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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our financial statements for the three years ended December 31, 2020 and the related notes thereto. This Discussion and Analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including, but not limited to, those set forth under the section heading “Item 1A. Risk Factors” and elsewhere in this Annual Report. See section heading “Cautionary Statement Regarding Forward-Looking Statements.”

Outlook

Overview

In response to the proposed establishment of a strategic national U.S. Uranium Reserve program, the Company is evaluating activities aimed towards increasing uranium production at all or some of our production facilities, including the currently operating White Mesa Mill, as well as the Alta Mesa ISR Facility, the Nichols Ranch ISR Facility, the La Sal Complex and Pinyon Plain Mine, which are currently on standby. The Company may commence such activities, prior to the implementation of all program details, recognizing that there can be no guarantee that the program details will be satisfactory and that the timing and outcome of this process is therefore uncertain, or as market conditions may warrant. Alternatively, the Company may defer commencing any such activities until further clarification is obtained, or as market conditions otherwise warrant. No decisions on any project-specific actions have been made at this time.

During 2021 the Company expects to recover uranium at the White Mesa Mill from pond-returns and from alternate feed materials. The vanadium pond-return campaign that was conducted in 2019 was brought to a close in early 2020. The Company also expects to produce mixed REE carbonate from natural monazite ore during 2021, subject to successful ramp-up. The Company does not plan to extract and/or recover any amounts of uranium of any significance from its Nichols Ranch Project in 2021, which was placed on standby in the second quarter of 2020 due to the depletion of its existing wellfields. Uranium recovery is expected to be maintained at reduced levels, as a result of current uranium market conditions, until such time when market conditions improve sufficiently. Until such time that improvement in uranium market conditions is observed or suitable sales contracts can be entered into, the Company expects to defer further wellfield development at its Nichols Ranch Project and maintain that project on standby. In addition, the Company expects to keep the Alta Mesa Project and its conventional mining properties on standby.

The Company is also seeking new sources of revenue, including its emerging REE business, as well as new sources of alternate feed materials and new fee processing opportunities at the White Mesa Mill that can be processed under existing market conditions (i.e., without reliance on current uranium sales prices). The Company will also continue its support of U.S. governmental activities to support the U.S. uranium mining industry, including the proposed establishment of a U.S. Uranium Reserve. In addition, the Company is in discussions to potentially sell certain of its non-core properties, although there are currently no binding offers, and there can be no assurance that a sale will be completed or that we will be successful in completing a sale on acceptable terms. The Company will evaluate additional acquisition and disposition opportunities that may arise.

Extraction and Recovery Activities Overview

During the year ended December 31, 2020, the Company recovered approximately 196,500 pounds of U3O8, all of which were for the account of the Company. The Company also recovered approximately 67,000 pounds of V2O5, all of which were for the account of the Company. The Company expects to recover approximately 30,000 to 60,000 pounds of U3O8 in the year ending December 31, 2021 for its own account. The Company expects to produce no vanadium. In 2021, the Company also expects to produce approximately 2,000 to 3,000 tons of mixed REE carbonate at the mill, containing approximately 1,000 to 1,600 tons of total rare earth oxides (“TREO”).

The Company has strategically opted not to enter into any uranium sales commitments for 2021. Therefore, subject to the proposed establishment of a U.S. Uranium Reserve and general market conditions, all 2021 uranium production is expected to be added to existing inventories, which inventories are expected to total approximately 720,000 to 750,000 pounds of U3O8 at year-end. Subject to any actions the Company may take in response to the proposed establishment of a U.S. Uranium Reserve or improvements in general market conditions, both ISR and conventional uranium extraction and/or recovery is expected to continue to be maintained at reduced levels until such time that improvements in uranium market conditions are observed or suitable sales contracts can be entered into. All V2O5 inventory is expected to be sold on the spot market if prices rise significantly above current levels, but otherwise maintained in inventory. The Company expects to sell all or a portion of its mixed REE carbonate to global separation facilities and/or to stockpile it for future separation at the Mill or elsewhere.

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ISR Activities

We extracted and recovered approximately 6,000 pounds of U3O8 from the Nichols Ranch Project for the year ended December 31, 2020. The Company expects to produce insignificant quantities of U3O8 in the year ending December 31, 2021 from Nichols Ranch.

As of December 31, 2020, the Nichols Ranch wellfields had nine header houses that previously extracted uranium, and which are now depleted. Until such time as improvement in uranium market conditions is observed, the proposed U.S. Uranium Reserve is established, and/or suitable sales contracts can be procured, the Company expects to defer development of further header houses at its Nichols Ranch Project. The Company currently holds 34 fully-permitted, undeveloped wellfields at Nichols Ranch, including four additional wellfields at the Nichols Ranch wellfields, 22 wellfields at the adjacent Jane Dough wellfields, and eight wellfields at the Hank Project, which is fully permitted to be constructed as a satellite facility to the Nichols Ranch Plant.

The Company expects to continue to keep the Alta Mesa Project on standby until such time as improvements in uranium market conditions are observed, the proposed U.S. Uranium Reserve is established, and/or suitable sales contracts can be procured.

Conventional Activities

Conventional Extraction and Recovery Activities

During the year ended December 31, 2020, the White Mesa Mill recovered approximately 190,500 pounds of U3O8 and approximately 67,000 pounds of V2O5. The Mill also focused on developing its REE recovery business. During 2021, the Company expects to recover approximately 30,000 to 60,000 pounds of U3O8 at the White Mesa Mill, including uranium recovered through the processing of REE- and uranium-bearing natural monazite ore. The Company also expects to produce approximately 2,000 to 3,000 tons of mixed REE carbonate at the Mill, containing approximately 1,000 to 1,600 tons TREO. The Company currently has approximately 127,000 pounds of U3O8 contained in stockpiled alternate feed material and ore inventory that can be recovered in the future for the U.S. uranium reserve or as general market conditions warrant. In addition, there remains an estimated 1.5-3 million pounds of solubilized recoverable V2O5 inventory remaining in the tailings facility awaiting future recovery, as market conditions may warrant.

The White Mesa Mill has historically operated on a campaign basis whereby uranium and/or vanadium recovery is scheduled as mill feed, cash needs, contract requirements, and/or market conditions may warrant. The Company currently expects that planned uranium production from alternate feed materials, processing natural monazite ore for the recovery of uranium and REEs, and receipt of uranium-bearing materials from mine cleanup activities will keep the Mill in operation through 2021 and beyond. The Company is also actively pursuing opportunities to process additional sources of natural monazite ore, new and additional alternate feed material sources, and new and additional low-grade ore from third parties in connection with various uranium clean-up requirements. Successful results from these activities would allow the Mill to extend operations well into 2022 and beyond.

However, if at any time the Company is unable to justify full operation of the Mill, the Company would place uranium, REE and/or vanadium recovery activities at the Mill on standby at that time. While on standby, the Mill would continue to dry and package material from the Nichols Ranch Plant, if operating, and continue to receive and stockpile alternate feed materials for future milling campaigns. Each future milling campaign would be subject to receipt of sufficient mill feed and resulting cash flow that would allow the Company to operate the Mill on a profitable basis or to recover all or a portion of the Mill's standby costs.

Conventional Standby, Permitting and Evaluation Activities

During the year ended December 31, 2020, standby and environmental compliance activities occurred at the Pinyon Plain Project. Subject to any actions the Company may take in response to the proposed establishment of a U.S. Uranium Reserve and general market conditions, during 2021, the Company plans to continue carrying out engineering, metallurgical testing, procurement and construction management activities at its Pinyon Plain Project. The timing of the Company’s plans to extract and process mineralized materials from this project will be based on the results of this additional evaluation work, along with market conditions, available financing, sales requirements, and/or permits required for copper recovery at the Mill.

The Company is selectively advancing certain permits at its other major conventional uranium projects, such as the Roca Honda Project, a large, high-grade conventional project in New Mexico. The Company will also maintain required permits at the Company’s conventional projects, including the Sheep Mountain Project, La Sal Complex, and the Whirlwind mines. In

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addition, the Company will continue to evaluate the Bullfrog Property at its Henry Mountains Project. Expenditures for certain of these projects have been adjusted to coincide with expected dates of price recoveries based on the Company’s forecasts. All of these projects serve as important pipeline assets for the Company’s future conventional production capabilities, as market conditions warrant. The Company is also in discussions to potentially sell the Tony M, Daneros, Rim and other non-core conventional assets.

Uranium Sales

During the year ended December 31, 2020, the Company completed no sales of uranium. The Company currently has no remaining contracts, and therefore all existing uranium inventory and future production is fully unhedged to future uranium price changes.

Vanadium Sales

During 2020, the Company completed no sales of vanadium. The Company expects to sell finished vanadium product when justified into the metallurgical industry, as well as other markets that demand a higher purity product, including the aerospace, chemical, and potentially the vanadium battery industries. The Company expects to sell to a diverse group of customers in order to maximize revenues and profits. The vanadium produced in the recent pond return campaign was a high-purity vanadium product of 99.6%-99.7% V2O5. The Company believes there may be opportunities to sell certain quantities of this high-purity material at a premium to reported spot prices. The Company may also retain vanadium product in inventory for future sale, depending on vanadium spot prices and general market conditions.

Rare Earth Sales

The Company expects to commence commercial production of a mixed REE carbonate in 2021. Subject to successfully ramping-up production of a salable product during 2021, the Company expects to sell some or all of this intermediate REE product to Neo’s Silmet separation facility in Europe and potentially to other REE separation facilities outside the U.S. To the extent not sold, the Company expects to stockpile mixed REE carbonate at the Mill for future separation and other downstream REE processing at the Mill or elsewhere. See “ITEM 1 DESCRIPTION OF BUSINESS: The Company’s Rare Earth Element Business, above and Update on Rare Earth Element Initiative,” below.

The Company also continues to pursue new sources of revenue, including additional alternate feed materials and other sources of feed for the White Mesa Mill.

COVID-19

The Company continues to evaluate the effects of the global COVID-19 pandemic on the Company’s business objectives, projections and workforce. Due to the current uncertainty, the Company is continuing its cost-cutting measures, while retaining the operational readiness of the Company’s core production assets. The Company is also continuing to work to secure U.S. government support for U.S. uranium miners. To date, although the Company has made operational adjustments since the onset of the pandemic to ensure its workforce remains protected, the Company has not been required to shut down any operations as a result of COVID-19. None of these operational adjustments have been material to the Company. The Company has evaluated any potential shutdown of Company production facilities as a result of COVID-19, and has determined that any such shutdown could be accommodated by the Company in a manner consistent with a typical shutdown of Company production facilities as a result of depressed commodity prices. Management believes the Company is well-capitalized and will be able to withstand facility shutdowns or depressed share prices as a result of COVID-19 for at least the next twelve months.

Bought Deal Financing

On February 20, 2020, the Company closed a bought deal public offering of Common Shares made pursuant to an underwriting agreement dated February 13, 2020 between the Company and a syndicate of underwriters led by Cantor Fitzgerald & Co. as lead underwriter and sole book-runner, and H.C. Wainwright & Co., LLC, Eight Capital, Haywood Securities Inc. and Roth Capital Partners, LLC (the “Offering”). Pursuant to the Offering, the Company issued an aggregate of 11,300,000 Common Shares at a price of $1.47 per share for gross proceeds of $16.61 million. The Company received net proceeds, after commissions and fees, of $15.14 million from the Offering.

Full Redemption of Convertible Debentures

On July 14, 2020, the Company redeemed Cdn$10.43 million principal amount of the Cdn$20.86 million Convertible Debentures then outstanding for approximately $7.78 million. The Convertible Debentures were redeemable for an amount equal to 101% of principal plus accrued and unpaid interest thereon, up to but excluding July 14, 2020. On October 6, 2020, the Company redeemed the remaining Cdn$10.43 million principal amount of the Convertible Debentures then outstanding for

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approximately $7.82 million. The Convertible Debentures were redeemable for an amount equal to 101% of principal plus accrued and unpaid interest thereon, up to but excluding October 6, 2020. As a result of the final redemption, no Convertible Debentures are outstanding or subject to the terms of the Indenture, and the Convertible Debentures have ceased to be listed on the TSX. See “Note 11 to the Financial Statements: Loans and Borrowings.” The Company decided to redeem all of the Convertible Debentures prior to maturity because the U.S.-Canada currency exchange rate was favorable, the Company had sufficient cash available, and the Company avoided approximately US$0.46 million in interest payments in 2020 by doing so. By proactively managing its outstanding indebtedness in this way, the Company was able to redeem the Convertible Debentures on the Company’s own timing and terms and with minimal market disruption. The Company currently has no other remaining short- or long-term debt.

