uranium Market. Speculation is abound as to what the The 90 day Working Group has been asked to do and what all the possible outcomes will be. Some say Section 232 is not dead for the US Uranium companies. Others say that this has led to a much bigger discussion for Nuclear Fuel Industry as a whole, which will further delay the decision making by US Utility companies. The Memorandum states that the committee is to focus on US Nuclear Fuel Production, although no-one is clear what the remit of this extends to. What is clear is that despite the continued uncertainty for fuel buyers and Uranium companies, all sides are claiming it as a win, albeit one which leaves sour taste in the mouth. Mark Chalmers has no regrets.

And what exactly will be decided in the 90 days? It took over 12 months to respond to the Section 232 petition. Will US Uranium production be used only for Department of Defence needs? And what does "domestic Uranium production concerns to be addressed" mean?

Just how annoyed are the utility companies with Energy Fuels and Ur-Energy Will they be punished? Plus just how many friends do Mark and Jeff have left in the Uranium community for submitting the Section 232 Petition and paralysing the contract buying market?Is Energy Fuels prepared? Does it have enough cash? And will it use the White Mesa Mill to bend others to its will? These are the answers that investors are looking for. We discuss them with Mark.

The good news is that the macro story is strong. And perhaps the outcome of Uranium Section 232 and the 90 Day Working Group do not even matter. Let's see what Mark Chalmers has to say.

Click here to watch the interview.

Matthew Gordon: Mark, we spoke back in April. It feels like a long time ago, and a lot of things have happened, including the Section 232 Petition. What’s your reaction to all of that?

Mark Chalmers: I think that firstly when we thought that there was going to be a decision on 12th July, we were expecting a positive decision for good reason, and we didn’t get that immediate relief that we had hoped for, but we’re very encouraged with the fact that two new companies in Colorado, Ur- Energy and Energy Fuels, filed a petition that now is going in to a new review which is looking at the entire nuclear fuel cycle in the United States at the highest levels of government. Probably the most extensive review done in three or four decades on the front to the back of the nuclear fuel cycle.

Matthew Gordon: We’re talking about the 90 day Working Group, which was announced in the Presidential Memorandum by Donald Trump. It wasn’t what you wanted, but are you seeing that as a positive?

Mark Chalmers: Two small companies couldn’t tackle the whole nuclear fuel cycle. It was too big for us, so we’ve focused mainly on the Uranium front end. We certainly did mention that other portions of the fuel cycle were challenged. There’s a number of positives here. We thought we had line of sight to relief little lead within 24, 48 hours for good reason.

Some of the positives is the Secretary of Commerce said it was a national security issue. The President agreed with that. A remedy was put forward. We don’t know exactly what that is, but the report from Commerce will be public in this new review group that’s getting started as we speak.

Matthew Gordon: Donald Trump did say in June 2017, he announced an initiative to revive the nuclear sector. And this memorandum does talk about nuclear fuel production rather than specifically Uranium. There’s a lot of moving parts here. It’s hard it’s deliberately hard for us to all interpret exactly what it means. I think the language is vague, but let’s try and see what you read into some of this.

I think everyone’s claiming a win here. Everyone’s opinion has changed over time. Lots of people are claiming wins here, but I want to understand what you think.

Mark Chalmers: I think that the Department of Defence requires US produced Uranium by treaty. I think that the memo itself indicates that the complete fuel cycle for defence and our power plants is challenged. It’s broken. We don’t have the ability to basically chase… We’ll deal with it in terms of a lot of infrastructure, but our ore infrastructure, but we do have ability to mine Uranium right now and run it on through conversion enrichment, and up into the more highly enriched products with our existing infrastructure.

Now with regard to the Department of Defence they have to purchase Uranium from the United States. The utilities do not currently have to produce the Uranium from the United States and that’s the differential between it. And as we know, 99% is being imported into the United States right now, but I think the key grabs from this review is, as we said, we started off with a focus on Uranium mining. It’s now a larger focus. The audience, the members of that Working Group are secretary level, Secretary of Defence, Secretary of Interiors, Secretary of Treasury State Department, NRC. These are all the top of the tree. It’s basically the President’s cabinets minus a few people like Homeland Security and Health and a few things like that.

So it’s floated to the top here. It wasn’t a no-no. It was “No, we need more time.” And I think that was a key element. They needed more time.

