Benzinga | Dec 15, 2021 06:03AM EST

Energy Fuels Announces Venture with Nanoscale Powders To 'Develop Innovative Rare Earth Metal-Making Technology'

Nanoscale's patented rare earth metal-making technology has potential to revolutionize rare earth metal making by reducing costs, significantly reducing greenhouse gas emissions, and reducing energy use

LAKEWOOD, Colo., Dec. 15, 2021 /PRNewswire/ - Energy Fuels Inc. (NYSE:UUUU) (TSX:EFR) ("Energy Fuels" or the "Company") is pleased to announce the execution of a Memorandum of Understanding ("MOU") with Nanoscale Powders LLC ("NSP") for the development of a novel technology (the "Technology") for the production of rare earth element ("REE") metals (the "Project"). We believe this Technology, which was initially developed by NSP, and will be advanced by the Company and NSP working together, has the potential to revolutionize the rare earth metal making industry by reducing costs of production, reducing energy consumption, and significantly reducing greenhouse gas ("GHG") emissions. Producing REE metals and alloys ("REE Metals") is a key step in a fully integrated REE supply chain, after production of separated REE oxides ("REE Oxides") and before the manufacture of neodymium iron boron ("NdFeB") magnets used in electric vehicles ("EVs"), wind generation and other clean energy and advanced technologies.

Energy Fuels is quickly building a new, environmentally friendly REE supply chain in the United States, and the Project with NSP represents an exciting opportunity to significantly improve the REE metal-making process and potentially provide Energy Fuels with a competitive advantage in the REE supply chain. At its White Mesa Mill (the "Mill") in Utah, the Company is currently producing mixed REE carbonate ("REE Carbonate") while recovering uranium from natural monazite sands ("Monazite") which are produced as a low-cost byproduct of heavy mineral sands mining in the U.S. and around the globe. Energy Fuels' REE Carbonate is the most advanced REE product being produced in the U.S. today. The Company is also moving quickly toward producing REE Oxides at the Mill using proven solvent extraction ("SX") technologies. The Mill has over 40 years of experience producing uranium and vanadium oxides using SX technology.

Founded in 2008, NSP originally focused on producing solar quality silicon metals and refractory metal powders, eventually turning its attention to the production of titanium and alloy powders through sodium reduction. More recently, NSP has developed a process to create REE Metals from REE Oxides through molten sodium reduction of anhydrous REE chloride materials in a process similar to the Kroll process (called the "Hunter Titanium Process") which is used for the production of titanium metals through sodium reduction.

The production of REE Metals utilizing the Technology will involve feeding anhydrous REE chloride materials, which are free of water, into a molten sodium bath. A rapid reaction takes place between the molten sodium and the REE chlorides. The process is highly exothermic, releasing energy, so the molten sodium acts to control the rate of the reaction. The reaction products are REE Metal and sodium chloride, commonly known as salt.

The NSP sodium reduction of REE Metals has several advantages over the industry standard REE metal making method, which utilizes electrolytic reduction of REE oxides in molten lithium fluoride/REE fluoride baths. First, the NSP process does not have any associated air emissions, and therefore presents a significant improvement over the current technology, which emits carbofluoromethane (CF4) gas, which is a powerful GHG. Second, current estimates indicate that the NSP process is significantly cheaper to operate than the conventional electrolytic methods, because it does not consume graphite crucible materials and utilizes significantly less energy and labor. Finally, the NSP process requires anhydrous chloride feeds, which we believe can be generated directly from rich liquor streams coming from the Mill's planned SX circuit. This could eliminate the need for oxalate precipitation and calcination of materials destined for REE metal making. As a result of these factors, operating cost savings are currently estimated to potentially be several times less than conventional REE metal-making methods.

As with any new technology, risks are present which must be evaluated and addressed, including successfully creating anhydrous chloride feeds at a commercial scale with the associated risk of elevated levels of oxygen in the final product, and the risk of being able to successfully remove and consolidate final REE Metal products.