Agreement to Acquire Prompt Fission Neutron (PFN) Borehole Logging Technology and Equipment

On May 6, 2020, the Company announced it had entered into an agreement to acquire from GeoInstruments Logging LLC (“GIL”) all of its Prompt Fission Neutron (“PFN”) technology and equipment, including all of its related intellectual property, giving Energy Fuels the exclusive right to use, license, and service this particular PFN technology globally. PFN is critical to successful uranium production particularly from many in situ recovery (“ISR”) deposits, as it more accurately measures downhole in-situ U3O8 ore grade versus traditional Total Gamma and Spectral Gamma methods. On July 31, 2020, the parties closed the transaction and all such equipment and technology was transferred to the Company.

The PFN equipment and technology acquired by Energy Fuels includes: four (4) PFN tools; nine (9) gamma tools; two (2) low-mileage, heavy-duty logging trucks with logging and associated equipment; power supplies, computers, communication, and other technology; and all associated intellectual property, and the sole right to utilize and license the acquired PFN technology globally. The total consideration paid by Energy Fuels to GIL was $0.5 million cash.

Energy Fuels currently has some PFN equipment in various states of repair, which it has used for its mining operations in the past, as do other companies in the U.S. and around the world. With the acquisition of this additional PFN equipment and technology from GIL, Energy Fuels is not only able to utilize the additional equipment to ramp-up production from its ISR properties more quickly and efficiently in the event of improved market conditions, but has also secured the ability to service, repair and maintain PFN equipment currently held by the Company and others, as well as license this technology to others in the future.

Update on Rare Earth Element Initiative

On April 13, 2020, the Company announced its intent to enter the REE market following several months of review and testing, including discussions with various technical experts and the U.S. government. The U.S. government is actively seeking a domestic source of REE minerals, which are needed for national defense among other applications.

REEs are a group of 17 chemical elements (the 15 elements in the lanthanum series, plus yttrium and scandium) that have a variety of industrial, energy, military and defense uses, including automotive components, communications technology, clean energy production, consumer electronics, defense systems, advanced magnets, lasers and numerous other applications. According to a 2017 report by the United States Geological Survey (“USGS”), China has controlled more than 90% of the global supply of REEs since the late-1990s and has placed restrictions on REE exports since 2010.

Energy Fuels believes the White Mesa Mill is uniquely suited to potentially receive and process a number of different types of ores for the recovery of REEs (along with uranium), which, if achievable on a commercial basis and subject to the receipt of any required license or permit amendments, would eliminate the current need to ship those ores to China for processing. If successful, the Company expects to offer customers tolling or processing arrangements at the White Mesa Mill.

On May 21, 2020, the Company announced it had entered into consulting agreements with Constantine Karayannopoulos and Brock O’Kelley, two REE industry experts who each have decades of experience producing commercially viable rare earth products, to aid in the development and implementation of commercial and technical REE strategies for the Company’s REE program. A chemical engineer by training with more than 25 years of experience in the rare earth industry, Mr. Karayannopoulos, was at the time of the announcement Chair of Neo Performance Materials (TSX:NEO) (“Neo”), one of the world’s leading producers of advanced industrial materials, including rare earth-based engineered products, for multiple global markets. Mr. O’Kelley played a key role in the operation of the Mountain Pass, California rare earth processing facility during the 1990s and 2000s. Both are industry veterans with extensive knowledge of REE processing facility design, start-up, operations, and downstream value-added manufacturing of advanced REE products. On July 7, 2020, Mr. Karayannopoulos was reappointed as President and CEO of Neo. As a result of his new executive roles with Neo, his consulting agreement with the Company ended on August 6, 2020. On July 31, 2020, the Company entered into a non-exclusive Letter of Intent with Neo, under which: (i) Mr. Karayannopoulos and other Neo personnel will continue to assist Energy Fuels in developing commercial and technical aspects of the Company’s REE strategy, including the potential production of a rare earth oxide concentrate at the Mill that can be sold to REE separation facilities; and (ii) the Company and Neo will work together toward potentially creating

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a longer term mutually beneficial relationship, which may involve commitments to buy and sell all or a portion of the REE concentrate produced at the Mill or other commercial arrangements.

On December 14, 2020, the Company announced it entered into a three-year supply agreement with The Chemours Company (NYSE: CC) (“Chemours”) to acquire a minimum of 2,500 tons per year of natural monazite sands, one of the highest-grade REE ores in the world, from Chemours’ Offerman Mineral Sand Plant located in Georgia. The Company expects to process this monazite at the Mill, starting in 2021, to recover the contained uranium and to produce a marketable mixed REE carbonate as a step toward re-establishing a fully-integrated U.S. REE supply chain.

On March 1, 2021, the Company and Neo jointly announced that they had entered into an agreement in principle, subject to completion of definitive agreements, under which Energy Fuels will process natural monazite sands into an REE Carbonate beginning in March or April 2021 and ship a portion of that production to Neo's rare earth separations facility in Sillamäe, Estonia ("Silmet"). Neo will then process the REE Carbonate into separated rare earth materials for use in rare earth permanent magnets and other rare earth-based advanced materials. Silmet is the only operational rare earth separations facility in Europe and has been separating rare earths into commercial value-added products for more than 50 years. Implementation of this initiative is subject to successful ramp-up to commercial-scale operations, execution of definitive agreements, and optimization of the companies' production processes.

Upon a successful ramp-up of this program, the Company will be the first U.S. company in several years to produce a marketable mixed REE concentrate ready for separation on a commercial scale. The Company estimates that the amount of REEs contained in the monazite sands to be supplied by Chemours will equal close to 10% of total current U.S. REE demand, as contained in end-use products.

Removal and recovery of the uranium and other radionuclides from rare earth ores is a key aspect of Energy Fuels’ value proposition, as many REE separation and recovery facilities are not able to handle those radionuclides from a technical or regulatory standpoint. The White Mesa Mill has a 40-year history of responsibly handling, processing and recycling uranium bearing materials. Therefore, it has the potential to provide a crucial link in a commercially viable U.S. REE supply chain. See ITEM 1 DESCRIPTION OF BUSINESS: The Company’s Rare Earth Element Business, above.

Proposed Establishment of a U.S. Uranium Reserve and U.S. Nuclear Fuel Working Group Update

On January 16, 2018, the Company participated in the joint filing of a Petition for Relief under Section 232 of the Trade Expansion Act of 1962 (as amended) from Imports of Uranium Products that Threaten National Security (the “Petition”). The Petition describes how uranium and nuclear fuel from state-owned and state-subsidized enterprises in Russia, Kazakhstan, Uzbekistan and China are believed to represent a threat to U.S. national security.

On July 18, 2018, the U.S. Department of Commerce (“DOC”) initiated an investigation in response to the Petition (the “Section 232 Investigation”).

On April 14, 2019, the DOC completed the Section 232 Investigation, and the Secretary of Commerce submitted a report to the former President of the United States containing his findings (the “Section 232 Report”).

On July 12, 2019, in response to the Section 232 Report, former President Trump issued a memorandum, where he stated that “I agree with the Secretary that the United States uranium industry faces significant challenges in producing uranium domestically and that this is an issue of national security.” In order “to address the concerns identified by the Secretary regarding domestic uranium production and to ensure a comprehensive review of the entire domestic nuclear supply chain,” former President Trump formed the U.S. Nuclear Fuel Working Group (the “Working Group”) to “examine the current state of domestic nuclear fuel production to reinvigorate the entire nuclear fuel supply chain, consistent with United States national security and nonproliferation goals.” Former President Trump instructed the Working Group to “develop recommendations for reviving and expanding domestic nuclear fuel production,” and to submit a report to him within 90 days “setting forth the Working Group’s findings and making recommendations to further enable domestic nuclear fuel production if needed.”

On February 10, 2020, the federal executive Budget for fiscal year 2021 (October 1, 2020 through September 30, 2021) (the “Budget”) was published. The Budget “Supports Nuclear Fuel Cycle Capabilities,” and states that “[o]n July 12, 2019, the [former] President determined that ‘...the United States uranium industry faces significant challenges in producing uranium domestically and that this is an issue of national security.’ The Budget establishes a U.S. Uranium Reserve to provide additional assurances of availability of uranium in the event of a market disruption.” Table 25-1 of the Budget sought congressional appropriations of $150 million per year over the next 10 years (totaling $1.5 billion over that time frame) for domestic uranium purchases. For fiscal 2021 (October 1, 2020 through September 30, 2021), the Budget sought an appropriation of $150 million, “to remain available until expended,” as the appropriation for the first year of the 10-year program. The Budget further stated that “Establishing a Uranium Reserve provides assurance of availability of uranium in the event of a market disruption and

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supports strategic U.S. fuel cycle capabilities. This action addresses immediate challenges to the production of domestic uranium and reflects the Administration’s Nuclear Fuel Working Group (NFWG) priorities. The NFWG will continue to evaluate issues related to uranium supply chain and fuel supply.”

On April 23, 2020, the Working Group published its report: Restoring America’s Competitive Nuclear Energy Advantage: A strategy to assure U.S. national security. This comprehensive strategy sought to revive and strengthen U.S. nuclear fuel capabilities, starting with uranium mining, with the goals of supporting U.S. energy and national security, preventing geopolitical adversaries (particularly those in Russia) from using their nuclear capabilities to influence the U.S. and the world, and promoting global non-proliferation objectives and nuclear safety. The report stated that “the clear outcome of the Working Group’s efforts is confirmation that it is in the nation’s national security interests to preserve the assets and investments of the entire U.S. nuclear enterprise and to revitalize the sector to regain U.S. global nuclear leadership.” The report recommended government purchases to establish a Uranium Reserve, as contemplated by the Budget, and other actions aimed to strengthen the entire nuclear fuel cycle.

On December 27, 2020, the COVID-Relief and Omnibus Spending Bill, which includes $75 million for the proposed establishment of a strategic U.S. Uranium Reserve, was signed into law by the United States Congress. This key funding opens the door for the U.S. government to purchase domestically-produced uranium to guard against potential commercial and national security risks presented by the country’s near-total reliance on foreign imports of uranium. The Company stands ready to benefit from this program through sales out of its existing uranium inventories and future production from its mines and facilities. However, because the U.S. Uranium Reserve has yet to be established at this time, the details of implementation of activities pursuant to the new law have not yet been defined. As a result, there can be no certainty as to the outcome of a U.S. Uranium Reserve, if any, including the process for and details of its development, and any resulting support for the Company’s ongoing and planned activities, or for any further evaluations of the Working Group.

If the uranium and vanadium markets or general market conditions do not improve, whether as a result of the establishment of a U.S. Uranium Reserve or otherwise, the Company may further reduce its operational activities as required in order to minimize its cash expenditures while preserving its core asset base for increased production in the future, as market conditions may warrant.

The Company’s Plans in Response to the Proposed U.S. Uranium Reserve

In response to the proposed establishment of a U.S. Uranium Reserve, the Company is evaluating activities aimed towards increasing uranium production at all or some of its production facilities, subject to general market conditions. No decisions on any project-specific actions to be taken in response to the proposed establishment of a U.S. Uranium Reserve have been made at this time.

Renewal of the Russian Suspension Agreement

On September 14, 2020, the DOC announced that it had obtained Russia's agreement to extend limits on uranium imports into the U.S. from Russia through 2040 under an extended Russian Suspension Agreement. This is an important step toward maintaining the long-term health of the U.S. uranium mining industry. The DOC won important concessions from Russia, including lower quotas starting in the mid-2020s, allowing only a portion of the quotas to be used for the sale of U3O8 and conversion into the U.S., and strict controls on Russian enrichment service contracts, reducing U.S. dependence on Russian uranium in the long term. While the extended Russian Suspension Agreement is an important step toward maintaining the long-term health of the U.S. uranium mining industry, it does not supplant the need for the establishment of a Uranium Reserve as proposed in the COVID-Relief and Omnibus Spending Bill and as recommended by the Working Group.