Matthew Gordon: There are a lot of big names involved – Secretary of everything important that’s involved with this and that, but they’re involved in a nuclear fuel production review. That’s the top line. I think we’d all agree that there needs to be a lot of discussion around the reactors and subsidies that reactors are receiving. Where does Uranium fit into that review? Is it a big piece of this? They talk about addressing concerns, they don’t talk about addressing US Uranium production in anything other than in relation to the Department of Defence supply. So what’s your expectation of what this 90 day review’s going to give you versus the rest of the world?

Mark Chalmers: I think that the memorandum and the flavour is that it’s got to be a holistic review. I think the other thing is that certainly we’re going to pull out where we can participate, is that again the United States consuming one third of the world’s Uranium products, at the front-end Uranium less than one per cent, but then we have conversion on standby. We have foreknown enrichment. We don’t have ability to go to these higher ends, but at the same time – and this is the important thing that needs to be drawn out. Russia, China are building up their capacity which is well in excess of their requirements. So here we are not being able to produce a per cent of our requirements, where our foes are going to be able to produce many times greater than they need, so that they can create a global business to take over the entire fuel cycle in the world, including the United States. This is where the national security issue is very significant. There is a huge focus by the United States government on critical minerals which Uranium is one, and okay as a company we also produce Vanadium – which is a critical mineral – and so this is right up the alley of that initiative.

So separate from the nuclear fuel cycle you have the critical minerals too. So look, there’s no certainty on the outcome but we’ve certainly elevated it to a level that it really needs to be at.

Matthew Gordon: But what do you want out of this review? Do you want certainty around your position? Do you want certainty for the market? Do you want to understand what it means for you financially? What are the specifics around, what do you want from these guys? They’ve had an initiative for the last two years, but I don’t know what they’ve been doing in the last tow years. What will they do in 90 days which they didn’t know before?

Mark Chalmers: We’re still looking for that 10, 12 million pounds, up to 10 or 12 million pounds of production under contracts. We’re not looking at Tirus. Maybe you don’t call them quotas. There’s other ways of doing that, but we want long term contracts.

Matthew Gordon: Who from?

Mark Chalmers: Still a good position to ask for long term contracts. We are not materially changing what we’re asking for in terms of the certainty and relief at the front end for the Uranium mining side of things.

Matthew Gordon: Who do you want these contracts from? Do you want them from the Department of Defence or the utilities being made to buy from you? What are you looking for?

Mark Chalmers: We want long term contracts from utilities, from he Department of Defence. The Section 232 was a trade initiative. It was focused on trade. Well now that we’re in this larger Working Group there are other potential fixes that aren’t trade related. It doesn’t mean that the trade issue’s got to go completely off the table, but it opens up the opportunities on where this could go and how it could potentially be funded looking forward.

So it’s still early days. You’re right, 90 days goes by very quickly. But we agree with the President’s decision. Yes, sir, it’s painful, the shares got hit like they did, and not just our shares but everybody in the United States, but we actually agree with the decision and we think the President made the right decision by opening it up to the entire fuel cycle.

Matthew Gordon: At what point did you recognise what could happen? You started a series of events. I said to you way back then, I thought it was a really bold, big move for two small companies in this space to go for. But at what point did you recognise that actually this may not go the way you wanted it? Was it literally the day the memorandum came out or did you know anything before then?

Mark Chalmers: I can’t say publicly but I had for good reason up until the last 24 to 48 hours that we had, very positive signals that we had a good chance of receiving relief of this material for us and the United States Uranium mining industry. And as said, we had nothing to confirm that. Actually we didn’t have anything positive to confirm it until that memorandum came out. There were rumours starting to fly. They were not consistent with what we believed and were we were at, but when the rumours started to fly and people were saying, “Oh, I confirm this or I confirm that,” we didn’t know. We did not know. One thing that we do know, and as I said, this got into the White House. I think that they basically run out of time when the topic of Uranium mining and the other parts of the fuel cycle started to convolute things in terms of really where they should be focused and what decisions they should make.

Matthew Gordon: So you made a statement to me the last time we spoke. You said you’re a winner and you’re going to make this thing work. I believe that you believe that and that’s great. But do you think winners do everything and anything it takes to win? And if you do, do you think the 232 is the right move for you then and do you still feel that now? To get caught up with the current Uranium market, watch our interview with Mike Alkin, uranium fund manager.

Mark Chalmers: If I had the opportunity to do it again, I would have done it again. I think that 232 was the right step. I think it’s right in line with… I said it many times that we will be aggressive but not reckless. I think that from my perspective and again for good reason we got this thing very, very close to going across the line on our petition. We’ve got the support of columners. We’ve got this national security determination. We knew it wasn’t going to be easy.

