Shares of Energy Fuels Inc (AMEX:UUUU) rose 2.3% in premarket trading on Thursday after the company published an updated feasibility study for its Vara Mada project in Madagascar, pointing to robust economics and long-term strategic value.
The revised study indicates that the heavy mineral sands operation—formerly known as Toliara—could deliver a post-tax net present value of around $1.8 billion. The project hosts substantial deposits of titanium, zircon and rare earth minerals and is currently modeled with a mine life of 38 years. At full production, Vara Mada is expected to generate up to $500 million in annual EBITDA, with an internal rate of return of 24.9%.
Energy Fuels plans to ship monazite concentrates from Vara Mada to its White Mesa Mill in Utah, where they would be processed into separated rare earth oxides. Once fully ramped up, the company estimates the project could meet roughly 30% of U.S. demand for light rare earth oxides and as much as 85% of demand for heavy rare earth oxides by 2032.
“Vara Mada is a generational, one-of-a-kind project that has the potential to positively alter the dynamics of global rare earth and critical mineral supply chains,” said Mark S. Chalmers, CEO of Energy Fuels.
Proven and probable mineral reserves at Vara Mada are estimated at 904 million tonnes, with an average heavy mineral grade of 6.1%. Energy Fuels said it sees potential to extend the mine life beyond the initial 38 years through further optimization of the mine plan and additional drilling.
From a capital standpoint, the project is expected to require about $121 million in spending ahead of a final investment decision, followed by roughly $769 million for Stage 1 development and a further $142 million for a Stage 2 expansion.