Management Streamlining

On August 20, 2020, the Company announced that it was making a number of changes to its management team in order to reduce costs, flatten the organizational structure, and focus on the ongoing growth of a new generation of U.S. uranium and REE professionals, including the following, effective September 1, 2020: (a) Mr. Scott Bakken, former Senior Director, Regulatory Affairs, became the Vice President, Regulatory Affairs, responsible for permitting and regulatory matters relating to all of the Company’s operations, both conventional and ISR, and also for overall worker health and safety matters at the Company; (b) Mr. Bernard Bonifas, former Director, Wyoming Operations, became the Director, ISR Operations, responsible for all of the Company’s ISR operations, including its Nichols Ranch ISR project in Wyoming and its Alta Mesa ISR project in Texas; (c) Ms. Sarai Luksch, CPA, joined the Company as Controller; (d) Ms. Dee Ann Nazarenus, former Director, Human Resources & Administration, became the Vice President, Human Resources & Administration, responsible for planning, developing, organizing, implementing, directing and evaluating all human resource functions of the Company, and directing and managing all administrative functions of the Company; and (e) Mr. Logan Shumway, former Manager of the Company’s

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White Mesa Mill, became the Director, Conventional Operations, responsible for overseeing the advancement of the Company’s REE objectives, in addition to being responsible for overall White Mesa Mill management. In addition, and in support of the objective to reduce costs, effective as of August 31, 2020, former Chief Operating Officer, Mr. W. Paul Goranson left the Company to pursue other opportunities, and effective as of October 31, 2020, former Chief Accounting Officer, Mr. Matthew Tarnowski, left the Company to pursue other opportunities.

Continued Efforts to Minimize Costs

The Company will continue to seek ways to minimize the costs of maintaining its critical properties in a state of readiness for potential improvements in market conditions, and is evaluating whether additional cost-cutting measures may be warranted at this time as a result of general market conditions, such as the possibility of monetizing non-core conventional assets of the Company. See “ITEM 1 DESCRIPTION OF BUSINESS: Potential Sale of Non-Core Assets,” above.

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Results of Operations

The following table summarizes the results of operations for the years ended December 31, 2020, 2019 and 2018 (in thousands of dollars):

Years ended December 31,

Revenues

Uranium concentrates $ — $ 66 $ 30,789

Vanadium concentrates — 2,237 —

Alternate feed materials processing and other 1,658 3,562 932

Costs and expenses applicable to revenues

Costs and expenses applicable to uranium concentrates — 63 14,752

Costs and expenses applicable to vanadium concentrates — 1,805 —

Costs and expenses applicable to alternate feed materials and other — 2,079 —

Total costs and expenses applicable to revenues — 3,947 14,752

Other operating costs

Selling, general and administration

Intangible asset amortization — — 2,502

Basic and diluted net loss per share $ (0.23) $ (0.40) $ (0.30)

Results of Operations

Year ended December 31, 2020 compared to year ended December 31, 2019

For the year ended December 31, 2020 the Company recorded a net loss of $27.87 million or $0.23 per share compared with a net loss of $38.09 million or $0.40 per share for the year ended December 31, 2019.

For the year ended December 31, 2020, the Company recorded an operating loss of $24.63 million compared with an operating loss of $40.58 million for the year ended December 31, 2019.

Revenues

Previously, the Company’s revenues from uranium were based on delivery schedules under long-term contracts, which could vary from quarter to quarter. As of December 31, 2018, the Company no longer had any uranium sales contacts. Any future

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sales of uranium will be subject to sale in the spot market until a time when the Company can agree to terms for long-term sales contracts or potentially pursuant to direct government purchases as contemplated by the Budget. In the year ended December 31, 2019, the Company initiated the selling of vanadium recovered from Pond Return at the White Mesa Mill under a Sales and Agency Agreement appointing an exclusive sales and marketing agent for all vanadium pentoxide produced by the Company.

Revenues for the year ended December 31, 2020 totaled $1.66 million, all of which were related to fees for ore received from a third-party uranium mine.

Revenues for the year ended December 31, 2019 totaled $5.87 million, of which $2.24 million was related to sales of approximately 202,000 pounds of vanadium concentrates and $3.56 million was related to toll processing of uranium concentrates and fees for ore received from third-party uranium mines.

Operating Expenses

Uranium and Vanadium recovered and costs and expenses applicable to revenue

In the year ended December 31, 2020, the Company recovered approximately 6,000 pounds of U3O8 from ISR recovery activities for the Company’s own account and approximately 67,000 pounds of V2O5 from Pond Return. The Company recovered approximately 190,500 pounds of U3O8 from the pond solutions and alternate feed materials at the White Mesa Mill.

In the year ended December 31, 2019, the Company recovered approximately 70,000 pounds of U3O8 from ISR recovery activities for the Company’s own account and approximately 1,807,000 pounds of V2O5 from Pond Returns.

There are no costs and expenses applicable to revenue for the year ended December 31, 2020 as the Company did not make any concentrate sales of U3O8 or V2O5 and only collected a fee to receive ore from a third-party uranium mine for which the Company incurred de minimis costs, compared with $3.95 million for the year ended December 31, 2019. Costs and expenses applicable to revenue for the year ended December 31, 2019 consisted of $1.81 million from V2O5 and $2.08 millionrelated to alternate feed materials.

Other Operating Costs and Expenses

Development, permitting and land holding

For the year ended December 31, 2020, the Company spent $4.33 million for development of the Company’s properties, which did not include costs associated with the V2O5 test-mining program at the La Sal Project, and significantly less costs associated with V2O5 production at the White Mesa Mill, as were incurred during the year ended December 31, 2019. As a result of a downward revision to the Company's asset retirement obligation estimates, approximately $0.85 million was recorded as an offset to these expenses. For the year ended December 31, 2019, we spent $9.18 million primarily due to the development of the V2O5 test-mining program at the La Sal Project as well as expenses associated with ramping up V2O5 production at the White Mesa Mill.

While we expect the amounts relative to the items listed above have added future value to the Company, we expense these amounts as we do not have proven or probable reserves at any of the Company’s projects under SEC Industry Guide 7.

Standby costs

The Company’s La Sal, Daneros, and Arizona 1 Projects were on standby during the three years ended December 31, 2020. In the beginning of 2018 as well as the beginning of 2020, the White Mesa Mill was operated at lower levels of uranium recovery, including prolonged periods of standby. Costs related to the care and maintenance of the standby mines, along with standby costs incurred while the White Mesa Mill was operating at low levels of uranium recovery or on standby, are expensed.

For the year ended December 31, 2020, standby costs totaled $4.02 million compared with $2.58 million in the prior year. The increase is primarily related to a reduction in recovery activities at Nichols Ranch as it was placed on standby during the quarter ended June 30, 2020, and prolonged periods of standby at the Mill. As a result of a downward revision to the Company's asset retirement obligation estimates, approximately $7.00 million was recorded as an offset to these expenses.

Accretion

Accretion related to the asset retirement obligation for the Company’s properties decreased for the year ended December 31, 2020 to $1.91 million compared with the prior year of $1.93 million, primarily due to changes in timing of estimated reclamation activities at some of the Company's projects.

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Selling, General, and Administrative

Selling, general and administrative expenses include costs associated with marketing uranium, corporate, general and administrative costs and intangible asset amortization from favorable contracts. Selling, general and administrative expenses consist primarily of payroll and related expenses for personnel, contract and professional services, share-based compensation expense and other overhead expenditures. Selling, general and administrative expenses totaled $14.38 million for the year ended December 31, 2020 compared to $14.45 million for the year ended December 31, 2019. For the year ended December 31, 2020, the Company incurred approximately $1.04 million in one-time management streamlining restructuring expenses.

Impairment of Inventories

For the years ended December 31, 2020 and 2019, the Company recognized $1.64 million and $14.35 million, respectively, in impairment charges related to inventory to value such inventory at the lower of cost and net realizable value. The impairment of inventories is due to continued lower uranium and vanadium prices versus our cost to produce. The decrease in impairment charges for the year ended December 31, 2020 was primarily related to lower production levels as well as improved uranium prices.

Interest Expense and Other Income and Expenses

Interest Expense

Interest expense for the year ended December 31, 2020 was $0.95 million compared with $1.49 million in the prior year due to early redemption of the Convertible Debentures prior to maturity.

Other income and expense

For the year ended December 31, 2020, other expenses net of other income totaled $2.29 million. These amounts primarily consist of a mark-to-market loss on the increase in fair value of warrant liabilities of $5.44 million, offset by a $1.84 million mark-to-market gain on investments accounted for at fair value, a gain on foreign exchange of $0.77 million, a mark-to-market gain on the change in the fair value of the Convertible Debentures of $0.16 million, interest income of $0.15 million, and other of $0.23 million.

For the year ended December 31, 2019, other income net of other expenses totaled $3.98 million. These amounts primarily consist of a gain on the change in the mark-to-market values of the Convertible Debentures of $0.29 million, a gain on the decrease in value of warrant liabilities of $3.73 million, and interest income of $0.48 million, offset by $0.15 million loss in investments accounted for at fair value and other of $0.32 million.

Results of Operations

Year ended December 31, 2019 compared to year ended December 31, 2018

For the year ended December 31, 2019 the Company recorded a net loss of $38.09 million or $0.40 per share compared with a net loss of $25.36 million or $0.30 per share for the year ended December 31, 2018.

For the year ended December 31, 2019, the Company recorded an operating loss of $40.58 million compared with an operating loss of $21.31 million for the year ended December 31, 2018.

Revenues

The Company’s revenues from uranium were previously based on delivery schedules under long-term contracts, which could vary from quarter to quarter. As of December 31, 2018, the Company no longer has any uranium sales contacts. Any future sales of uranium will be subject to sale in the spot market until a time when the Company can agree to terms for long-term sales contracts or potentially pursuant to direct government purchases as contemplated by the proposed Uranium Reserve. In the year ended December 31, 2019, the Company initiated the selling of vanadium recovered from its pond solution at the White Mesa Mill under a Sales and Agency Agreement appointing an exclusive sales and marketing agent for all vanadium pentoxide produced by the Company.

Revenues for the year ended December 31, 2019 totaled $5.87 million, of which $2.24 million was related to sales of approximately 202,000 pounds of vanadium concentrates and $3.56 million was related to toll processing of uranium concentrates and fees for ore received from third-party uranium mines.

Revenues for the year ended December 31, 2018 totaled $31.72 million, of which $30.79 million was related to sales of 650,000 pounds of U3O8, which included the sale of 450,000 pounds of U3O8 pursuant to term contracts at an average price of

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$57.24 per pound and the sale of 200,000 pounds of U3O8 into contracts based on spot market prices at an average price of $25.16 per pound.

Operating Expenses

Uranium and Vanadium recovered and costs and expenses applicable to revenue

In the year ended December 31, 2019, the Company recovered approximately 70,000 pounds of U3O8 from ISR recovery activities for the Company’s own account and approximately 1,807,000 pounds of V2O5 from Pond Returns.

In the year ended December 31, 2018, the Company recovered 917,000 pounds of U3O8 of which 493,000 pounds were for the Company’s own account and 424,000 pounds were for the account of a tolling customer. Of the 493,000 pounds recovered for its own account, 137,000 pounds were from alternate feed sources, 216,000 pounds were from uranium recovered from existing tailings pond solutions at the White Mesa Mill, and 140,000 pounds were from ISR recovery activities.

Costs and expenses applicable to revenue for the year ended December 31, 2019 totaled $3.95 million, compared with $14.75 million for the year ended December 31, 2018. Included in cost and expenses applicable to revenue is $2.08 million and nil related to toll processing and other for the years ended December 31, 2019 and 2018, respectively. Costs and expenses applicable to revenue for the year ended December 31, 2019 consisted of $1.81 million from V2O5 and $2.08 million related to alternate feed materials. All costs and expenses applicable to revenue for 2018 were related to uranium concentrates.

Other Operating Costs and Expenses

Development, permitting and land holding

For the year ended December 31, 2019, the Company spent $9.18 million for development of the Company’s properties. This is primarily due to the development of the V2O5 test-mining program at the La Sal Project as well as expenses associated with ramping up V2O5 production at the White Mesa Mill.

For the year ended December 31, 2018, we spent $9.91 million for development, permitting and land holding, comprised of the acquisition of royalties, the development of the Pinyon Plain Project and permitting and land holding costs related to the Pinyon Plain Project, development of the V2O5 test mining program at the La Sal Project as well as expenses associated with preparing the White Mesa Mill for V2O5 production.

While we expect the amounts relative to the items listed above have added future value to the Company, we expense these amounts as we do not have proven or probable reserves at any of the Company’s projects under SEC Industry Guide 7.

