---



Energy Fuels Inc.

****

Consolidated Financial Statements

For the 12 months ended December 31, 2014 and the 15
months ended December 31, 2013

---

| |                                                                                |                                                                       
| | ------------------------------------------------------------------------------ | ----------------------------------------------------------------------
| | KPMG LLPBay Adelaide
      Centre 333 Bay Street Suite 4600 Toronto ON M5H 2S5 | Telephone (416) 777-8500 Fax
      (416) 777-8818 Internet www.kpmg.ca

INDEPENDENT AUDITORS REPORT

To the Shareholders of Energy Fuels Inc.

We have audited the accompanying consolidated financial
statements of Energy Fuels Inc., which comprise the consolidated statements of
financial position as at December 31, 2014 and December 31, 2013, the
consolidated statements of comprehensive loss, shareholders equity and cash
flows for the year ended December 31, 2014 and the fifteen month period ended
December 31, 2013, and notes, comprising a summary of significant accounting
policies and other explanatory information.

Managements Responsibility for the Consolidated Financial
Statements

Management is responsible for the preparation and fair
presentation of these consolidated financial statements in accordance with
International Financial Reporting Standards as issued by the International
Accounting Standards Board, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or
error.

Auditors Responsibility

Our responsibility is to express an opinion on these
consolidated financial statements based on our audits. We conducted our audits
in accordance with Canadian generally accepted auditing standards. Those
standards require that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether the consolidated
financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on our judgment, including the
assessment of the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. In making those risk assessments, we
consider internal control relevant to the entitys preparation and fair
presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entitys internal control.An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made by management, as well
as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained in our
audits is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements present
fairly, in all material respects, the consolidated financial position of Energy
Fuels Inc. as at December 31, 2014 and December 31, 2013, and its consolidated
financial performance and its consolidated cash flows for the year ended
December 31, 2014 and the fifteen-month period ended December 31, 2013 in
accordance with International Financial Reporting Standards as issued by the
International Accounting Standards Board.



Chartered Professional Accountants, Licensed Public
AccountantsMarch 18, 2015 Toronto,Canada

KPMG LLP is
a Canadian limited liability partnership and a member firm of the KPMGnetwork of independent member firms
affiliated with KPMG International Cooperative(KPMG International), a Swiss entity.KPMG Canada provides services to
KPMG LLP.

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|ENERGY FUELS INC.                             
|----------------------------------------------
|Consolidated Statements of Financial Position 
|(Expressed in
      thousands of U.S. dollars)

|                                                            |   | December 31, 2014 |   |   | December 31, 2013 |  
|----------------------------------------------------------- | - | ----------------- | - | - | ----------------- | -
|ASSETS                                                      |   |                   |   |   |                   |  
|                                                            |   |                   |   |   |                   |  
|Current assets                                              |   |                   |   |   |                   |  
|Cash and cash
      equivalents                             | $ | 10,410            |   | $ | 6,628             |  
|Marketable securities (Note 5)                              |   | 284               |   |   | 409               |  
|Trade and other
      receivables (Note 6)                  |   | 600               |   |   | 653               |  
|Inventories (Note 7)                                        |   | 31,306            |   |   | 28,040            |  
|Prepaid expenses and
      other assets                     |   | 478               |   |   | 757               |  
|Assets held for sale (Note 8)                               |   | 1,953             |   |   | 4,415             |  
|                                                            |   | 45,031            |   |   | 40,902            |  
|Non-current                                                 |   |                   |   |   |                   |  
|Notes receivable (Note
      6)                             |   | 682               |   |   | -                 |  
|Inventories (Note 7)                                        |   | 2,245             |   |   | -                 |  
|Investment in Virginia
      Energy Resources Inc. (Note 9) |   | 380               |   |   | 1,012             |  
|Property, plant and equipment (Note 10)                     |   | 65,873            |   |   | 100,969           |  
|Intangible assets (Note
      12)                           |   | 3,882             |   |   | 7,772             |  
|Restricted cash (Note 13)                                   |   | 16,148            |   |   | 25,478            |  
|                                                            | $ | 134,241           |   | $ | 176,133           |  
|                                                            |   |                   |   |   |                   |  
|LIABILITIES &
      SHAREHOLDERS' EQUITY                    |   |                   |   |   |                   |  
|                                                            |   |                   |   |   |                   |  
|Current liabilities                                         |   |                   |   |   |                   |  
|Accounts payable and accrued
      liabilities              | $ | 4,743             |   | $ | 5,442             |  
|Deferred revenue                                            |   | 1,517             |   |   | 1,429             |  
|Current portion of long-term
      liabilities              |   |                   |   |   |                   |  
|Decommissioning liability (Note 13)                         |   | 121               |   |   | 172               |  
|Loans and borrowings (Note 14)                              |   | 46                |   |   | 378               |  
|                                                            |   | 6,427             |   |   | 7,421             |  
|Non-current                                                 |   |                   |   |   |                   |  
|Decommissioning
      liability (Note 13)                   |   | 15,170            |   |   | 13,627            |  
|Loans and borrowings (Note 14)                              |   | 15,786            |   |   | 17,952            |  
|                                                            |   | 37,383            |   |   | 39,000            |  
|                                                            |   |                   |   |   |                   |  
|Shareholders' equity                                        |   |                   |   |   |                   |  
|Capital stock (Note 16)                                     | $ | 232,835           |   | $ | 232,089           |  
|Contributed surplus
      (Note 16)                         |   | 22,568            |   |   | 21,182            |  
|Share purchase warrants (Note 16)                           |   | 4,714             |   |   | 4,838             |  
|Deficit                                                     |   | (163,978          | ) |   | (120,366          | )
|Accumulated other comprehensive income (loss)               |   | 719               |   |   | (610              | )
|                                                            |   | 96,858            |   |   | 137,133           |  
|                                                            | $ | 134,241           |   | $ | 176,133           |  