In hindsight it’s been more difficult than perhaps I had thought at the beginning of the process, but that’s life isn’t it?

Matthew Gordon: I think the uncertainty is still there, but we can come to that in a minute. Do you think you’ve made some enemies along the way? Your share price has been hit. Your US colleagues companies have been hit. Utilities weren’t for this move at all. Who’s out there that’s friendly and who’s talking to you?

Mark Chalmers: I don’t have people that I consider enemies. I think that the utilities, yeah, they didn’t agree with it. Everybody has to vote their pocket book, and that includes the utilities. I’d had a number of utilities tell me “Mark, t’s not personal. We understand why you did what you did.” And to this day, with all the number of shareholders I have talked to, yeah, sure, they saw the shares drop by 40% and so. 37% on the day. No, I’m not happy with that. No, they’re not happy with that, but I have not had an angry shareholder.

Now, after this video maybe somebody’s angry. They want to come talk to me, and I welcome them to call me. I welcome them to call me. I’m an approachable guy and I’m looking for big opportunities for our shareholders, not status quo.

Matthew Gordon: Do you think you’re going to be punished by utilities as a consequence of this? I know you just said, “Look, it’s not personal,” but will that be reflected in terms of their buying behaviour with contracts going forward?

Mark Chalmers: Absolutely not. There’s a lot of rumours and as I said, when you look at the other Uranium producers in the world, you look at Canada, if you look at Australia – if they had the opportunity to take in a Section 232 route, I will bet you they would have taken that route themselves if they had that opportunity.

Matthew Gordon: With regards to the narrative, I remember talking with you, I’ve talked to a lot of CEOs of other Uranium companies, talked to funds, talked to a couple of utilities – the narrative obviously knowing what we now know with regards to President Trump’s memorandum, the narrative’s changing. Everyone’s claiming a win. Everyone’s claiming that they called it right. Who do you think actually called it right in all this? I know you said it wasn’t the outcome that you wanted, but did you see anyone get this right?

Mark Chalmers: You’re right where a lot of people are saying, “Oh, it’s a win for me.” Everyone says it’s a win and here we are still waiting another 90 days. I think we’ve called it right because we brought to the attention of the government a fundamental flaw in our fuel cycle and in our national defence with the front end of the fuel cycle. So I think that in the absence of us filing our Section 232, where would be today with regard to the focus on the fuel cycle? I think we did what we needed to do. As I said, I don’t regret doing what we did and there still is uncertainty – and even on the day, I said on the day the rumours start flying, I kept saying to people around me, “This is not consistent with President Trump. It is not consistent for him to say, “”No, I’m not doing anything.” So when the memorandum came out, I couldn’t accept that what was in that memorandum was consistent with what I would expect from President Trump and his administration that they would need to look at this in a more detailed way.

Matthew Gordon: He didn’t say no. He didn’t say yes. He just bought some time. It’s part of a much bigger review. Do you think that review is going to finish in 90 days or probably a bit less than that now?

Mark Chalmers: You’re right, it’s a large review. All I can say is in the 232 process, they met all of their time constraints. They were on the day on just about everything that they did. Now this is a bigger group…

Matthew Gordon: With bigger collective problems, Mark. You’ve got the utilities with a multitude of different energy sources as well as nuclear. You’ve got the gas guys. You’ve got big lobbyists who have been fighting the good fight and they’ve got to appease all of those people. I guess there’s room for everyone. It’s a question of who gets what slice of the pie.

Mark Chalmers: I think we’ve got a tiger by the tail. There’s no question. But not all these things have to be solved in a day, and they can’t be solved in a day. I think that the key things that they need to look at is a phasing of things. You take further down in the enrichment cycle of the fuel chain. You’re not going to solve that in a week or month or six months, but we do have things like the conversion and the Uranium mining that can be solved quicker because a lot of the infrastructure… Well, the infrastructure, a lot of it is in place, a lot of the people are in place.

Matthew Gordon: Who’s problem is that? You’re saying they can look at that, but that’s the problem of the company, isn’t it? Why does the review become responsible for getting those companies up and running again? They can’t affect price other than give uncertainty to utility companies to be able to put some contracts in place. Is that the way it works?

Mark Chalmers: The one complication with the United States compared to Russia and China, is the US basically privatised the vast majority of the front end of the fuel cycle. There is no nuclear fuel cycle in the world that doesn’t have government support in virtually every step of that fuel cycle, and that goes with the Russians and that goes with the Chinese.