Standby costs

The Company’s La Sal, Daneros, and Arizona 1 Projects were on standby during the three years ended December 31, 2019. In the beginning of 2018, the White Mesa Mill was operated at lower levels of uranium recovery, including prolonged periods of standby. Costs related to the care and maintenance of the standby mines, along with standby costs incurred while the White Mesa Mill was operating at low levels of uranium recovery or on standby, are expensed.

For the year ended December 31, 2019, standby costs totaled $2.58 million compared with $5.11 million in the prior year. The decrease is primarily related to vanadium recovery activities at the White Mesa Mill.

Accretion

Accretion related to the asset retirement obligation for the Company’s properties increased for the year ended December 31, 2019 to $1.93 million compared with the prior year of $1.84 million, primarily due to normal accretion activity.

Selling, General, and Administrative

Selling, general and administrative expenses include costs associated with marketing uranium, corporate and general and administrative costs and intangible asset amortization from favorable contracts. Selling, general and administrative expenses consist primarily of payroll and related expenses for personnel, contract and professional services, share-based compensation expense and other overhead expenditures. Selling, general and administrative expenses totaled $14.45 million for the year ended December 31, 2019 compared to $16.84 million for the year ended December 31, 2018. The decrease is a result of the Company not recognizing any intangible amortization cost from favorable contracts in the year ended December 31, 2019 as the Company does not have any additional contract sales, offset by an increase in spending on the Section 232 Petition and related Working Group activities of $0.77 million.

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Impairment of Inventories

For the year ended December 31, 2019, the Company recognized $14.35 million in impairment charges related to inventory to value such inventory at the lower of cost and net realizable value, and included in impairment charges were depreciation expenses of $2.09 million. The impairment of inventories is due to continued lower uranium prices versus our cost to produce at the Nichols Ranch Project of $4.48 million, the decrease in the market price of vanadium recovered from Pond Return of $8.62 million and the decrease in the market price of vanadium in the La Sal stockpile of $1.25 million. For the year ended December 31, 2018, the Company recognized $4.58 million in inventory impairment due to continued lower uranium prices versus our cost to produce at the Nichols Ranch Project. Included in impairment were depreciation expenses of $2.05 million.

Interest Expense and Other Income and Expenses

Interest Expense

Interest expense for the year ended December 31, 2019 was $1.49 million compared with $1.72 million in the prior year due to lower principal amounts from the repayment of Wyoming revenue bond loan and the put option conversion of the Convertible Debentures.

Other income and expense

For the year ended December 31, 2019, other income and expense totaled $3.98 million income, net. These amounts primarily consist of a gain on the change in the mark-to-market values of the Convertible Debentures of $0.29 million, a gain on the decrease in value of warrant liabilities of $3.73 million, and interest income of $0.48 million, offset by $0.15 million loss in investments accounted for at fair value and other of $0.32 million.

For the year ended December 31, 2018, other income and expense totaled $2.33 million expense, net. These amounts consist of a loss for the change in fair value of derivative liabilities of $3.47 million and a loss in the mark-to-market values of the Company's Convertible Debentures of $0.61 million, partially offset by interest income of $0.34 million, sales of surplus assets of $0.29 million, gain of assets held for sale of $0.34 million and a $0.77 million increase in the value of investments accounted for at fair value.

LIQUIDITY AND CAPITAL RESOURCES

Funding of major business and property acquisitions

Over the past eight years the Company has funded major business and property acquisitions with capital provided by issuances of its Common Shares. In 2012, we acquired Titan Uranium Inc. and the U.S. Mining Division of Denison Mines Corp., in 2013 we acquired Strathmore Minerals Corp, in 2015 we acquired Uranerz and in 2016 we acquired Mesteña, each in exchange for newly issued shares.

We intend to continue to acquire assets utilizing Common Shares when we can do so under attractive terms.

Shares issued for cash

On December 23, 2016, the Company filed a prospectus supplement in both Canada and the United States to its Canadian base shelf prospectus and U.S. registration statement on Form S-3, which enabled the Company, at its discretion from time to time, to sell up to $20 million worth of Common Shares by way of an “at-the-market” offering (the “ATM”). On December 29, 2017, the Company filed a prospectus supplement to its U.S. registration statement, qualifying for distribution up to $30.00 million in additional Common Shares under the ATM. On November 5, 2018, the Company filed a prospectus supplement to its U.S. registration statement, qualifying for distribution up to $24.50 million in aggregate Common Shares under the ATM. Then, on the same date, the Company filed a base shelf prospectus whereby the Company may sell any combination of the “Securities” as defined thereunder in one or more offerings up to an initial aggregate offering amount of $150.00 million. On May 5, 2019, the prospectus supplement to its U.S. registration statement expired, and was replaced on May 7, 2019 by a new prospectus supplement in the same amount, qualifying for distribution up to $24.50 million in aggregate Common Shares under the ATM. On December 31, 2019, the Company filed a prospectus supplement to its U.S. registration statement, qualifying for distribution up to $30.00 million in additional Common Shares under the ATM. On December 31, 2020, the Company filed a prospectus supplement to its U.S. registration statement, qualifying for distribution up to $35.00 million in additional Common Shares under the ATM.

On February 20, 2020, the Company closed a bought deal public offering of common shares made pursuant to an underwriting agreement dated February 13, 2020 between the Company and a syndicate of underwriters led by Cantor Fitzgerald & Co. as lead underwriter and sole book-runner, and H.C. Wainwright & Co., LLC, Eight Capital, Haywood Securities Inc. and Roth Capital Partners, LLC (the "Offering"). Pursuant to the Offering, the Company issued an aggregate of 11,300,000 common

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shares at a price of $1.47 per share for gross proceeds of $16.61 million. The Company received net proceeds, after commissions and fees, of $15.14 million from the Offering (see “Note 12 to the Financial Statements: Capital Stock”).

From January 1, 2021 through March 18, 2021, the Company issued 5.50 million Common Shares at a weighted-average price of $5.53 for net proceeds of $29.70 million using the ATM.

Working capital at December 31, 2020 and future requirements for funds

At December 31, 2020, the Company had working capital of $40.16 million, including $20.17 million in cash, $2.25 million of marketable securities, approximately 690,700 pounds of uranium finished goods inventory and approximately 1,672,000 pounds of vanadium finished goods inventory. The Company believes it has sufficient cash and resources to carry out its business plan for at least the next twelve months.

The Company is actively focused on its forward-looking liquidity needs, especially in light of the current depressed uranium markets. The Company is evaluating its ongoing fixed cost structure as well as decisions related to project retention, advancement and development. If current uranium prices persist for any extended period of time, the Company will likely be required to raise capital or take other measures to fund its ongoing operations. Significant development activities, if warranted, will require that we arrange for financing in advance of planned expenditures. In addition, we expect to continue to augment our current financial resources with external financing as our long-term business needs require. We cannot provide any assurance that we will pursue any of these transactions or that we will be successful in completing them on acceptable terms or at all.

The Company manages liquidity risk through the management of its working capital and its capital structure.

Cash and cash flows

Year ended December 31, 2020

Cash, cash equivalents and restricted cash were $40.99 million at December 31, 2020, compared to $32.89 million at December 31, 2019. The increase of $8.09 million was due primarily to cash provided by financing activities of $36.58 million, cash provided by investing activities of $3.58 million, offset by cash used in operating activities of $32.18 million and loss on foreign exchange on cash held in foreign currencies of $0.11 million.

Net cash used in operating activities of $32.18 million is comprised of the net loss of $27.87 million for the period adjusted for non-cash items and for changes in working capital items. Significant items not involving cash were $2.70 million of depreciation and amortization of property, plant and equipment, $1.64 million impairment on inventory, share-based compensation expense of $2.60 million, a $5.44 million change in warrant liabilities, accretion of asset retirement obligation (“ARO”) of $1.91 million, offset by a revision of ARO of $7.85 million, unrealized foreign exchange gain of $1.05 million, other non-cash expenses of $0.71 million and a $0.16 million change in value of the Convertible Debentures. Other items include an increase in inventories of $6.10 million and a decrease in accounts payable and accrued liabilities of $3.08 million, partially offset by a decrease in trade and other receivables of $0.19 million and a decrease in prepaid expenses and other assets of $0.15 million.

Net cash provided by investing activities was $3.58 million comprised of $4.21 million cash received from maturities of marketable securities partially offset by $0.63 million cash used for the purchase of mineral properties and property, plant and equipment.

Net cash provided by financing activities totaled $36.58 million consisting of $52.39 million net proceeds from the issuance of Common Shares from a public offering and the issuance of shares under the Company's ATM facility, $0.49 million cash received from exercise of stock options, and $0.13 million cash received from non-controlling interest, partially offset by $16.02 million to repay loans and borrowings and $0.42 million cash paid to fund employee income tax withholding due upon vesting of restricted stock units.

Year ended December 31, 2019

Cash, cash equivalents and restricted cash were $32.89 million at December 31, 2019, compared to $34.29 million at December 31, 2018. The decrease of $1.40 million was due primarily to cash provided by financing activities of $20.36 million, cash provided by investing activities of $22.58 million, offset by cash used in operating activities of $44.38 million and loss on foreign exchange on cash held in foreign currencies of $0.04 million.

Net cash used in operating activities of $44.38 million is comprised of the net loss of $38.09 million for the period adjusted for non-cash items and for changes in working capital items. Significant items not involving cash were $1.21 million of depreciation and amortization of property, plant and equipment, $14.35 million impairment on inventory, share-based compensation expense of $3.77 million, accretion of asset retirement obligation of $1.93 million, other non-cash expenses of

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$2.31 million, unrealized foreign exchange loss of $0.08 million, a decrease in prepaid expenses and other assets of $0.01 million, offset by an increase in inventories of $18.53 million, a decrease in trade and other receivables of $0.06 million, a decrease in accounts payable and accrued liabilities of $3.20 million, $3.73 million change in warrant liabilities, $0.29 million change in value of the Convertible Debentures, non-cash standby costs of $1.42 million and changes in deferred revenue of $2.72 million.

Net cash provided by investing activities was $22.58 million related to cash received from the sale and maturities of marketable securities.

Net cash provided by financing activities totaled $20.36 million consisting of $19.68 million proceeds from the issuance of stock using the Company’s ATM offering, $0.80 million in proceeds from notes payable and $0.15 million cash received from exercise of stock options, partially offset by $0.32 million to repay loans and borrowings.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements required to be disclosed in this annual report on Form 10-K.

Contractual Obligations

The following table summarizes our contractual obligations as of December 31, 2020.

Payments Due by Period - $000

Less than 1 More than

Total year 1 - 3 years 3 - 5 years 5 years

Operating lease obligations $ 841 $ 343 $ 498 $ — $ —

In addition, the Company entered into commitments with federal and state agencies and private individuals to lease surface and mineral rights. These leases are renewable annually and are expected to total $1.51 million for the year ended December 31, 2021.

Critical accounting estimates and judgments

The preparation of these consolidated financial statements in accordance with U.S. GAAP requires the use of certain critical accounting estimates and judgments that affect the amounts reported. It also requires management to exercise judgment in applying the Company’s accounting policies. These judgments and estimates are based on management’s best knowledge of the relevant facts and circumstances taking into account previous experience. Although the Company regularly reviews the estimates and judgments made that affect these financial statements, actual results may be materially different.

Significant estimates made by management include:

a. Exploration Stage

SEC Industry Guide 7 defines a reserve as “that part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination.” The classification of a reserve must be evidenced by a bankable feasibility study using the latest three-year price average. While the Company has established the existence of mineral resources and has successfully extracted and recovered saleable uranium from certain of these resources, the Company has not established proven or probable reserves, as defined under SEC Industry Guide 7, for these operations or any of its uranium projects. As a result, the Company is in the Exploration Stage as defined under Industry Guide 7. Furthermore, the Company has no plans to establish proven or probable reserves for any of its uranium projects.

While in the Exploration Stage, among other things, the Company must expense all amounts that would normally be capitalized and subsequently depreciated or depleted over the life of the mining operation on properties that have proven or probable reserves. Items such as the construction of wellfields and related header houses, additions to our recovery facilities and advancement of properties will all be expensed in the period incurred. As a result, the Company’s consolidated financial statements may not be directly comparable to the financial statements of mining companies in the development or production stages.

