Energy Fuels’ Strategic Pivot: A Multi-Billion Dollar Valuation Catalyst Emerges

A newly released feasibility study has fundamentally altered the investment thesis for Energy Fuels Inc., providing a decades-long financial roadmap centered on its heavy mineral sands project in Madagascar. The detailed analysis reveals a project with billion-dollar potential, extending the company's revenue horizon and positioning it as a future cornerstone in the U.S. rare earths supply chain.

On January 8, 2026, Energy Fuels presented definitive figures for its wholly-owned Vara Mada project, formerly known as Toliara. This study establishes a clear financial model for the first time, offering analysts concrete data for valuation purposes.

The cornerstone metric is an after-tax Net Present Value (NPV) of $1.8 billion, calculated using a 10% discount rate. On a per-share basis, this translates to approximately $7.30. The study outlines a mine life of 38 years, supported by Proven and Probable reserves of 904 million tonnes at a grade of 6.1% heavy minerals, confirming the operation as a long-term cash flow generator rather than a short-term endeavor.

Robust Economics and Staged Capital Outlay

The project's financial indicators point to substantial returns. Energy Fuels anticipates peak annual EBITDA exceeding $500 million, with an average of $387 million per year over the modeled life. The calculated Internal Rate of Return (IRR) stands at 24.9%, a figure well above typical capital costs and a strong signal of projected profitability for investors.

Average annual free cash flow is estimated at $264 million. Achieving these returns requires a significant, phased capital investment plan:
* $121 million prior to the Final Investment Decision (FID)
* $769 million for the Phase 1 construction
* $142 million for the Phase 2 expansion

Key Project Metrics:
* After-Tax NPV (10% discount): $1.8 billion
* Internal Rate of Return (IRR): 24.9%
* Mine Life: 38 years
* Reserves: 904 million tonnes (Proven & Probable)
* EBITDA: Peak >$500 million/year; Average $387 million/year

Should investors sell immediately? Or is it worth buying Energy Fuels?

A Linchpin for U.S. Rare Earth Independence

The strategic significance of Vara Mada lies in its direct integration with Energy Fuels' U.S. processing infrastructure. The project is designed to supply an average of 24,000 tonnes of monazite annually, alongside 959,000 tonnes of ilmenite and 66,000 tonnes of zircon.

The monazite stream is the critical component for U.S. rare earth supply. Plans indicate this material will be shipped to the company's White Mesa Mill in Utah for further processing, effectively bridging a key gap in the domestic value chain.

Based on 2032 reference forecasts, output from Vara Mada alone could satisfy up to 30% of projected U.S. demand for light rare earth oxides. For heavy rare earth elements—including critical materials like dysprosium and terbium—the potential supply could meet approximately 85% of forecasted U.S. needs. This positions the project as a potential keystone for U.S. industrial and policy goals seeking to reduce reliance on Asian supply networks.

Market Response and Forthcoming Milestones

The market has reacted positively to the updated project economics. Shares recently traded at $18.59, marking an 11% gain over the prior week and a surge of more than 250% over a twelve-month period. The company's current market capitalization is approximately $4.41 billion.

Despite the completed feasibility study, a final investment decision remains pending. The FID is contingent on concluding negotiations with the Madagascan government regarding fiscal terms and permits. The confirmed reserve base of 904 million tonnes provides the geological foundation to support these talks.

The critical focus for the coming months will be twofold: first, whether the project's outlined economic metrics can be upheld during final negotiations, and second, the timing of a formal FID go-ahead. This decision would trigger the major pre-production investments and commence the operational rollout of the Vara Mada project.