Commitments and contingencies (Note 21)Subsequent events
(Note 23)

Approved by the Board

(signed) Stephen P. Antony , Director

(signed) Larry Goldberg , Director

The accompanying notes are an integral part of these
consolidated financial statements.

2

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|ENERGY FUELS INC.                                                       
|------------------------------------------------------------------------
|Consolidated Statements of Comprehensive Loss                           
|(Expressed in
      thousands of U.S. dollars, except per share amounts)

|                                                                                            |   | 12 month     |   |   | 15 month     |  
|------------------------------------------------------------------------------------------- | - | ------------ | - | - | ------------ | -
|                                                                                            |   | period ended |   |   | period ended |  
|                                                                                            |   | December 31, |  
|                                                                                            |   | 2014         |   |   | 2013         |  
|                                                                                            |   |              |   |   |              |  
|                                                                                            |   |              |   |   |              |  
|REVENUES (Note 20)                                                                          | $ | 46,253       |   | $ | 73,248       |  
|                                                                                            |   |              |   |   |              |  
|COST OF SALES                                                                               |   |              |   |   |              |  
|Production cost of sales                                                                    |   | (27,209      | ) |   | (56,802      | )
|Depreciation, depletion and
      amortization                                              |   | (3,073       | ) |   | (7,710       | )
|Impairment of inventories                                                                   |   | -            |   |   | (3,269       | )
|                                                                                            |   |              |   |   |              |  
|TOTAL COST OF SALES                                                                         |   | (30,282      | ) |   | (67,781      | )
|                                                                                            |   |              |   |   |              |  
|GROSS PROFIT                                                                                |   | 15,971       |   |   | 5,467        |  
|                                                                                            |   |              |   |   |              |  
|Care and maintenance expenses
      (Note 20)                                               |   | (7,004       | ) |   | (5,402       | )
|Selling, general and administrative expenses
      (Note 20)                                |   | (15,511      | ) |   | (24,897      | )
|Finance income (expense)
      (Note 20)                                                    |   | (1,543       | ) |   | 960          |  
|Impairment of property, plant and equipment
      (Note 11)                                 |   | (35,856      | ) |   | (60,257      | )
|Impairment of Virginia Energy
      Resources (Note 9)                                      |   | (368         | ) |   | (1,941       | )
|Other income (expense) (Note 20)                                                            |   | 802          |   |   | (1,255       | )
|                                                                                            |   |              |   |   |              |  
|NET LOSS BEFORE TAXES                                                                       |   | (43,509      | ) |   | (87,325      | )
|                                                                                            |   |              |   |   |              |  
|Income tax expense (Note 19)                                                                |   | (103         | ) |   | -            |  
|                                                                                            |   |              |   |   |              |  
|NET LOSS FOR THE PERIOD                                                                     |   | (43,612      | ) |   | (87,325      | )
|                                                                                            |   |              |   |   |              |  
|ITEMS THAT MAY BE RECLASSIFIED TO PROFIT
      OR LOSS                                      |   |              |   |   |              |  
|Unrealized gain on
      available-for-sale assets                                          |   | 188          |   |   | -            |  
|Gains on available-for-sale financial
      assets reclassified to profit or loss (Note 5)  |   | (198         | ) |   | -            |  
|Share of other
      comprehensive income (loss) of Virginia Energy Resources Inc. (Note 9) |   | 71           |   |   | (38          | )
|Foreign currency translation adjustment                                                     |   | 1,268        |   |   | 381          |  
|                                                                                            |   |              |   |   |              |  
|TOTAL OTHER COMPREHENSIVE LOSS                                                              |   | 1,329        |   |   | 343          |  
|                                                                                            |   |              |   |   |              |  
|COMPREHENSIVE LOSS FOR THE PERIOD                                                           | $ | (42,283      | ) | $ | (86,982      | )
|                                                                                            |   |              |   |   |              |  
|BASIC AND DILUTED LOSS PER SHARE (Note 17)                                                  | $ | (2.22        | ) | $ | (5.61        | )

The accompanying notes are an integral part of these
consolidated financial statements.