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b. Resource estimates utilized

The Company utilizes estimates of its mineral resources based on information compiled by appropriately qualified persons. The information relating to the geological data on the size, depth and shape of the deposits requires complex geological judgments to interpret the data. The estimation of future cash flows related to resources is based upon factors such as estimates of future uranium prices, future construction and operating costs along with geological assumptions and judgments made in estimating the size and grade of the resource. Changes in the mineral resource estimates may impact the carrying value of mining and recovery assets, goodwill, reclamation and remediation obligations and depreciation and impairment.

c. Depreciation of mining and recovery assets acquired

For mining and recovery assets actively extracting and recovering uranium we depreciate the acquisition costs of the mining and recovery assets on a straight-line basis over our estimated lives of the mining and recovery assets. The process of estimating the useful life of the mining and recovery assets requires significant judgment in evaluating and assessing available geological, geophysical, engineering and economic data, projected rates of extraction and recovery, estimated commodity price forecasts and the timing of future expenditures, all of which are, by their very nature, subject to interpretation and uncertainty.

Changes in these estimates may materially impact the carrying value of the Company’s mining and recovery assets and the recorded amount of depreciation.

d. Impairment testing of mining and recovery assets

The Company undertakes a review of the carrying values of its mining and recovery assets whenever events or changes in circumstances indicate that their carrying values may exceed their estimated net recoverable amounts determined by reference to estimated future operating results and net cash flows. An impairment loss is recognized when the carrying value of a mining or recovery asset is not recoverable based on this analysis. In undertaking this review, the management of the Company is required to make significant estimates of, among other things, future production and sale volumes, forecast commodity prices, future operating and capital costs and reclamation costs to the end of the mining asset’s life. These estimates are subject to various risks and uncertainties, which may ultimately have an impact on the expected recoverability of the carrying values of mining and recovery assets.

e. Asset retirement obligations

Asset retirement obligations are recorded as a liability when an asset that will require reclamation and remediation is initially acquired. For disturbances created on a property owned that will require future reclamation and remediation the Company records asset retirement obligations for such disturbance when occurred. The Company has accrued its best estimate of its share of the cost to decommission its mining and milling properties in accordance with existing laws, contracts and other policies. The estimate of future costs involves a number of estimates relating to timing, type of costs, mine closure plans, and review of potential methods and technical advancements. Furthermore, due to uncertainties concerning environmental remediation, the ultimate cost of the Company’s decommissioning liability could differ from amounts provided. The estimate of the Company’s obligation is subject to change due to amendments to applicable laws and regulations and as new information concerning the Company’s operations becomes available. The Company is not able to determine the impact on its financial position, if any, of environmental laws and regulations that may be enacted in the future. Additionally, the expected cash flows in the future are discounted at the Company’s estimated cost of capital based on the periods the Company expects to complete the reclamation and remediation activities. Differences in the expected periods of reclamation or in the discount rates used could have a material difference in the actual settlement of the obligations compared with the amounts provided.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to risks associated with commodity prices, interest rates and credit. Commodity price risk is defined as the potential loss that we may incur as a result of changes in the market value of uranium. Interest rate risk results from our debt and equity instruments that we issue to provide financing and liquidity for our business. Credit risk arises from the extension of credit throughout all aspects of our business. Industry-wide risks can also affect our general ability to finance exploration, and development of exploitable resources; such effects are not predictable or quantifiable. Market risk is the risk to the Company of adverse financial impact due to change in the fair value or future cash flows of financial instruments as a result of fluctuations in interest rates and foreign currency exchange rates.

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Commodity Price Risk

The Company is subject to market risk related to the market price of U3O8. All of the Company’s existing long-term contracts expired following the Company’s 2018 deliveries, and all uranium sales after 2018 will be required to be made at spot prices until the Company enters into new long-term contracts at satisfactory prices in the future. Future revenue will be affected by both spot and long-term U3O8 price fluctuations which are beyond our control, including: the demand for nuclear power; political and economic conditions; governmental legislation in uranium producing and consuming countries; and production levels and costs of production of other producing companies. The Company continuously monitors the market to determine its level of extraction and recovery of uranium in the future.

Interest Rate Risk

The Company is exposed to interest rate risk on its cash equivalents, deposits, and restricted cash. Our interest income is earned in United States dollars and is not subject to interest rate risk. The Company does not use derivatives to manage interest rate risk.

Currency Risk

The foreign exchange risk relates to the risk that the value of financial commitments, recognized assets or liabilities will fluctuate due to changes in foreign currency rates. The Company does not use any derivative instruments to reduce its exposure to fluctuations in foreign currency exchange rates. As the U.S. Dollar is the functional currency of our U.S. operations, the currency risk has been reduced. We maintain a nominal balance in foreign currency, resulting in a low currency risk relative to our cash balances.

The following table summarizes, in United States dollar equivalents, the Company’s major foreign currency (Cdn$) exposures as of December 31, 2020 ($000):

Cash and cash equivalents $ 4,198

Accounts payable and accrued liabilities (426)

The table below summarizes a sensitivity analysis for significant unsettled currency risk exposure with respect to our financial instruments as of December 31, 2020 with all other variables held constant. It shows how net income would have been affected by changes in the relevant risk variables that were reasonably possible at that date ($000).

Change forSensitivity Analysis Increase (Decrease) in Other Comprehensive Income

+1% change in

Strengthening net earnings U.S. dollar $ 48

-1% change in

Weakening net earnings U.S. dollar $ (48)

Credit Risk

Credit risk relates to cash and cash equivalents, trade, and other receivables that arise from the possibility that any counterparty to an instrument fails to perform. The Company only transacts with highly-rated counterparties and a limit on contingent exposure has been established for any counterparty based on that counterparty’s credit rating. The Company’s sales are attributable mainly to large utilities. As of December 31, 2020, the Company’s maximum exposure to credit risk was the carrying value of cash and cash equivalents and trade receivables.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ENERGY FUELS INC.

CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2020

Contents

Report of Independent Registered Public Accounting Firm 152

Financial Statements:

Notes to the Consolidated Financial Statements 160

151

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

Energy Fuels Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Energy Fuels Inc. and subsidiaries (the Company) as of December 31, 2020 and 2019, the related consolidated statements of operations and comprehensive loss, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2020, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2020, in conformity with U.S. generally accepted accounting principles.

Change in Accounting Principle

As discussed in Note 3 to the consolidated financial statements, the Company has changed its method of accounting for leases as of January 1, 2019 due to the adoption of Accounting Standards Update 2016-12, Leases(Topic 842).

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financialreporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of asset retirement obligation costs

As discussed in Note 10 to the consolidated financial statements, the Company recorded an asset retirement obligation (ARO) liability of $13.0 million as of December 31, 2020. The ARO includes estimates of future costs to decommission its White Mesa Mill (Mill) and Pinyon Plain Mine (Pinyon). The estimate of future

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costs involves a number of estimates relating to timing, planned decommissioning activities, and review of potential methods and technical advancements.

We identified the evaluation of the future costs for decommissioning activities relating to the Mill and Pinyon as a critical audit matter. Specialized skills and knowledge were required to evaluate the Company’s determination of decommissioning activities and their related costs to satisfy the ARO. In addition, the ARO was sensitive to minor changes to significant assumptions, such as the timing, and types of costs.

The following are the primary procedures we performed to address this critical audit matter. We tested the determination of the planned decommissioning activities used in the estimate by inquiring of management, inspecting minutes of the board of directors, and reviewing supporting documentation, including management’s plan for mining. We involved environmental professionals with specialized skills and knowledge who assisted in:

•assessing the Company’s internal specialist’s objectivity andexpertise,

•evaluating the Company’s planned decommissioning activities by analyzing the internal specialist’s supportingdocumentation.

•evaluating costs used and comparing the planned decommissioning activities to supporting documentation, such as permits obtained which specify the Company’s decommissioning obligations, and reports to state regulators on decommissioningactivities.

We evaluated the Company’s ability to accurately estimate decommissioning costs by comparing the Company’s prior year estimate to the updated estimate of future costs. We evaluated the Company’s changes in assumptions for the timing and costs used in the prior year, by assessing operational changes that could impact the estimate.

/s/ KPMG LLP

We have served as the Company’s auditor since 2017.

Denver, Colorado

March 19, 2021

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ENERGY FUELS INC.

Consolidated Statements of Operations and Comprehensive Loss

(Expressed in thousands of U.S. dollars, except per share amounts)

Years ended December 31,

Revenues

Uranium concentrates $ — $ 66 $ 30,789

Vanadium concentrates — 2,237 —

Alternate feed materials processing and other 1,658 3,562 932

Costs and expenses applicable to revenues

Costs and expenses applicable to uranium concentrates — 63 14,752

Costs and expenses applicable to vanadium concentrates — 1,805 —

Costs and expenses applicable to alternate feed materials and other — 2,079 —

Total costs and expenses applicable to revenues — 3,947 14,752

Other operating costs

Intangible asset amortization — — 2,502

Items that may be reclassified in the future to profit and loss

Foreign currency translation adjustment (681) (854) 1,554

Other comprehensive income (loss) (681) (854) 1,554

Net loss attributable to:

Non-controlling interests (96) (116) (117)

Comprehensive loss attributable to:

Non-controlling interests (96) (116) (117)

Basic and diluted net loss per share $ (0.23) $ (0.40) $ (0.30)

See accompanying notes to the consolidated financial statements.

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ENERGY FUELS INC.

Consolidated Balance Sheets

(Expressed in thousands of U.S. dollars, except share amounts)

ASSETS

Current assets

Trade and other receivables, net 1,169 1,254

Prepaid expenses and other assets 1,313 1,462

Operating lease right of use asset 662 922

Investments accounted for at fair value 779 654

LIABILITIES & EQUITY

Current liabilities

Accounts payable and accrued liabilities $ 3,321 $ 5,438

Current portion of operating lease liability 289 288

Current portion of warrant liabilities 8,573 —

Current portion of asset retirement obligation 131 46

Current portion of loans and borrowings — 16,866

Warrant liabilities — 2,791

Operating lease liability 469 758

Equity

Accumulated other comprehensive income 2,308 2,989

Commitments and contingencies (Note 18)

See accompanying notes to the consolidated financial statements.

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ENERGY FUELS INC.

Consolidated Statements of Changes in Equity

(Expressed in thousands of U.S. dollars, except share amounts)

Shares Amount

Impact of change in accounting policy — — 2,474 — 2,474 — 2,474

Shares issued for the vesting of restricted stock units 899,192 — — — — — —

Shares issued for conversion of Convertible Debentures 2,409 8 — — 8 — 8

Other comprehensive loss — — — (854) (854) — (854)

Shares issued for the vesting of restricted stock units 850,150 — — — — — —

Shares issued for exercise of warrants 1,450 5 — — 5 — 5

Contributions attributable to non-controlling interest — — — — — 46 46

Other comprehensive loss — — — (681) (681) — (681)

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Shares issued for the vesting of restricted stock units 490,453 — — — — — —

Shares issued for exercise of warrants 200 1 — — 1 — 1

Contributions attributable to non-controlling interest — — — — — 133 133

See accompanying notes to the consolidated financial statements.

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ENERGY FUELS INC.

Consolidated Statements of Cash Flows

(Expressed in thousands of U.S. dollars)

Years ended December 31,

OPERATING ACTIVITIES

Items not involving cash:

Change in value of Convertible Debentures (156) (291) 612

Unrealized foreign exchange (gain) loss (1,045) 78 (218)

Revision of asset retirement obligation (7,845) (1,421) (662)

Acquisition of royalty interests, net of share issuance costs — — 3,622

Changes in assets and liabilities

(Increase) decrease in trade and other receivables 192 (63) (346)

(Increase) decrease in prepaid expenses and other assets 149 12 (631)

Decrease in accounts payable and accrued liabilities (3,084) (3,195) (613)

Changes in deferred revenue — (2,724) 2,724

Cash paid for reclamation and remediation activities — — (350)

INVESTING ACTIVITIES

Purchase of mineral properties and property, plant and equipment (627) — (107)

Purchases of marketable securities — — (25,554)

Cash received from sale of Reno Creek — — 2,940

Net cash provided by (used in) investing activities 3,581 22,575 (20,167)

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FINANCING ACTIVITIES

Issuance of common shares for cash, net of issuance costs 52,390 19,678 31,517

Proceeds from notes payable — 801 —

Cash received for notes receivable — — 500

Cash received from exercise of stock options 491 146 764

Cash received from exercise of warrants — 5 601

Cash received from non-controlling interest 133 46 —

Net change in cash, cash equivalents and restricted cash 8,094 (1,401) (6,409)

Non-cash investing and financing transactions:

Issuance of common shares to settle liabilities $ — $ 847 $ —

Issuance of common shares for consulting services 188 208 569

Supplemental disclosure of cash flow information:

Net cash paid during the period for:

Warrant liability transferred to equity upon exercise — 2 115

See accompanying notes to the consolidated financial statements.

