Energy Fuels Inc.'s (EFR:TSX; UUUU:NYSE.American) Vara Mada project, to produce ilmenite, zircon, and monazite, is shown to have "significant economic potential," noted an H.C. Wainwright & Co. report.
Energy Fuels Inc.'s (EFR:TSX; UUUU:NYSE.American) revised feasibility study (FS) of its 100%-owned Vara Mada project (formerly Toliara) in Madagascar "confirms impressive scale," reported H.C. Wainwright & Co. (HCW) Analyst Heiko Ihle in a Jan. 9 research note.
"The FS cements Vara Mada's status as a generational critical mineral asset that has the potential to play a key role in the global rare earth supply chain," Ihle wrote. "We see the study as a major derisking event."
HCW reiterated its US$26.75 per share target price on the U.S. supplier of critical minerals, trading at about US$18.59/share at the time of Ihle's report, the analyst noted.
Energy Fuels remains a Buy.
The company has 237.3 million shares outstanding. Its market cap is US$4.4 billion (US$4.4B). Its 52-week range is US$3.20-27.33/share.
The Vara Mada FS outlined Proven and Probable mineral reserves of 904,000,000 tons (904 Mt) of ore with an average heavy mineral grade of 6.1%, Ihle reported.
Average annual production at the project is expected to be 959,000 tons (959 Kt) of ilmenite, 66 Kt of zircon, and 24 Kt of monazite over a 38-year life of mine (LOM).
"We emphasize that the mine plan is likely to be expanded through future drilling in the Lower Sandy Unit, which remains an open exploration target," the analyst wrote.
Ihle reviewed the economics outlined in the FS, highlighting their significant potential. The after-tax net present value discounted at 10% is US$1.8B, and the internal rate of return is 24.9%.
The rare earth prices used in the FS vary over the LOM. However, the long-term assumptions used are US$6,600/ton for monazite concentrate, US$1,250/ton for rutile, US$1,200/ton for zircon, and US$199/ton for ilmenite.
Capex for the first stage is estimated at US$769 million (US$769M) and for the second stage, US$142M. Stage 2 is expected to nearly double mining rates to 25 Mt per year, noted Ihle.
Vara Mada's average annual EBITDA is projected to be US$387M. It is expected to increase to more than US$500M at full capacity and thereby support a strong EBITDA margin of 72%.
"We are quite pleased with the economics contained in the Vara Mada FS," Ihle wrote.
The analyst incorporated the FS into HCW's model on Energy Fuels and increased HCW's net asset value multiple on UUUU to 2x from 1x to reflect the significant derisking the FS achieved.
What the FS did not include, Ihle pointed out, is additional downstream EBITDA to result from synergies between Vara Mada and Energy Fuels' White Mesa Mill in Utah. At the mill, the company could process monazite into high-purity rare earth oxides. Doing this should further increase the project's strategic value and allow Energy Fuels to help satisfy U.S. demand for light and heavy rare earth elements.
The potential upside from rare earth element separation at the mill is being evaluated in a separate FS due out later in Q1/26, Ihle noted.
"Going forward, we remain confident in Energy Fuels' ability to further derisk its rare earth business," wrote the analyst.
Last year, Energy Fuels mined 1,600,000 pounds (1.6 Mlb) of uranium at its Pinyon Plaine mine and La Sal Complex, the total exceeding management's guidance by 11%. The company produced 1 Mlb of U3O8 during the year, 350,000 pounds (350 Klb) of it in December 2025.
Looking ahead, the miner expects to mill 250 Klb of U3O8 per month throughout H1/26. Then, throughout H2/26, it will likely produce heavy rare earths on a commercial scale. Any uranium milled in H2/26 that does not get processed can be added to the inventory for processing in 2027.
Energy Fuels just completed two new long-term uranium sales contracts that should add to its deliveries from 2027 through 2032. These contracts offer exposure to the uranium market with further upside through hybrid pricing, according to management. Specifically, the final sales price is calculated from a base-escalated price and the spot price at delivery.
In 2026, HCW expects Energy Fuels to sell about 780-880 Klb of U3O8 in addition to potential spot market sales.
"Given meaningful improvements in uranium costs, the firm's cost of goods sold is likely to drop as recently produced uranium gets sold from inventories," Ihle wrote. This should improve near-term cash flow.
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As of the date of this article, officers, contractors, shareholders, and/or employees of Streetwise Reports LLC (including members of their household) own securities of Energy Fuels Inc.Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.For additional disclosures, please click here.
Disclosure for H.C. Wainwright & Co., Energy Fuels Inc., January 9, 2026
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