3

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|ENERGY FUELS INC.                              
|-----------------------------------------------
|Consolidated Statements of Shareholders' Equity
|(Expressed in
      thousands of U.S. dollars) 

|                                                                                  |   | 12 month     |   |   | 15 month     |  
|--------------------------------------------------------------------------------- | - | ------------ | - | - | ------------ | -
|                                                                                  |   | period ended |   |   | period ended |  
|                                                                                  |   | December 31, |  
|                                                                                  |   | 2014         |   |   | 2013         |  
|                                                                                  |   |              |   |   |              |  
|Capital stock (Note 16)                                                           |   |              |   |   |              |  
|Balance, beginning of
      period                                                | $ | 232,089      |   | $ | 178,745      |  
|Shares issued for
      acquisition of interest in Virginia Energy                |   | -            |   |   | 3,947        |  
|Shares
      issued for public and private offerings                              |   | -            |   |   | 10,459       |  
|Shares issued for
      property acquisitions                                     |   | -            |   |   | 957          |  
|Shares
      issued for investor relations                                        |   | -            |   |   | 167          |  
|Shares issued for
      Strathmore Minerals Corp. asset purchase                  |   | -            |   |   | 38,634       |  
|Tax
      impact from expired share purchase warrants                             |   | -            |   |   | 266          |  
|Shares issued for
      exercise of share purchase warrants                       |   | 607          |   |   | -            |  
|Shares
      issued for exercise of options                                       |   | 139          |   |   | -            |  
|Issuance costs                                                                    |   | -            |   |   | (1,086       | )
|Balance, end of period                                                            |   | 232,835      |   |   | 232,089      |  
|                                                                                  |   |              |   |   |              |  
|Contributed surplus (Note
      16)                                               |   |              |   |   |              |  
|Balance, beginning of period                                                      |   | 21,182       |   |   | 17,906       |  
|Share
      purchase warrants expired                                             |   | -            |   |   | 2,004        |  
|Tax impact from expired
      share purchase warrants                             |   | -            |   |   | (266         | )
|Share-based compensation                                                          |   | 1,405        |   |   | 1,538        |  
|Stock options exercised
      (Note 18)                                           |   | (19          | ) |   | -            |  
|Balance, end of period                                                            |   | 22,568       |   |   | 21,182       |  
|                                                                                  |   |              |   |   |              |  
|Share purchase warrants
      (Note 16)                                           |   |              |   |   |              |  
|Balance, beginning of period                                                      |   | 4,838        |   |   | 6,002        |  
|Share
      purchase warrants expired                                             |   | -            |   |   | (2,004       | )
|Warrants issued for
      public and private offerings                            |   | -            |   |   | 898          |  
|Exercised
      share purchase warrants                                           |   | (124         | ) |   | -            |  
|Issuance costs                                                                    |   | -            |   |   | (58          | )
|Balance, end of period                                                            |   | 4,714        |   |   | 4,838        |  
|                                                                                  |   |              |   |   |              |  
|Deficit                                                                           |   |              |   |   |              |  
|Balance, beginning of period                                                      |   | (120,366     | ) |   | (33,041      | )
|Net loss
      for the period                                                     |   | (43,612      | ) |   | (87,325      | )
|Balance, end of period                                                            |   | (163,978     | ) |   | (120,366     | )
|                                                                                  |   |              |   |   |              |  
|Accumulated other comprehensive income
      (loss)                               |   |              |   |   |              |  
|Balance, beginning of
      period                                                |   | (610         | ) |   | (953         | )
|Unrealized gain on
      available-for-sale assets                                |   | 188          |   |   | -            |  
|Gains on
      available-for-sale financial assets reclassified to profit or loss |   | (198         | ) |   | -            |  
|Share of comprehensive
      loss of equity-accounted investees                   |   | 71           |   |   | (38          | )
|Foreign
      currency translation reserve                                        |   | 1,268        |   |   | 381          |  
|Balance, end of period                                                            |   | 719          |   |   | (610         | )
|                                                                                  |   |              |   |   |              |  
|Total shareholders' equity                                                        | $ | 96,858       |   | $ | 137,133      |  

The accompanying notes are an integral part of these
consolidated financial statements.