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ENERGY FUELS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE YEARS ENDED DECEMBER 31, 2020

(Tabular amounts expressed in thousands of U.S. Dollars except share and per share amounts)

1. THE COMPANY AND DESCRIPTION OF BUSINESS

Energy Fuels Inc. was incorporated under the laws of the Province of Alberta and was continued under the Business Corporations Act (Ontario).

Energy Fuels Inc. and its subsidiary companies (collectively “the Company” or “EFI”) are engaged in uranium extraction, recovery and sales of uranium from mineral properties and the recycling of uranium bearing materials generated by third parties. As a part of these activities the Company also acquires, explores, evaluates and, if warranted, permits uranium properties. The Company’s final uranium product, uranium oxide concentrates (“U3O8” or “uranium concentrates”), is sold to customers for further processing into fuel for nuclear reactors. The Company also produces vanadium, along with uranium at its White Mesa Mill from certain of its Colorado Plateau properties, as market conditions warrant and from time to time from solutions in its Mill tailings impoundment system. The Company also expects to commence commercial production of rare earth element carbonate (“REEs”) at the White Mesa Mill in 2021.

The Company is an exploration stage mining company as defined by the United States (“U.S.”) Securities and Exchange Commission (“SEC”) Industry Guide 7 (“SEC Industry Guide 7”), as it has not established the existence of proven or probable reserves on any of its properties. Beginning with its annual report on Form 10-K for the year ended December 31, 2021, the Company will report its mineral holdings in accordance with the SEC’s Subpart 1300 of Regulation S-K.

Energy Fuels is engaged in conventional and in-situ (“ISR”) uranium extraction and recovery, along with the exploration, permitting and evaluation of uranium properties in the United States.

Mining activities

Mining activities consist of a stand-alone uranium recovery facility (the “White Mesa Mill”), conventional mining projects and two ISR mining projects (complete with two ISR recovery facilities on standby and two wellfields). The conventional projects are located at the Colorado Plateau, Henry Mountains, Arizona Strip, and Roca Honda Projects, all of which are in the vicinity of the White Mesa Mill, in addition to the Sheep Mountain Project located in Wyoming. ISR projects include the Nichols Ranch Project (which includes the Jane Dough Property and the Hank Satellite Plant) located in Wyoming and the Alta Mesa ISR Project (the “Alta Mesa Project”) located in Texas, both of which are on standby.

At December 31, 2020, other than evaluation work and infrastructure improvements and development at the Company’s Pinyon Plain Project, the conventional mining projects in the vicinity of the White Mesa Mill and Sheep Mountain are on standby, and are being evaluated for continued mining activities and/or are in the process of being permitted. The White Mesa Mill has completed its most recent vanadium campaign, continues to process third-party uranium-bearing mineralized materials from mining and recycling activities, such as the Mill’s alternate feed program, and continues to pursue its U.S.-based REE initiatives.

2. BASIS OF PRESENTATION

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and are presented in thousands of U.S. dollars (“USD”), except per share amounts. Certain footnote disclosures have share prices which are presented in Canadian dollars (“Cdn$”).

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of estimates

The Company’s consolidated financial statements have been prepared in accordance with U.S. GAAP. The preparation of the Company's consolidated financial statements requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. The more significant areas requiring the use of management estimates and assumptions relate to expectations of the future price of uranium and estimates of recoverable mineral resources that are the basis for future cash flow estimates utilized in assessing fair value for business combinations and impairment calculations; the determination of whether an acquisition represents a business combination or an asset acquisition;

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the use of management estimates and assumptions related to environmental, reclamation and closure obligations; marketable securities and derivative instruments; and share-based compensation expense. Actual results may differ significantly from these estimates.

Basis of consolidation

These consolidated financial statements include the accounts of the Company together with subsidiaries controlled by the Company. Inter-company transactions, balances and unrealized gains on transactions between the Company and its subsidiaries are eliminated. The functional currency of the Company’s operations is the USD.

Extracting and recovery activities while in the exploration stage

The Company extracts or recovers mineralized uranium from mining activities, mill tailings pond solutions, and alternate feed materials, resulting in saleable uranium concentrates from its White Mesa Mill and its Nichols Ranch Project. While the Company has established the existence of mineral resources and extracts and processes saleable uranium from these operations, the Company has not established proven or probable reserves, as defined under SEC Industry Guide 7, for these operations or any of its uranium projects. Furthermore, the Company has no current plans to establish proven or probable reserves for any of its uranium projects.

While in the exploration stage, the Company expenses most amounts that would normally be capitalized and subsequently depreciated or depleted over the life of the mining operation on properties that have proven or probable reserves. Items such as the construction of wellfields and related header houses, additions to recovery facilities and advancement of properties are expensed in the period incurred. As a result, the Company’s consolidated financial statements may not be directly comparable to the financial statements of mining companies in the development or production stages.

The White Mesa Mill, and certain conventional mining projects in the vicinity of the White Mesa Mill, and the Nichols Ranch Project (collectively the “Extracting and Recovery Operations”) were acquired in two unrelated business combinations. These Extracting and Recovery Operations were recorded at fair value on the date of the respective acquisition and included estimated values which included valuing these assets utilizing the Company’s estimate of future market prices of uranium and expected recoveries of uranium. The values determined included estimated cash flows associated with value beyond proven and probable reserves to develop, extract and recover the estimated saleable uranium concentrates from these operations.

The fair value of the Extracting and Recovery Operations recorded on the acquisition date is depreciated on a straight-line basis over the estimated useful life of the components of the operation since the Extracting and Recovery Operations do not have proven or probable reserves. Accordingly, all expenditures incurred subsequent to the acquisition dates relating to the preparation of properties for mineral extraction, expansion of or additions to the Extracting and Recovery Operations are expensed as incurred. This includes expenditures relating to activities such as preparing properties for mineral extraction, construction of mine wellfields, header houses and disposal wells, and additions to the recovery facilities are expensed as incurred as no proven or probable reserves have been established for these uranium projects.

Impairment of assets

The Company reviews and evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Mineral properties are monitored for impairment based on factors such as mineral prices, government regulation and taxation, the Company's continued right to explore the area, exploration reports, assays, technical reports, drill results and its continued plans to fund exploration programs on the property.

At each reporting date, the Company reviews its assets to determine whether there is any indication of impairment. If any such indication exists, the asset is tested for impairment. Impairment losses are recognized in profit or loss.

Recoverability is measured by comparing the undiscounted future net cash flows to the net book value. When the net book value exceeds future net undiscounted cash flows, the fair value is compared to the net book value and an impairment loss may be measured and recorded based on the excess of the net book value over fair value. Fair value for operating mines is determined using a combined approach, which uses a discounted cash flow model for the existing operations and non-operating properties with available cash flow models and a market approach for the fair value assessment of non-operating and exploration properties where no cash flow model is available. Future cash flows are estimated based on quantities of recoverable mineralized material, expected uranium prices (considering current and historical prices, trends and estimates), production levels, operating costs, capital requirements and reclamation costs, all based on life-of-mine plans. In estimating future cash flows, assets are grouped at the lowest level, for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. The Company's estimates of future cash flows are based on numerous assumptions, and it is possible that actual future cash flows will be significantly different than the estimates, as actual future

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quantities of recoverable minerals, uranium prices, production levels, costs and capital are each subject to significant risks and uncertainties.

Cash and cash equivalents

Cash and cash equivalents consist of all cash balances and highly liquid investments with an original maturity of three months or less. Because of the short maturity of these investments, the carrying amounts approximate their fair value. Restricted cash is excluded from cash and cash equivalents and is included in other current or long-term assets, depending on the nature of the restriction.

Marketable securities

Marketable debt securities consist of excess cash invested in U.S. government notes, U.S. government agencies and tradeable certificates of deposits. We have classified and accounted for our marketable debt securities as available-for-sale. After consideration of our risk versus reward objectives, as well as our liquidity requirements, we may sell these debt securities prior to their stated maturities. As we view these securities as available to support current operations, we classify highly liquid securities with maturities beyond 12 months as current assets under the caption marketable securities on the Consolidated Balance Sheet. Subsequent to initial recognition, they are measured at fair value and changes therein, are recognized as a component of other (loss) income in the Consolidated Statements of Operations.

Marketable equity securities consist of investments in publicly traded equity securities. We have classified and accounted for our marketable equity securities as available for sale. Subsequent to initial recognition, they are measured at fair value and changes therein are recognized as a component of other (loss) income in the Consolidated Statements of Operations.

Investments at fair value

The Company accounts for investments over which the Company exerts significant influence, but not control, over the financial and operating policies through the fair value option of ASC Topic 825 – Financial Instruments. The cost of such investments is measured at the fair value of the assets given up, shares issued, or liabilities assumed at the date of acquisition plus costs directly attributable to the acquisition. Subsequent to initial recognition, they are measured at fair value and changes therein, are recognized in earnings. At December 31, 2020 and 2019, this includes the Company's 16.5% investment in Virginia Uranium, Inc.

Unrealized gains and losses on transactions between the Company and its associates are eliminated to the extent of the Company’s interest in its associates.

Inventories

Expenditures related to the extraction and recovery of uranium concentrates and depreciation of the acquisition cost of the Extracting and Recovery Operations are inventoried as stockpiles and in-process and concentrate inventories.

Stockpiles are comprised of uranium or uranium/vanadium bearing materials that have been extracted from properties and are available for further processing. Extraction costs are added to the stockpile as incurred and removed from the stockpile based upon the average cost per ton of material extracted. The current portion of material in stockpiles represents the amount expected to be processed in the next twelve months.

In-process and concentrate inventories include the cost of the material processed from the stockpile, as well as production costs incurred to extract uranium-bearing fluids from the wellfields, and all costs to recover the uranium into concentrates or process through the White Mesa Mill. Finished uranium concentrate inventories also include costs of any finished product purchased from the market. Recovery costs typically include labor, chemical reagents and directly attributable mill and plant overhead expenditures.

Materials and other supplies held for use in the recovery of uranium and vanadium concentrates are added to the costs of inventories when consumed in the uranium extraction process.

Inventories are valued at the lower of average cost or net realizable value.

Property, plant and equipment

a. Recognition and measurement

Property, plant and equipment are measured at cost less accumulated depreciation, and any accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, when it is replaced, and the cost of the replacement asset is expensed.

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b. Depreciation and amortization

Depreciation and amortization are calculated on a straight-line basis to their estimated residual value over an estimated useful life which ranges from 3 to 15 years depending upon the asset type. When assets are retired or sold, the resulting gains or losses are reflected in current earnings as a component of other income or expense. Residual values, method of depreciation and useful lives of the assets are reviewed at least annually and adjusted if appropriate.

Where straight-line depreciation is utilized, the range of useful lives for various asset classes is generally as follows:

Buildings 12 - 15 years

Shop tools and equipment 3 - 5 years

Mining equipment 5 years

Office equipment 4 - 5 years

Furniture and fixtures 5 - 7 years

Light trucks and utility vehicles 5 years

The amortization method, residual values, and useful lives of property, plant and equipment are reviewed annually, and any change in estimate is applied prospectively.

Intangible assets

Sales contracts acquired in a business combination are recognized initially at fair value at the acquisition date. The Company’s intangible assets are recorded at cost less accumulated amortization.

Amortization is recorded as the Company sells inventory under its long-term sales contracts based on units sold and is recognized in the Consolidated Statement of Operations.

Non-operating assets

Non-operating assets consist of mineral properties and rights, along with data and analyses related to the properties, which are in various stages of evaluation and permitting. Costs to acquire the non-operating assets are capitalized at cost or fair value if such assets were a part of a business combination.

Mining activities for non-operating assets involve the search for minerals, the determination of technical feasibility and the assessment of commercial viability of an identified resource. Expenditures incurred in relation to such mining activities include costs which are directly attributable to researching and analyzing existing exploration data; conducting geological studies, exploratory drilling and sampling; examining and testing extraction and treatment methods; and completing pre-feasibility and feasibility studies. Such expenditures are expensed as incurred.