I think what we have found that privatising the front end of the fuel cycle doesn’t work. It’s that simple. So the government has the ability to facilitate in different ways if they think it is a priority of national significance. It is complicated, as I’ve said, because we’re now not just tied to the Section 232, there are other aspects of it.

If you look at it right now, many of the nuclear utilities have received and are receiving substantial support in the various states that they operate in, substantial support. We’re talking 100, 150, 200 million dollars per year for two or three reactors.

Matthew Gordon: That’s at a state level, not a federal level. Is that right?

Mark Chalmers: That’s the state level. Look, we’re not trying to unduly burden the fuel cycle with our costs, but I can tell you that when you look at what we asked for, what we’re asking for is very, very small in the scheme of the fuel cycle. We’re small businesses. It’s very small.

Matthew Gordon: What are you looking for?

Mark Chalmers: All of this is taken out of context on what the true costs are. Now the other thing that’s taken out of context with the true cost is what is the fair value of a pound of Uranium produced by westerners? It’s not the current $25 per pound of the spot price. That is a depressed what we call happier pound. So there’s a lot of ways the maths can be distorted here.

Matthew Gordon: What are you after? They can help you in different ways. What are those ways that you would like them to help you with? Is it around permitting and licensing or is it subsidies?

Mark Chalmers: The main thing we want is contracts. This is where we haven’t changed our position. We want contracts. We want to buy American. Certainly the Department of Defence has to buy US Uranium. We’ve got government reactors. There’re different ways that it can be incentivised.

In the case of our company, we’re unique. We have Vanadium. We also do recycling of low level products. We do one to three reactors a year recycling and we also have been pursing clean up of a nation.

Matthew Gordon: You’ve got a lot going on.

Mark Chalmers: USD$3.7 billion in trust.

Matthew Gordon: You’re at the front line. With regards to whether it be state or federal level, subsidies or a bifurcated market or permitting made easier, what precisely do you need? You’re a producer. You’ve got a lot of moving parts, a lot of assets. You’ve got explorers. They’re all going to need different things because they’re at different stages of evolution. You’re going to focus on your company. What is it that you want for you and what do you think explorers are going to need?

Mark Chalmers: There’s a difference. We have a lot of critical infrastructure that is constructed, that is manned, is operable.

Matthew Gordon: And it’s costing you money today, right?

Mark Chalmers: We need to get money into our coffers and that can happen in a variety of ways. As I said, I prefer long term contracts. It’s important to keep producing. Uranium is a very unique commodity, the technical skills required to find it, to develop it, to process it, are rare to find and if we don’t get supporters to preserve and continue at some level, we will lose those skills.

Now, just for an example, even with the Department of Defence when it comes to things like submarines, aircraft, they continue to build at a certain level just to maintain critical infrastructure and the skills that are necessary for that infrastructure to operate efficiently. Those are themes that could be followed.

And as I said, the one distortion that happens is people assume that Uranium is going to be available forever for $25 a pound and that’s not the case. Cameco will be gone and the Uranium production in Australia will largely be gone, perhaps with the exception of Olympic Dam. We need a higher price.

So you’ve got to kind of differentiate between the state-owned enterprises and the western production. Western production needs to be at $50 a pound or greater to continue.

Matthew Gordon: But that is determined by the market usually, right? Are you saying that the Government needs to step in and affect price or pay the differential between whatever spot is. I know you want a contract, but you want a contract at +$50. If the market isn’t at $50, how does the state or federal government help you?

Mark Chalmers: It’s probably a combination of things. It could be a combination of the Government, it could be a combination of the utilities wearing some of that load. They’re receiving subsidies as we speak. We’re not asking for something that others aren’t already receiving here. We know there’s a challenge, but you’ve got to get back to what I said before – we are the largest consumer in the world and we have zero capability right now. Is that where we want to be? Now some people will say “I’m fine with that” and I say, “No I’m not fine with it” and I think the average person in DC understands this.

Matthew Gordon: 24 of 60 operating nuclear reactors in the US will struggle to cover their operating costs this time next year. So they need help and they are getting help now, and you’re saying “I just want a piece of that”.

Mark Chalmers: Correct. I talked about these state-owned enterprises in Russia and China. If they didn’t have state support, would they be able to function from the beginning to the end of the fuel cycle and the answer is “no”.