4

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|ENERGY FUELS INC.                             
|----------------------------------------------
|Consolidated Statements of Cash Flows         
|(Expressed in
      thousands of U.S. dollars)

|                                                                                                         |   | 12 month     |   |   | 15 month     |  
|-------------------------------------------------------------------------------------------------------- | - | ------------ | - | - | ------------ | -
|                                                                                                         |   | period ended |   |   | period ended |  
|                                                                                                         |   | December 31, |  
|                                                                                                         |   | 2014         |   |   | 2013         |  
|                                                                                                         |   |              |   |   |              |  
|OPERATING ACTIVITIES                                                                                     |   |              |   |   |              |  
|Net loss for the period                                                                                  | $ | (43,612      | ) | $ | (87,325      | )
|Items not involving cash:                                                                                |   |              |   |   |              |  
|Depletion, depreciation and amortization                                                                 |   | 7,169        |   |   | 16,393       |  
|Stock-based compensation                                                                                 |   | 1,405        |   |   | 1,538        |  
|Finance
      expense                                                                                    |   | 1,543        |   |   | (961         | )
|Unrealized foreign
      currency translation expense                                                    |   | (186         | ) |   | (582         | )
|Equity-settled share-based payment transactions                                                          |   | -            |   |   | 1,156        |  
|Impairment of property,
      plant and equipment (Note 11)                                              |   | 35,856       |   |   | 60,257       |  
|Impairment of inventories                                                                                |   | -            |   |   | 1,941        |  
|Impairment of investment
      in Virginia Energy Resources LLC (Note 9)                                 |   | 368          |   |   | 3,269        |  
|Adjustment of decommissioning liability (Note 13)                                                        |   | 1,895        |   |   | (259         | )
|Gain on sale of assets
      and other                                                                   |   | (943         | ) |   | (31          | )
|Share of
      equity-accounted investee (Note 9)                                                        |   | 335          |   |   | 1,286        |  
|Cash received for services not yet
      provided                                                        |   | 88           |   |   | 278          |  
|Change in non-cash
      working capital (Note 20)                                                       |   | (7,120       | ) |   | 2,890        |  
|Expenditures on reclamation of mineral
      interests                                                   |   | (1,197       | ) |   | (42          | )
|Interest received                                                                                        |   | 47           |   |   | 645          |  
|                                                                                                         |   | (4,352       | ) |   | 453          |  
|INVESTING ACTIVITIES                                                                                     |   |              |   |   |              |  
|Development expenditures on property,
      plant and equipment                                          |   | (1,054       | ) |   | (6,503       | )
|Expenditures on
      exploration, evaluation and development                                            |   | (1,488       | ) |   | (14,615      | )
|Expenditures for Investment in Virginia
      Energy Resources Inc.                                      |   | -            |   |   | (344         | )
|Acquisition of joint
      venture interests, net of cash acquired                                       |   | -            |   |   | (758         | )
|Acquisition of Strathmore Minerals
      Corp., net of cash acquired                                     |   | -            |   |   | 1,399        |  
|Cash received for sale
      of available-for-sale assets                                                |   | 1,995        |   |   | -            |  
|Proceeds from sale of property, plant
      and equipment                                                |   | 233          |   |   | 1,100        |  
|Proceeds from sale of
      marketable securities                                                        |   | 395          |   |   | 839          |  
|Change in cash deposited with regulatory agencies for
      decommissioning liabilities, net of interest |   | 9,330        |   |   | 4,003        |  
|                                                                                                         |   | 9,411        |   |   | (14,879      | )
|FINANCING ACTIVITIES                                                                                     |   |              |   |   |              |  
|Issuance of common
      shares upon exercise of warrants, net of share issuance costs                   |   | 483          |   |   | 10,239       |  
|Issuance of common shares upon exercise
      of options, net of share issuance costs                    |   | 120          |   |   | -            |  
|Repayment of borrowings                                                                                  |   | (134         | ) |   | (608         | )
|Interest paid on convertible debentures                                                                  |   | (1,612       | ) |   | (1,768       | )
|                                                                                                         |   | (1,143       | ) |   | 7,863        |  
|                                                                                                         |   |              |   |   |              |  
|INCREASE IN CASH AND CASH
      EQUIVALENTS DURING THE PERIOD                                            |   | 3,916        |   |   | (6,563       | )
|Effect of exchange rate fluctuations on
      cash held                                                  |   | (134         | ) |   | (466         | )
|Cash and cash equivalents - beginning of period                                                          |   | 6,628        |   |   | 13,657       |  
|CASH AND CASH EQUIVALENTS - END OF PERIOD                                                                | $ | 10,410       |   | $ | 6,628        |  
|                                                                                                         |   |              |   |   |              |  
|Non-cash investing and financing
      transactions:                                                     |   |              |   |   |              |  
|Issuance of shares for
      acquisition of joint venture interests                                      |   | -            |   | $ | 682          |  
|Issuance of shares for investment in
      Virginia Energy                                               |   | -            |   |   | 3,945        |  
|Issuance of shares and
      warrants for acquisition of Strathmore Minerals Corp                        |   | -            |   |   | 37,097       |  
|Issuance of secured notes for
      acquisition of mineral properties                                    |   | -            |   |   | 275          |  

The accompanying notes are an integral part of these
consolidated financial statements.