Mineral properties, that are not held for production, and any related surface access to the minerals generally require periodic payments and/or certain expenditures related to the property in order for the Company to retain its interest in the mineral property (collectively, “Holding Costs”). The Company expenses all Holding Costs in the period they are incurred.

Stand-by properties

Stand-by properties are mineral properties that have extracted mineral resources in the past but are currently non-operating or properties which could extract mineral resources in the future. Expenditures related to these properties are primarily related to maintaining the assets and permits in a condition that will allow re-start of the operations or development given appropriate commodity prices. All costs related to stand-by assets are expensed as incurred.

The White Mesa Mill operates on a campaign basis. When the White Mesa Mill is not recovering material, all related costs are expensed as incurred.

Asset retirement obligations

The Company’s asset retirement obligations (“ARO”) relates to expected mine, wellfield, plant and mill reclamation and closure activities, as well as costs associated with reclamation of exploration drilling. The Company’s activities are subject to numerous governmental laws and regulations. Estimates of future reclamation liabilities for ARO are recognized in the period when such liabilities are incurred. These estimates are updated on a periodic basis and are subject to changing laws, regulatory requirements, changing technology and other factors which will be recognized when appropriate. Liabilities related to site restoration include long-term treatment and monitoring costs and incorporate total expected costs net of recoveries.

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Expenditures incurred to dismantle facilities, restore and monitor closed resource properties are charged against the related ARO.

As the Company has no proven or probable reserves, such costs, discounted to their present value, are expensed as soon as the obligation to incur such costs arises. The present value of AROs is measured by discounting the expected cash flows using a discount factor that reflects the credit-adjusted risk-free rate of interest, while taking into account an inflation rate. The decommissioning liability is accreted to full value over time through periodic accretion charges recorded to operations as accretion expense. The Company adjusts the estimate of the ARO for changes in the amount or timing of underlying future cash outflows. The impact of these adjustments to the ARO amounts are expensed as incurred.

Loans and borrowings

The Company's Convertible Debentures are recognized at fair value through the fair value option based on the closing price on the TSX and changes are recognized in earnings as a component of other income (expense). The Company’s interest-bearing loans and borrowings are measured at amortized cost using the effective interest method.

Warrant liabilities

The Company issued several tranches of warrants for various equity transactions in 2016. The Company accounts for its warrants issued in accordance with the U.S. GAAP accounting guidance under FASB ASC Topic 815 Derivative and Hedging (“ASC 815”) which requires instruments within its scope to be recorded on the balance sheet as either an asset or liability measured at its fair value, with changes in fair value recognized in earnings. In accordance with ASC 815, the Company has classified the warrants as liabilities. The warrants are subject to re-measurement at each balance sheet date, with any change in fair value recognized as a component of other income (expense), net in the statements of operations. The Company estimates the fair value of these warrants using market prices, if available, or the Black-Scholes option pricing model. The Black-Scholes option pricing model is based on the estimated market value of the underlying common stock at the measurement date, the remaining contractual term of the warrant, risk-free interest rates and expected dividends on, and expected volatility of the price of the underlying common stock.

Revenue

a. Sale of goods

Revenue from the sale of mineral concentrates is recognized when it is probable that the economic benefits will flow to the Company and delivery has occurred, title has transferred, the sales price and costs incurred with respect to the transaction can be measured reliably, and collectability is reasonably assured. For uranium concentrates, revenue is typically recognized when delivery is evidenced by book transfer at the applicable uranium storage facility. For vanadium concentrates, revenue is typically recognized when delivery is evidenced by book transfer at the applicable vanadium storage facility.

b. Rendering of services

Revenue from toll milling services is recognized as material is processed in accordance with the specifics of the applicable toll milling agreement. Revenue and unbilled accounts receivable are recorded as related costs are incurred using billing formulas included in the applicable toll milling agreement. Deferred revenues represent proceeds received from processing of toll materials where the Company has not delivered the material to the customer.

Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.

Share-based compensation

The Company records share-based compensation awards exchanged for employee services at fair value on the date of the grant and expenses the awards in the Consolidated Statement of Operations over the requisite employee service period. The fair value of stock options is determined using the Black-Scholes valuation model. The fair value of restricted stock units (“RSUs”) is based on the Energy Fuels’ stock price on the date of grant. The fair value of stock appreciation rights (“SARs”) with performance conditions is based on a Monte Carlo simulation performed by a third-party valuation firm. Share-based compensation expense related to awards with only service conditions has a graded vesting schedule which are recorded on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in substance, multiple awards, while all other awards are recognized on a straight-line basis. The Company’s estimates may be impacted by certain variables including, but not limited to, stock price volatility, employee stock option exercise behaviors, additional stock option grants, estimates of forfeitures, the Company's performance, and related tax impacts.

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Foreign currency

Transactions in foreign currencies are translated to the respective functional currency of the Company’s subsidiaries and joint ventures at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated to the functional currency at the exchange rate as of the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated to the functional currency at the exchange rate when the fair value was determined. Foreign currency differences are generally recognized in profit or loss. Non-monetary items that are measured based on historical cost in a foreign currency are not translated.

The assets and liabilities of entities whose functional currency is not the U.S. dollar are translated into the U.S. dollar at the exchange rate as of the reporting date. The income and expenses of such entities are translated into the U.S. dollar using average exchange rates for the reporting period. Exchange differences on foreign currency translations are recorded in other comprehensive income (loss). The Company’s functional currency is the U.S. dollar.

Income taxes

The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred income tax assets and liabilities are recorded based on differences between the financial statement carrying values of existing assets and liabilities and their respective income tax bases (temporary differences), and losses carried forward. Deferred income tax assets and liabilities are measured using the enacted tax rates which will be in effect when the temporary differences are likely to reverse. The effect on deferred income tax assets and liabilities of a change in tax rates is included in operations in the period in which the change is enacted.

The Company records a valuation allowance to reduce deferred income tax assets to the amount that is believed more likely than not to be realized. When the Company concludes that all or part of the deferred income tax assets are not realizable in the future, the Company makes an adjustment to the valuation allowance that is charged to income tax expense in the period such determination is made.

Net loss per share

The Company presents basic and diluted loss per share data for its Common Shares, calculated by dividing the loss attributable to common shareholders of the Company by the weighted average number of Common Shares outstanding during the period. Diluted loss per share is determined by adjusting the loss attributable to common shareholders and the weighted average number of Common Shares outstanding for the effects of all potential dilutive instruments.

Recently Adopted Accounting Pronouncements

Leases

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842).” ASU 2016-02 requires leases to be recognized as assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. Under the new requirements, a lessee will recognize in the balance sheet a liability to make lease payments (the lease liability) and the right-of-use asset representing the right to the underlying asset for the lease term. For leases with a term of twelve months or less, the lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from the previous U.S. GAAP.

The Company adopted the standard as amended effective January 1, 2019 using the modified retrospective transition approach. Upon adoption, the Company recognized right-of-use assets of $1.14 million and lease liabilities of $1.23 million at January 1, 2019. See Footnote 15 for further discussion.

Non-employee Share-Based Payment

In June 2018, the FASB issued ASU 2018-07, which more closely aligns the accounting for employee and non-employee share-based payments. This standard more closely aligns the accounting for non-employee share-based payment transactions to the guidance for awards to employees except for specific guidance on certain inputs to an option-pricing model and the attribution of cost. The Company adopted this standard effective January 1, 2019 and adoption did not have a significant impact on our net earnings.

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Fair Value Measurement

In August 2018, the FASB issued ASU 2018-13, which amended the fair value measurement guidance by removing and modifying certain disclosure requirements, while also adding new disclosure requirements. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty would be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments would be applied retrospectively to all periods presented upon their effective date. The Company adopted this pronouncement effective January 1, 2020.

Recently Issued Accounting Pronouncements Not Yet Adopted

Financial Instruments - Credit Losses

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326).” The new standard is effective for reporting periods beginning after December 15, 2022 (January 1, 2023 for the Company) for Smaller Reporting Companies. The standard replaces the incurred loss impairment methodology under current U.S. GAAP with a methodology that reflects expected credit losses and requires the use of a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments. The standard requires a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company is currently evaluating the impact the adoption of ASU 2016-13 will have on its consolidated financial statements.

Income Taxes - Simplifying the Accounting for Income Taxes

In December 2019, the FASB issued ASU 2019-12, “Income Taxes - Simplifying the Accounting for Income Taxes (Topic 740),” which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 will be effective for interim and annual periods beginning after December 15, 2020 (January 1, 2021 for the Company). Early adoption is permitted. The Company has evaluated the impact the of the adoption of ASU 2019-12 and does not anticipate that it will have an impact on its consolidated financial statements.

4. MARKETABLE SECURITIES

The following tables summarize our marketable securities by significant investment categories as of December 31, 2020:

Cost Basis Gross Unrealized Losses Gross Unrealized Gains Fair Value

Marketable debt securities $ — $ — $ — $ —

The following tables summarize our marketable securities by significant investment categories as of December 31, 2019:

Cost Basis Gross Unrealized Losses Gross Unrealized Gains Fair Value

(1)Marketable debt securities are comprised primarily of U.S. government notes, and also includes U.S. government agencies, and tradeable certificates of deposits.

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5. RECEIVABLES

Trade receivables - other $ 826 $ 911

During the year ended December 31, 2014, the Company received two notes with a combined principal totaling $1.05 million due in 2018 in connection with the sale of certain assets previously recorded as held for sale. The note with principal totaling $0.50 million was collected during the year ended December 31, 2018. Alternatively, the note with a principal payment of $0.55 million due November 7, 2018 was not paid and the Company notified the issuing party (“Default Party”) of its default on November 9, 2018. The Company has a reserve of $0.22 million as of December 31, 2020 (2019 - $0.22 million) against the collectability of this note. The promissory note is secured by all issued and outstanding stock and all of the assets sold to the default party.

6. INVENTORIES

Inventory of ore in stockpiles 241 241

Raw materials and consumables 2,912 2,823

Inventories - by duration

Long term - raw materials and consumables $ 1,346 $ 1,149

(1)For the year ended December 31, 2020, the Company recorded an impairment loss of $1.64 million in the Consolidated Statement of Operations related to concentrates and work in progress inventories (December 31, 2019 - $14.35 million).

7. INVESTMENTS ACCOUNTED FOR AT FAIR VALUE

Investments accounted for at fair value includes the Company’s 16.5% investment in Virginia Uranium, Inc. and were $0.78 million and $0.65 million at December 31, 2020 and 2019, respectively.

8. PROPERTY, PLANT AND EQUIPMENT AND MINERAL PROPERTIES

The following is a summary of property, plant and equipment:

Property, plant and equipment

The net book value for the Nichols Ranch Project includes the value beyond proven and probable reserves ascribed to the processing plant, the Nichols Ranch wellfields and the Jane Dough project upon acquisition.

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For the year ended December 31, 2020, the Company recorded $0.51 million (December 31, 2019 - $2.09 million) of depreciation expense related to Nichols Ranch, which is included in the capitalized costs to inventory on the Consolidated Balance Sheet.

The following is a summary of mineral properties:

Mineral properties

9. IMPAIRMENTS

Impairment of property, plant and equipment, mineral properties and mineral properties held for sale

The Company conducts a review of potential triggering events for all its mineral properties on a quarterly basis. When events or changes in circumstances indicate that the related carrying amounts may not be recoverable, the Company carries out a review and evaluation of its long-lived assets in accordance with its accounting policy. No impairment of property, plant and equipment, mineral properties and mineral properties held for sale recorded in the years ended December 31, 2020, 2019 and 2018.

10. ASSET RETIREMENT OBLIGATIONS AND RESTRICTED CASH

The following table summarizes the Company’s asset retirement obligations:

Asset retirement obligation, beginning of period $ 18,972 $ 19,104

Settlements — —

Asset retirement obligation, end of period $ 13,038 $ 18,972

Asset retirement obligation:

Asset retirement obligation, end of period $ 13,038 $ 18,972

The asset retirement obligations of the Company are subject to legal and regulatory requirements. Estimates of the costs of reclamation are reviewed periodically by the Company and the applicable regulatory authorities. The above provision represents the Company’s estimate of the present value of future reclamation costs, discounted using credit adjusted risk-free interest rates ranging from 9.5% to 11.5% and an inflation rate of 2.0%. The total undiscounted decommissioning liability at December 31, 2020 is $41.95 million (2019 - $41.75 million).