Matthew Gordon: I just want to ask you about your views about Cameco’s conference call press release last week. What’s your read on what they had to say? It hasn’t really moved the market; it hasn’t done anything for equities or buying, so what’s your take on it?

Mark Chalmers: I think my take on Cameco is that they’re challenged right now too and losing, or getting a very small settlement on this lawsuit that they had, it hurt them big time. I think they’re just reiterating what I’m saying – that they need higher prices or they’re not going to restart.

What they’re not saying is if their contracts roll off they’re looking at serious outcomes with Sagar Lake. Sagar Lake has also got a finite life on it, so it doesn’t have 20 years of life.

Look, I think Cameco is a great company and I know the management of Cameco. I think they’re doing the right things and I respect them, and I always say that to anyone that asks me about the Uranium sector. I say “you’ve got to own some Cameco”. But, they’re also very challenged right now too, and I think that they recognise the importance of western world production. I think they kind of suddenly talk about that and they recognise things like critical minerals and having those capabilities.

So, I guess what I want to say is: they’re doing the right things, they’re challenged like everybody else but, in their benefit right now, they’ve got two things helping them – mainly their longer-term contracts and they’re also benefitting from the foreign exchange right now too.

Matthew Gordon: We need to remember the macroeconomics for this industry, the Uranium industry, nothing’s changed. It doesn’t matter Section 232 didn’t give you what you wanted. It almost doesn’t matter what came out of the 90 day Working Group, because the fundamentals don’t change. There’s a massive supply/demand gap and it’s getting bigger by the day. Billions of dollars need spending on infrastructure, so I think people need to just remember that.

Mark Chalmers: I just want to say something else too. That’s absolutely right and the fundamentals are what the fundamentals are, and everybody kind of over-focuses on Section 232. I told our shareholders that, “Look, I asked for Section 232 because it is bigger than that. But I understand why people did bias for Section 232 because it was looking…

Matthew Gordon: Everyone wants that catalyst moment. It’s Section 232, it’s their Working Group, it’s the WNA. When you’re down, you reach for anything you can. But I’d say people need to think just a little bit longer than that and it doesn’t matter if it takes another six months, another nine months, another 12 months – it’s coming and it’ll come quickly when it goes.

Let’s talk about your mill. You said the mill is something you can use to leverage your position as the US’s number one Uranium producer. You think that people will have to come to you and there will be discussions to be had at that point. Is it one of three potential working mills in the US?

Mark Chalmers: Well, look it’s the only operable, manned producing facility. There are two other facilities, but both of them haven’t ran for like 40 years. They’ve been partially reclaimed or, in some instances, people have taken a lot of equipment out, so they’re very dilapidated and not able to come online in quick order.

Matthew Gordon: So that’s good for you. But what does it mean for the other players in the US market? Do you feel that some of them are in a slightly weaker position? Are you looking at mergers? Are you looking at takeovers or JV's?

Mark Chalmers: The mill puts us in a strong position, particularly with the conventional miners, particularly if anybody wants to produce Vanadium or some of this recycle. There was a phrase that was used 40 years ago and it says: “he who has the mill owns the district”. Well, then there was something like 25 mills out the in the United States; well today there is one that operates and functions. So, you could use that phrase 40 years ago, well you could certainly use it now when you’re the only one who can actually process Uranium today.

Matthew Gordon: What are you going to do?

Mark Chalmers: The strategy is the same. We need higher prices for conventional mining. We’ll always give the main priority for that to be out mines, our ore. We’re still producing Vanadium right now. We’re actually shipping low grade ore from a mine that’s on standby in New Mexico right now. So we’re actually doing some recycling of low grade ores from idle Uranium mines. We’ll continue to use all those various arrows to improve our cash-flow optionality.

And that is why that mill survived, because it has that ability to do these side businesses when the price of Uranium was low. When it comes to others who want to use the mill, we’ll consider that on a case-by-case basis. It is our facility, it’s probably worth $300-$400M if you replaced it. We’ve got 70 or 80 people there right now working there. We’re not going to do it for free. If we consider processing somebody’s ore, we want a fair margin on that and that is entirely reasonable.

Matthew Gordon: You can push that margin out because you know what it’s going to cost them to move it somewhere else? It’s easy maths, right?

Mark Chalmers: Yeah, there’s no place to move it to. If somebody thinks “we’ll ship you some material and you can get a 10% margin on that and we can use the mill whenever we want to” – no, we’re not doing that.

Matthew Gordon: If investors buy into the macro story, then surely now is the time to go and talk about acquisitions?