5

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|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

1.      REPORTING ENTITY AND NATURE
OF OPERATIONS

Energy Fuels Inc. was incorporated under the laws of the
Province of Alberta and continued and is now incorporated in the Province of
Ontario. Energy Fuels Inc.s registered and head office is located at 2 Toronto
Street, Suite 500, Toronto, Ontario, Canada, M5C 2B6 and its principal place of
business and the head office of the Companys U.S. subsidiaries is located at
225 Union Blvd., Suite 600, Lakewood, Colorado USA, 80228.

Energy Fuels Inc. and its subsidiary companies (collectively,
the Company or EFI) are engaged in uranium mining and related activities,
including acquisition, exploration and development of uranium and vanadium
bearing properties, and extraction, processing and selling of uranium and
vanadium.

Uranium, the Companys primary product, is produced in the
form of uranium oxide concentrates (U3O8) and sold to
customers for further processing. Vanadium, a co-product of some of the
Companys mines, is also produced and is in the form of vanadium pentoxide
(V2O5). The Company also processes uranium bearing waste
materials, referred to as alternate feed materials.

The Company and its significant subsidiaries, equity accounted
investees, and joint operations are as follows:

Functional
    Dec. 31,
    Dec. 31,Entity
    Function
    Location
    currency
    2014
    2013Energy Fuels Inc.
    Corporate
    Ontario
    CAD
    100%
    100%Energy Fuels Wyoming Inc.(EFW)
    Exploration
    Wyoming
    USD
    100%
    100%Energy Fuels Holdings
      Corp. ("EFHC")
    Corporate
    Colorado
    USD
    100%
    100%Energy Fuels Resources (USA)
      Inc.("EFR")
    Corporate
    Colorado
    USD
    100%
    100%EFR White Mesa LLC
      ("White Mesa")
    Mill
    Utah
    USD
    100%
    100%EFR Henry Mountains LLC
    Exploration
    Colorado
    USD
    100%
    100%EFR White Canyon Corp
    Mining
    Utah
    USD
    100%
    100%EFR Colorado Plateau LLC
    Mining
    Colorado
    USD
    100%
    100%EFR Arizona Strip LLC
    Mining
    Arizona
    USD
    100%
    100%Strathmore Resources (US) Ltd
    Exploration
    Nevada
    USD
    100%
    100%Roca Honda Resources
      LLC
    Exploration
    Delaware
    USD
    60%
    60%Wyoming Gold Mining Company
    Exploration
    Wyoming
    USD
    100%
    100%Virginia Energy Resources Inc.
    Exploration
    British Columbia
    USD
    17%
    17%


2.      BASIS OF
PRESENTATION

The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS) as issued
by the International Accounting Standards Board (IASB) and are presented in
United States dollars (USD). All numbers are expressed in thousands of USD,
except per share amounts. Certain footnote disclosures have share prices which
are reported in Canadian dollars (Cdn$).

These financial statements have been authorized for issue by
the Companys Board of Directors on March 18, 2015.

Change in fiscal year end

In 2013, the Company changed its fiscal year end from September
30 to December 31, effective as of December 31, 2013. The reason for this change
is to better align the Companys year-end with the year-ends of its major
uranium customers, certain material subsidiaries and industry peers.
Accordingly, for the 2014 fiscal reporting year, the Company is reporting
audited consolidated financial statements for the twelve month period ending
December 31, 2014, with comparative figures for the fifteen month period ended
December 31, 2013 and consequently the results shown for the comparative period
are not comparable.

6

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|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

Share consolidation

At a special meeting held on October 30, 2013, the Companys
shareholders approved a share consolidation, in which fifty common shares of the
Company were exchanged for one new common share. The share consolidation
occurred on November 5, 2013. All share and per share amounts in these
consolidated financial statements have been restated to reflect the share
consolidation.

3.      SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES

Principles of consolidation

These consolidated financial statements include the accounts of
the Company together with its subsidiaries, its equity accounted investees, and
its joint operation assets and liabilities. Subsidiaries are entities controlled
by the Company. The Company controls an entity when it is exposed to, or has
rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity. The financial
statements of subsidiaries are included in the consolidated financial statements
from the date on which control commences until the date on which control ceases.

Intercompany transactions, balances and unrealized gains on
transactions between the Company and its subsidiaries are eliminated. Accounting
policies of subsidiaries have been changed where necessary to ensure consistency
with the policies adopted by the Company.