The downward revision of estimate of $7.85 million for the year ended December 31, 2020 includes net changes of $0.20 million related to changes in total estimated undiscounted cash flows, and $7.65 million for changes in the estimated timing of future reclamation activities expected to begin at a later date. These revisions were recognized in development, permitting, and land holding and standby costs on the Consolidated Statement of Operations.

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The following table summarizes the Company’s restricted cash:

Restricted cash, beginning of period $ 20,081 $ 19,652

Additional collateral posted 768 429

Refunds of collateral (32) —

The Company has cash, cash equivalents and fixed income securities as collateral for various bonds posted in favor of the applicable state regulatory agencies in Arizona, Colorado, New Mexico, Texas, Utah and Wyoming, and the U.S. Bureau of Land Management and U.S. Forest Service for estimated reclamation costs associated with the White Mesa Mill, Nichols Ranch, Alta Mesa and other mining properties. Cash equivalents are short-term highly liquid investments with original maturities of three months or less. The restricted cash will be released when the Company has reclaimed a mineral property or restructured the surety and collateral arrangements. See Note 18 for a discussion of the Company’s surety bond commitments.

11. LOANS AND BORROWINGS

The contractual terms of the Company’s interest-bearing loans and borrowings, which are recorded at amortized cost, and the Company’s Convertible Debentures which are recorded at fair value, are as follows.

Current portion of loans and borrowings:

Convertible Debentures $ — $ 16,382

Notes payable — 484

Total current loans and borrowings $ — $ 16,866

Terms and debt repayment schedule

Terms and conditions of outstanding loans were as follows:

On July 24, 2012, the Company completed a bought deal public offering of 22,000 floating-rate convertible unsecured subordinated debentures originally maturing June 30, 2017 (the “ConvertibleDebentures”) at a price of Cdn$1,000 per Convertible Debenture for gross proceeds of Cdn$21.55 million (the “Offering”). The Convertible Debentures are convertible into Common Shares at the option of the holder. Interest is paid in cash and in addition, unless an event of default has occurred and is continuing, the Company may elect, from time to time, subject to applicable regulatory approval, to satisfy its obligation to pay interest on the Convertible Debentures, on the date it is payable under the indenture: (i) in cash; (ii) by delivering sufficient Common Shares to the debenture trustee, for sale, to satisfy the interest obligations in accordance with the indenture in which event holders of the Convertible Debentures will be entitled to receive a cash payment equal to the proceeds of the sale of such Common Shares; or (iii) any combination of (i) and (ii).

On August 4, 2016, the Company, by a vote of the Debentureholders, extended the maturity date of the Convertible Debentures from June 30, 2017 to December 31, 2020, and reduced the conversion price of the Convertible Debentures from Cdn$15.00 to Cdn$4.15 per Common Share of the Company. In addition, a redemption provision was added that enables the Company, upon giving not less than 30 days’ notice to Debentureholders, to redeem the Convertible Debentures, for cash, in whole or in part at any time after June 30, 2019, but prior to maturity, at a price of 101% of the aggregate principal amount redeemed, plus accrued and unpaid interest (less any tax required by law to be deducted) on such Convertible Debentures up to but excluding the redemption date. A right (in favor of each Debentureholder) was also added to give the Debentureholders the option to require the Company to purchase, for cash, on the previous maturity date of June 30, 2017, up to 20% of the Convertible Debentures held by the Debentureholders at a price equal to 100% of the principal amount purchased plus accrued and unpaid interest (less

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any tax required by law to be deducted). In the three months ended June 30, 2017, Debentureholders elected to redeem Cdn$1.13 million ($0.87 million) under this right. No additional purchases are allowed under this right. In addition, certain other amendments were made to the Indenture, as required by the U.S. Trust Indenture Act of 1939, as amended, and with respect to the addition of a U.S. Trustee in compliance therewith, as well as to remove provisions of the Indenture that no longer apply, such as U.S. securities law restrictions.

The Convertible Debentures accrue interest, payable semi-annually in arrears on June 30 and December 31 of each year at a fluctuating rate of not less than 8.5% and not more than 13.5%, indexed to the simple average spot price of uranium as reported on the UxC Weekly Indicator Price. The Convertible Debentures may be redeemed in whole or part, at par plus accrued interest and unpaid interest by the Company between June 30, 2019 and December 31, 2020 subject to certain terms and conditions, provided the volume weighted average trading price of the Common Shares of the Company on the TSX during the 20 consecutive trading days ending five days preceding the date on which the notice of redemption is given is not less than 125% of the conversion price.

Upon redemption or at maturity, the Company will repay the indebtedness represented by the Convertible Debentures by paying to the debenture trustee in Canadian dollars an amount equal to the aggregate principal amount of the outstanding Convertible Debentures which are to be redeemed or which have matured, as applicable, together with accrued and unpaid interest thereon.

Subject to any required regulatory approval and provided no event of default has occurred and is continuing, the Company has the option to satisfy its obligation to repay the Cdn$1,000 principal amount of the Convertible Debentures, in whole or in part, due at redemption or maturity, upon at least 40 days’ and not more than 60 days’ prior notice, by delivering that number of Common Shares obtained by dividing the Cdn$1,000 principal amount of the Convertible Debentures maturing or to be redeemed as applicable, by 95% of the volume-weighted average trading price of the Common Shares on the TSX during the 20 consecutive trading days ending five trading days preceding the date fixed for redemption or the maturity date, as the case may be.

On July 14, 2020, the Company redeemed Cdn$10.43 million principal amount of the Cdn$20.86 million Convertible Debentures. The Convertible Debentures were redeemable for an amount equal to 101% of the aggregate principal amount plus accrued and unpaid interest thereon, up to but excluding July 14, 2020. On October 6, 2020, the Company redeemed the remaining Cdn$10.43 million principal amount of the Cdn$10.43 million Convertible Debentures then outstanding for approximately $7.82 million. The Convertible Debentures were redeemable for an amount equal to 101% of the aggregate principal amount plus accrued and unpaid interest thereon, up to but excluding October 6, 2020. As a result of the final redemption, no Convertible Debentures remain outstanding. The Convertible Debentures are no longer subject to the terms of the Indenture, and cease to be listed on the TSX.

The Company currently has no other remaining short- or long-term debt.

The Convertible Debentures are classified as fair value through profit or loss where the Convertible Debentures are measured at fair value based on the closing price on the TSX (a Level 1 measurement) and changes are recognized in earnings. For the year ended December 31, 2020, the Company recorded a gain on revaluation of Convertible Debentures of $0.16 million (December 31, 2019 – gain of $0.29 million (December 31, 2018 - loss of $0.61 million).

12. CAPITAL STOCK

Authorized capital stock

The Company is authorized to issue an unlimited number of Common Shares without par value, unlimited Preferred Shares issuable in series, and unlimited Series A Preferred Shares. The Series A Preferred Shares are non-redeemable, non-callable, non-voting and with no right to dividends. The Preferred Shares issuable in series will have the rights, privileges, restrictions and conditions assigned to the particular series upon the Board of Directors approving their issuance.

Issued capital stock

The significant transactions relating to capital stock issued during 2020, 2019, and 2018 are:

a)On February 20, 2020, the Company completed a bought deal public offering of 11.30 million Common Shares at a price of $1.47 per share. The Company received net proceeds, after commissions and fees, of $15.14 million.

b)In the year ended December 31, 2020, the Company issued 21,361,784 Common Shares under the Company’s ATM offering for net proceeds of $37.25 million. In the year ended December 31, 2019, the Company issued 8,043,365 Common Shares under the Company’s ATM offering for net proceeds of $19.68 million. In the year ended

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December 31, 2018, the Company issued 14,283,254 Common Shares under the Company’s ATM for net proceeds of $31.52 million.

Share Purchase Warrants

The following table summarizes the Company’s share purchase warrants denominated in U.S. dollars. These warrants are accounted for as derivative liabilities as the functional currency of the entity issuing the warrants, Energy Fuels Inc., is Canadian dollars.

(1)The warrants issued in September 2016 are classified as Level 1 under the fair value hierarchy (Note 20). Each warrant is exercisable until September 20, 2021 and entitles the holder thereof to acquire one common share upon exercise at an exercise price of $2.45 per common share. These warrants are accounted for as a derivative liability, as the functional currency of the entity issuing the warrant is Cdn$.

On March 14, 2019, 2,328,925 warrants issued in March 2016 expired un-exercised.

13. BASIC AND DILUTED LOSS PER COMMON SHARE

The following is a reconciliation of weighted average common shares outstanding for the years ended December 31, 2020, 2019, 2018, respectively:

Years ended December 31,

Effect of shares issued for exercise of share purchase warrants — 1,057 44,185

Effect of shares issued in asset acquisitions — — 419,986

Effect of shares issued for conversion of Convertible Debentures — — 323

Effect of shares issued to settle liabilities — 141,525 —

Basic and diluted loss per common share

The calculation of basic and diluted loss per share after adjustment for the effects of all potential dilutive Common Shares, calculated as follows:

Years ended December 31,

Net loss attributable to owners of the Company $ (27,776) $ (37,978) $ (25,245)

Net loss per common share $ (0.23) $ (0.40) $ (0.30)

For the three years ended December 31, 2020, 2019 and 2018, 5.78 million, 5.65 million and 8.23 million options and warrants, respectively, and the potential conversion of the Convertible Debentures have been excluded from the calculation as their effect would have been anti-dilutive.

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14. SHARE-BASED PAYMENTS

The Company, under the 2018 Amended and Restated Omnibus Equity Incentive Compensation Plan (the “Equity Incentive Plan”), maintains an equity incentive plan for directors, executives, eligible employees and consultants. Equity incentive awards include employee stock options, restricted stock units (“RSUs”) and stock appreciation rights (“SARs”). The Company issues new shares of common stock to satisfy exercises and vesting under all of its equity incentive awards. At December 31, 2020, a total of 13,431,103 Common Shares were authorized for equity incentive plan awards.

Employee Stock Options

The Company, under the Equity Incentive Plan, may grant options to directors, executives, employees and consultants to purchase Common Shares of the Company. The exercise price of the options is set as the higher of the Company’s closing share price on the day before the grant date or the five-day volume weighted average price (“VWAP”). Stock options granted under the Equity Incentive Plan generally vest over a period of two years or more and are generally exercisable over a period of five years from the grant date not to exceed 10 years. The value of each option award is estimated at the grant date using the Black-Scholes Option Valuation Model. There were 0.71 million options granted in the year ended December 31, 2020 (December 31, 2019 – 0.30 million, December 31, 2018 - 0.42 million). At December 31, 2020, there were 1.61 million options outstanding with 1.21 million options exercisable, at a weighted average exercise price of $2.91 and $3.23 respectively, with a weighted average remaining contractual life of 2.75 years and 2.44 years, respectively. The aggregate intrinsic value of the fully vested shares was $1.80 million.

The summary of the Company’s stock options at December 31, 2020, 2019 and 2018, respectively, and the changes for the fiscal periods ending on those dates are presented below:

Range of Exercise Prices Weighted AverageExercise Price Number ofOptions

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As of December 31, 2020, the outstanding stock options denominated in USD$ were as follows:

Options Outstanding Options Exercisable

In the year ended December 31, 2020, the Company issued 302,707 shares upon exercise of stock options at an average exercise price of $1.97 for proceeds of $0.49 million. These options had an intrinsic value of $0.42 million.

In the year ended December 31, 2019, the Company issued 54,805 shares upon exercise of stock options at an average exercise price of $2.27 for proceeds of $0.15 million. These options had an intrinsic value of $0.05 million.

In the year ended December 31, 2018, the Company issued 355,092 shares upon exercise of stock options at an average exercise price of $2.15 for proceeds of $0.76 million. These options had an intrinsic value of $0.41 million.

The share-based compensation recorded during the years ended December 31, 2020, 2019 and 2018 are as follows:

Years ended December 31,

(1)The fair value of the options granted under the Equity Incentive Plan for the years ended December 31, 2020, 2019 and 2018 was estimated at the date of grant, using the Black-Scholes Option Valuation Model, with the following weighted average assumptions:

Years ended December 31,

Expected life 4.6 years 5.0 years 5.0 years

Expected dividend yield 0 % 0 % 0 %

Weighted average grant date fair value $ 0.82 $ 1.54 $ 0.96

* Expected volatility is measured based on the Company’s historical share price volatility over a period equivalent to the expected life of the options.

(2)The fair value of the RSUs granted under the Equity Incentive Plan for the years ended December 31, 2020, 2019 and 2018, was estimated at the date of grant, using the stated market price.