Mark Chalmers: In the Section 232 process, with the remedy that we asked for, we were staying away from M&A activity because we were looking for an industry solution. Not just a solution for UR Energy and Energy Fuels and we are trying to allow enough critical mass for there to be competition amongst the various fuel parties that remain in the United States. Well, if we’re not going exactly that route and you’re more focused on critical infrastructure and what-not, that direction may change.

So, we are not opposed to M&A activities if it makes sense and maybe a little less or so than perhaps when we in the actual Section 232 process. But, I can’t stress, we were looking for an industry solution and a lot of other producers or producer wannabes were riding on our backs hoping we would get that across the line. So, we’ll be open.

Matthew Gordon: Okay, but you don’t want competition though do you?

Mark Chalmers: Some level of competition is healthy. We’re certainly not trying to come up with a monopoly. Some people said we’re monopolised by owning the mill, well we’re monopolised by owning the mill because we own it and we pay for it. If somebody wants to go out and permit and construct a mill somewhere else in the United States, they’re free to do that.

Matthew Gordon: How much cash have you got left?

Mark Chalmers: I can’t say in complete accuracy, but we should have a $40M working capital. We’re still in a strong position compared to our peers and that’s by choice. We’re glad we have that position right now.

Matthew Gordon: When you told me you need to cash position, you want to have a cash position, it makes you feel in control, are you going to need to go and raise any more money any time soon?

Mark Chalmers: Well, look we don’t want to raise money at these prices, but it is important in this business to not get too close to the wire, and I think that a lot of people own us because of the fact that we don’t sail too close to the wind. Particularly when you have the permanent facilities that we have. They are expensive and you don’t want to get that close, because you can have an event like we saw with how the stock reacted on Section 232. So, we’re going to try to maintain our strong position as much as possible.

Matthew Gordon: Do you think your shares were inflated before the 232 announcement? Do you think people were thinking this could go your way and you’re back down at the level you should be?

Mark Chalmers: Well, I mean that’s debateable. Personally, I think that we got over-punished, but obviously people were in the shares because they thought there was going to be a positive outcome, the story was so strong. So, I think if you look at right now, even after the 12th of July, a lot of the Uraniums have come off globally. There were people who were in the stock, you know, they thought that we had line of sight to positive cashflow and profits.

Matthew Gordon: What’s next – do you wait for these 90 days? What are you doing during that time – is it business as usual?

Mark Chalmers: The focus is on what potentially can get us to cashflow quicker, faster inflection points, so we’re going to focus extensively on these working groups. We’ll spend a lot of time in DC. We’ll spend a lot of time working with the administration and these various groups that will be participating in, the working group.

We’re still working on the Hill – we had very strong support on the Hill with Sarah Bruckto, Liz Cheney. We had 50 Congressmen sign a letter in our support, they sent to the President. We had 39 of our Native American employees that work at White Mason Mill, on their own initiative, wrote a letter to the President. We’ll keep pushing every angle we can push but, at the same time, we’re going to be looking at our cost and our burn, and how to best manage our balance sheet to give ourselves plenty of runway here.

Matthew Gordon: You said earlier on, you don’t regret doing it, you would do this again, but has it been a distraction?

Mark Chalmers: It took a lot of our time but, as you pointed out, we’re trying to come up with an inflection point. We’re trying to make our luck, we’re not trying to just sit on our seat. There’s a lot of people there that all they’re focused on is just doing nothing and preserving their capital and that’s not making you luck, that’s just waiting. That’s just hope as a strategy.

We will always try to make our luck and, Matt, as you know I’ve been involved in this business for over 40 years, I’ve produced Uranium all over the world. Our assets are the best in the world for the size that we fit into in terms of these junior companies. I voted with my feet, I came back from Australia for this opportunity – I’ve no regrets that I did that either. But it’s a tough business, it’s a tough business and if you’re not tough you shouldn’t be in it.

Matthew Gordon: Well, that’s a great point to finish on – that mining is not easy and it’s been particularly tough….

Mark Chalmers: The whole resource sector is challenged, there’s no question, and certainly with the Section 232 petition, we certainly got some attention on it from all sorts of angles. As I said, it’s been a big challenge, but I can tell you I sleep well at night, I’m confident but, again, I will not be reckless.

Matthew Gordon: Thank you very much, Mark, I appreciate your time. What a fantastic, honest appraisal of the situation. I think we all appreciate that and we look forward to hearing what happens in the next 70 to 80 days.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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