NSP holds two U.S. patents and one pending patent application for the Technology, under which it has proven the ability to produce REE Metals on a kilogram batch scale basis at the U.S. Department of Energy's Technology Readiness Level ("TRL") 5. Energy Fuels' initial investment in the Project is intended to advance the Technology to allow for: (i) the continuous, pilot-scale production of 10 kilograms per hour of neodymium-praseodymium ("NdPr") metal that meets typical specifications for NdFeB magnets at TLR Level 7; (ii) the separate build of a batch reactor able to produce key minor magnet metals (e.g., dysprosium, terbium); and (iii) the demonstration of samarium-cobalt alloy production. The Project will be directed by Energy Fuels with technical support from other research firms and institutions as required.

Under the MOU, the parties will negotiate and enter into binding agreements ("Definitive Agreements") that govern the Project, including the creation of a new entity that will hold an exclusive license to the Technology as it relates to REE Metal making. The MOU contemplates a phased development of the Project to scale-up to the production of 1,000 metric tonnes of one or more REE Metals per year. Energy Fuels will have the right to earn up to a 100% interest in the entity and Technology, as it relates to REE Metal making, by making the following capital investments:

2 US$250,000 within five (5) business days after execution of the MOU;

4 US$250,000 within five (5) business days after execution and delivery of the Definitive Agreements;

6 US$1 million within five (5) business days after execution and delivery of the Definitive Agreements to be applied to the Project's 2022 budget and work plan; and

8 Energy Fuels will fund all future approved annual budgets as may be required for commercialization of the Project, up to a maximum additional expenditure of US$8.5 million over three (3) years, totaling US$10 million for the Project.

Upon the successful completion of the Project and the $10 million investment, Energy Fuels will control the exclusive rights to the entity and the Technology as it relates to REE Metal making. Energy Fuels will also have the right to cease funding at various decision points during the Project, at which point Energy Fuels will hold a percentage of the new entity and Technology, proportional to its amount contributed. If Energy Fuels ceases funding prior to earning 100% of the Technology, NSP will have the right in certain circumstances to acquire Energy Fuels' interest in the entity and Technology by reimbursing Energy Fuels for its expenditures on the Project.

Mark S. Chalmers, President and CEO of Energy Fuels stated: "Metal-making is a critical step in the rare earth supply chain. Energy Fuels has already restored monazite 'crack-and-leach' capabilities to the U.S. at our White Mesa Mill in Utah, where today we are producing a high-purity mixed rare earth carbonate, which is ready for separation. No other company in the U.S. is currently producing a high-purity REE product ready for separation at commercial levels. We are also quickly moving toward adding solvent extraction separation equipment at the Mill and associated permitting that will allow us to produce commercial separated rare earth oxide powders in the coming years. In fact, we are already well advanced with piloting these capabilities on a continuous 24/7 basis at the Mill today.

"The next step in rare earth processing and refining is turning those separated rare earth oxide powders into usable rare earth metals and alloys, particularly NdPr metal needed for NdFeB magnets used in EVs, wind generation and other technologies. We are interested in Nanoscale Powders' technology because we believe it has the potential to produce REE metals at lower cost, using less energy, and producing significantly less greenhouse gas emissions than conventional REE metal making methods. If successful, Nanoscale's metal-making technology could be orders of magnitude safer and less expensive than the current established technology. This is the type of technology we as Americans need to develop to produce advanced rare earth materials in a cost-competitive manner, while achieving the highest standards of protection of public health, safety, and the environment. Nanoscale Powders has proven their technology on a small scale, and we look forward to working with them to advance the technology to pilot scale, and then to commercial scale in the coming years. Our relationship with Nanoscale Powders demonstrates Energy Fuels' commitment to fully integrating a domestic REE processing supply chain in the most optimal and environmentally prudent manner possible."

Implementation of this initiative is subject to the execution of Definitive Agreements.