Interests in equity-accounted investees

The Companys interests in equity-accounted investees comprise
interests in associates. Associates are those entities in which the Company has
significant influence, but not control, over the financial and operating
policies. Investments in associates are accounted for using the equity method
and are recognized initially at cost. The cost of an associate 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.

These financial statements include the Companys share of the
profit or loss and other comprehensive income of equity-accounted investees,
after adjustments to align the accounting policies with those of the Company,
from the date that significant influence commences until the date that
significant influence ceases.

When the Companys share of losses exceeds its interest in an
equity-accounted investee, the carrying amount of the investment, including any
long-term interests that form part thereof, is reduced to zero, and the
recognition of further losses is discontinued except to the extent that the
Company has an obligation or has made payments on behalf of the investee.

The carrying value of an associate is reviewed on a regular
basis and, if impairment in the carrying value has occurred, it is written down
to its recoverable amount in the period in which impairment is identified.

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.

Joint operations

Joint operations are entities the Company has rights to its
proportionate share of the assets and obligations for the liabilities, relating
to an arrangement. These consolidated financial statements include the Companys
proportionate share of Roca Honda Resources assets, liabilities, revenue and
expenses with items of a similar nature on a line-byline basis, from the date
that joint control commences until the date that joint control ceases.

7

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

Business combinations

A business combination is defined as an acquisition of assets
and liabilities that constitute a business. A business consists of inputs,
including non-current assets, and processes, including operational processes,
that when applied to those inputs, have the ability to create outputs that
provide a return to the Company and its shareholders. A business also includes
those assets and liabilities that do not necessarily have all the inputs and
processes required to produce outputs, but can be integrated with the inputs and
processes of the Company to create outputs.

Business acquisitions are accounted for using the acquisition
method whereby acquired assets and liabilities are recorded at fair value as of
the date of acquisition with the excess of the purchase consideration over such
fair value being recorded as goodwill and allocated to cash generating units
(CGUs). Non-controlling interest in an acquisition may be measured at either
fair value or at the non-controlling interests proportionate share of the fair
value of the acquirees net identifiable assets. If the fair value of the net
assets acquired exceeds the purchase consideration, the difference is recognized
immediately as a gain in the consolidated statement of operations. The
acquisition date is the date the Company acquires control over the acquiree. The
Company considers all relevant facts and circumstances in determining the
acquisition date.

Acquisition related costs, other than costs to issue debt or
equity securities of the acquirer, including investment banking fees, legal
fees, accounting fees, valuation fees and other professional or consulting fees
are expensed as incurred.

If the initial accounting for a business combination is
incomplete by the end of the reporting period in which the combination occurs,
the Company reports in its financial statements provisional amounts for the
items for which the accounting is incomplete. During the measurement period, the
Company will retrospectively adjust the provisional amounts recognized at the
acquisition date to reflect new information obtained about facts and
circumstances that existed as of the acquisition date and, if known, would have
affected the measurement of the amounts recognized as of that date. The maximum
length of time for the measurement period is one year from the acquisition date.

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, the sales price and costs incurred with respect to the
transaction can be measured reliably and collectability is reasonably assured.
For uranium, revenue is typically recognized when delivery is evidenced by book
transfer at the applicable uranium storage facility. For vanadium related
products, revenue is typically recognized at the time of shipment to the
customer.

| | 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.

Revenue from alternate feed process milling is recognized as
material is processed, in accordance with the specifics of the applicable
processing agreement. Deferred revenues represent processing proceeds received
on delivery of alternate feed materials but in advance of the required
processing activity.

Interest income and expense

Interest income and expense are recognized as they accrue in
profit or loss, using the effective interest method.

8

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

Foreign currency transactions

Transactions in foreign currencies are translated to the
respective functional currencies of the Companys subsidiaries, investments in
associates, and joint operations 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).

Employee benefits

| | a. | Short-term employee
benefits
| | -- | ----------------------------

Short-term employee benefits are expensed as the related
service is provided. A liability is recognized for the amount expected to be
paid if the Company has a present legal or constructive obligation to pay this
amount as a result of past service provided by the employee and the obligation
can be estimated reliably.

| | b. | Share-based payment
transactions
| | -- | --------------------------------

The Company uses a fair value-based method of accounting for
stock options granted to employees, directors, and non-employees. The fair value
of the award is determined using the Black-Scholes option pricing model on the
date of the grant. For awards with graded vesting, the fair value of each
tranche, adjusted for expected forfeitures, is recognized over its respective
vesting period as an increase in stock-based compensation expense and the
contributed surplus account.

When such stock options are exercised, the proceeds received by
the Company, together with the respective amount previously recorded in
contributed surplus, are credited to capital stock.

