Insider trading investigation opened into southern Utah uranium mill

SALT LAKE CITY — Congressional Democrats accused the owner of White Mesa Mill in southeastern Utah of insider trading. But the company denies any improper conduct.

The mill owned by Denver-based Energy Fuels is the last conventional uranium processing facility in the United States and is expanding to become one of the country's very few rare earth processing plants. It's located in San Juan County about 1 mile east of the former boundary of Bears Ears National Monument.

Five days before the Trump administration reduced the monument by more than a million acres — 91% of its prior area — Energy Fuels CEO Ross Bhappu bought 74,000 shares of company stock. The following day, board chairman Bruce Hansen bought an additional 4,000 shares. The acquisitions represent the largest inside stock purchases in the company's history.

Those facts are among several outlined in an Aug. 10 letter that Rep. Jared Huffman, D-Calif., the ranking member of the House Natural Resources Committee, and Rep. Maxine Dexter, D-Ore., the ranking member of the Subcommittee on Oversight and Investigations, sent to Bhappu informing him of the investigation.

The letter alleges that President Donald Trump's change to the monument's boundaries and the potential for uranium's presence in the region, "potentially strengthens Energy Fuels' strategic position in domestic uranium extraction and processing."

"The appearance of insider trading still exists," they wrote, "and the American people deserve transparency."

Energy Fuels said in a statement that it's taking the matter seriously, but that it is "unaware of any evidence supporting claims of wrongdoing in the referenced letter and strongly rejects any suggestion that the company or its executives engaged in any improper conduct."

Curtis Moore, Energy Fuels senior vice president of marketing and corporate development, pointed out, too, that the company is not focused on the monument.

"For our investors, our management, our execs — everybody — Bears Ears is immaterial to us at this point," he said.

What are the allegations?

The letter states that Energy Fuels has sufficient relationships with the Trump administration to have known of the upcoming executive order before it was public information.

In particular, it points out how the mining company employs a former Department of the Interior official as a lobbyist. It also referenced its strong government connections as a selling point for ongoing rare earth expansions. In addition, the company recently received a $725 million loan from the Department of Defense to process more rare earth minerals, which implies ample contacts within the federal government.

One of the lesser discussed parts of the executive order reducing the monument was that it removed protections and authority previously granted to tribes in the region, several of which have opposed the White Mesa Mill for decades. With fewer roadblocks from tribal sovereignty, the lawmakers suggested the days prior to the announcement were an advantageous time to invest.

However, Energy Fuels' stock price did not shoot up following the news. Rather it declined and has not yet fully rebounded. On May 6, it reached a yearly high of $23.52, but dropped to this year's low of $10.74 by July 29. That was more than two weeks after Bears Ears was reduced.

"It appears as though neither you nor Mr. Hansen have profited much from the purchase yet," the letter says. "Though not much money was gained in the short term from the investment, it is clear that Energy Fuels is hedging on long-term gains and focusing on a longer-term strategy as demonstrated by lobbying efforts dating back to 2017 and future expansion plans for White Mesa Mill."

When Bhappu purchased the 74,000 shares, his ownership stake increased by 41%. There's potential for that to pay out in the long term. However, at a time of stock volatility like this summer's price swing, inside corporate ownership buying stock is often considered a vote of confidence.

Regardless, Energy Fuels confirmed that all trades were done following the guidelines of the Securities and Exchange Commission. It included approvals from the company's legal compliance team and the filing of a form that details stock purchases with ownership implications.

Also, there is no public evidence of direct ownership of Energy Fuels by Trump, the Trump family or any other Cabinet level official.

Did Energy Fuels want Bears Ears reduced?

Energy Fuels twice asked the federal government to reduce Bears Ears National Monument, once in 2017 and again in 2021. The request was to push the boundary away from the White Mesa Mill border, which would result in the monument getting smaller by about 1.5%.

In its letter to the first Trump administration, Energy Fuels wrote that the original 1.35-million-acre monument "could affect existing and future mill operations" and that "there are also many other known uranium and vanadium deposits located within the (original boundaries) that could provide valuable energy and mineral resources in the future."

But the company statement said that is not the case now.

"The White Mesa Mill has never been located in the Bears Ears National Monument, Energy Fuels holds no properties, mining claims or economic interests in the monument, and we have not actively advocated for any changes to the monument with the current administration."

A company spokesperson wrote that those requests were made years ago and have since been abandoned. In light of decades-long efforts to close the mill, the company thought that creating a larger buffer between the monument and the mill would reduce tensions, according to the spokesperson. But, in time, the company found that the borders did not affect its operations.

But going back to 2017, Energy Fuels supported protections for Bears Ears. In a press release it wrote, "We would like to take this opportunity to reiterate our support for increased protection of areas in southeast Utah that contain unique scientific, environmental, and scenic resources, and our support for policies that allow Native Americans to manage and protect valuable cultural resources and religious sites."

"We are proud of our position on these critical land-use matters and of our support for BENM (Bears Ears National Monument). All of our operations and mineral properties fall outside of BENM as originally and currently designated," Mark Chalmers, president of Energy Fuels, said in a statement. "And, since we have no intention of mining or exploring anywhere within the originally designated BENM, we would support a proposed mineral withdrawal on all of this land."

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