Inventories

Expenditures, including depreciation, depletion and
amortization of production assets, incurred in the mining and processing
activities that will result in the future concentrate production are deferred
and accumulated as ore in stockpiles and in-process and concentrate
inventories.

Stockpiles are comprised of coarse ore that has been extracted
from the mine and is available for further processing. Mining production costs
are added to the stockpile as incurred along with a pro-rata share of the
depletion of the associated mineral property and removed from the stockpile
based upon the average cost per ton of ore produced. The current portion of ore
in stockpiles represents the amount expected to be processed in the next twelve
months. Stockpiles are valued at the lower of their weighted average cost or net
realizable value (NRV). NRV is the difference between the estimated future
concentrate price (net of selling costs) and estimated costs to complete
production into a saleable form.

In-process and concentrate inventories include the cost of the
ore removed from the stockpile as well as production costs incurred to process
the ore into a saleable product, as well as the additions from any product
purchased from the market. Processing costs typically include labor, chemical
reagents and directly attributable mill overhead expenditures. Work in-process
and concentrates are carried at the lower of average costs or NRV.

9

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

Materials and other supplies held for use in the production of
inventories are carried at average cost and are not written down below that cost
if the finished products in which they will be incorporated are expected to be
sold at or above cost. However, when a decline in the price of concentrates
indicates that the cost of the finished products exceeds net realizable value,
the materials are written down to NRV. In such a circumstance, the cost to
replace the inventory through the market would be the best available measure of
NRV.

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, as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the Company and the cost can be
measured reliably. The carrying amount of a replaced asset is derecognized when
it is replaced, and the cost of the replacement asset is capitalized.

| | b. | Depreciation, depletion and
  amortization
| | -- | ------------------------------------------

Depreciation, depletion and amortization are calculated on a
straight line or unit of production basis as appropriate. Where a straight line
methodology is used, the assets are depreciated to their estimated residual
value over an estimated useful life which ranges from three to twenty years
depending upon the asset type. Where a unit of production methodology is used,
the assets are depreciated to their estimated residual value over the useful
life defined by managements best estimate of recoverable reserves and/or
resources in the current mine plan. When assets are retired or sold, the
resulting gains or losses are reflected in current earnings as a component of
other income or expense. The Company allocates the amount initially recognized
in respect of an item of property, plant and equipment to its significant parts
and depreciates separately each such part. 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                             | 15 years   | 
| | - | ------------------------------------- | ---------- | 
| |  | Shop tools and equipment              | 3-5 years  | 
| |  | Mining
      equipment                | 5 years    | 
| |  | Mill equipment                        | 5-20 years | 
| |  | Office
      equipment                | 4-5 years  | 
| |  | Furniture and fixtures                | 5-7 years  | 
| |  | Light
      trucks & 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.

Exploration and evaluation assets

Exploration and evaluation activities involve the search for
minerals, the determination of technical feasibility and the assessment of
commercial viability of an identified resource. Exploration and evaluation
expenditures 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;
completing pre-feasibility and feasibility studies; and costs incurred in
acquiring mineral rights.

Exploration and evaluation expenditures are capitalized and are
classified as mineral property Pre-development and non-operating within
property, plant and equipment, until the project demonstrates technical
feasibility and commercial viability. Technical feasibility and commercial
viability generally coincide with the establishment of proven and probable
reserves; however, they may also occur when the Company makes a decision to
proceed with development or begins production. Upon demonstrating technical
feasibility and commercial viability, and subject to an impairment analysis,
capitalized exploration and evaluation costs are transferred to the mineral
properties operating balance within property, plant and equipment.

10

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|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

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 selling,
general and administration expense of profit and loss.

Financial instruments

The Company recognizes financial assets and financial
liabilities when the Company becomes a party to a contract. Financial assets and
financial liabilities, with the exception of financial assets classified as fair
value through profit or loss, are measured at fair value plus transaction costs
on initial recognition. Financial assets at fair value through profit and loss
are measured at fair value on initial recognition and transaction costs are
expensed when incurred.

Measurement in subsequent periods depends on the classification
of the financial instrument:

| | a. | Financial assets and liabilities at fair value through
      profit and loss (FVTPL)
| | -- | --------------------------------------------------------------------------------------

Financial assets and liabilities are classified as FVTPL when
acquired principally for the purpose of trading, if so designated by management
(fair value option), or if they are derivative instruments. Financial assets or
liabilities classified as FVTPL are measured at fair value, with changes
recognized in profit and loss. The Companys financial instruments classified as
FVTPL include convertible debentures (Note 14). The Company does not currently
hold any derivative instruments.

| | b. | Available-for-sale financial
  assets
| | -- | -------------------------------------

The Company's investments in equity securities are classified
as available-for-sale financial assets. Subsequent to initial recognition, they
are measured at fair value and changes therein, other than impairment losses,
and foreign currency differences on available-for-sale monetary items, are
recognized directly in other comprehensive income (loss). When an investment is
derecognized, the cumulative gain or loss in equity is transferred to profit or
loss. The Company has classified its marketable securities as available for
sale.

| | c. | Loans and receivables
| | -- | ---------------------

Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active market. Loans
and receivables are initially recognized at the amount expected to be received,
less a discount (when material) to reduce the loans and receivables to fair
value. Subsequently, loans and receivables are measured at amortized cost using
the effective interest method less a provision for impairment.

Loans and receivables are comprised of trade and other
receivables and cash and cash equivalents

Cash and cash equivalents includes cash on hand, term deposits
and other short-term highly liquid investments with original maturities of three
months or less that are subject insignificant risk of changes in their fair
value, and are used by the Company in the management of short-term
commitments.

| | d. | Other financial
liabilities
| | -- | ---------------------------

Other financial liabilities are financial liabilities that are
not classified as FVTPL. Subsequent to initial recognition, other financial
liabilities are measured at amortized cost using the effective interest rate
method. Accounts payable, accrued liabilities, finance leases and notes payable
are classified as other financial liabilities.

The effective interest method is a method of calculating the
amortized cost of an instrument and of allocating interest income over the
relevant period. The effective interest rate is the rate that exactly discounts
estimated future cash payments (including all fees or points paid or received
that form an integral part of the effective interest rate, transaction costs and
other premiums or discounts) through the expected life of the financial
liability or to the net carrying amount on initial recognition.

11

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|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

Capital stock

Common shares are classified as equity. Incremental costs
directly attributable to the issue of common shares and share options are
recognized as a deduction from equity, net of any tax effects.

Treasury shares

When shares recognized as equity are repurchased, the amount of
the consideration paid, which includes directly attributable costs, net of any
tax effects, is recognized as a deduction from equity. Repurchased shares are
classified as treasury shares and are presented as a reduction in common shares.
When treasury shares are sold or reissued subsequently, the amount received is
recognized as an increase in equity and the resulting surplus or deficit on the
transaction is presented within contributed surplus.

Impairment

| | a. | Non-derivative financial
assets
| | -- | -------------------------------

At each reporting date, the Company assesses whether there is
objective evidence that a financial asset (other than a financial asset
classified as fair value through profit and loss) is impaired.

Objective evidence of an impairment loss includes:

| |  | significant financial difficulty of the
      obligor;                                                                      
| | - | ----------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                             
| |  | delinquencies in interest or principal
      payments;                                                                      
| |   |                                                                                                                             
| |  | increased probability that the borrower will
      enter bankruptcy or other financial reorganization; and                  
| |   |                                                                                                                             
| |  | in the case of equity securities, a significant
      or prolonged decline in the fair value of the security below its cost.

If such evidence exists, the Company recognizes an impairment
loss as the difference between the amortized cost of the loan or receivable and
the present value of the estimated future cash flows, discounted using the
instruments original effective interest rate. The carrying amount of the asset
is reduced by this amount either directly or indirectly through the use of an
allowance account.

| | b. | Non-financial assets
| | -- | --------------------

At each reporting date, the Company reviews the carrying
amounts of its non-financial assets (other than inventories) to determine
whether there is any indication of impairment. If any such indication exists,
then the assets recoverable amount is estimated.

For impairment testing, assets are grouped together into the
smallest group of assets that generates cash inflows from continuing use that
are largely independent of the cash inflows of other assets or cash generating
unit (CGU).

The recoverable amount of an asset or CGU is the greater of its
value in use and its fair value less costs to sell. An impairment loss is
recognized if the carrying amount of an asset or CGU exceeds its recoverable
amount.

Impairment losses are recognized in profit or loss. They are
allocated first to reduce the carrying amount of any goodwill allocated to the
CGU, and then to reduce the carrying amounts of the other assets in the CGU on a
pro rata basis.

An impairment loss is reversed only to the extent that the
assets carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortization, if no impairment loss had been
recognized.

12

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|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

| | c. | Available-for-sale financial
  assets
| | -- | -------------------------------------

Impairment losses on available-for-sale financial assets are
recognized by reclassifying the losses accumulated in the fair value reserve to
profit or loss. The amount reclassified is the difference between the
acquisition cost (net of any principal repayment and amortization) and the
current fair value, less any impairment loss previously recognized in profit or
loss. If the fair value of an impaired available-for-sale debt security
subsequently increases and the increase can be related objectively to an event
occurring after the impairment loss was recognized, then the impairment loss is
reversed through profit or loss; otherwise, it is reversed through OCI.

| | d. | Equity-accounted investees
| | -- | --------------------------

An impairment loss in respect of an equity-accounted investee
is measured by comparing the recoverable amount of the investment with its
carrying amount. An impairment loss is recognized in profit or loss, and is
reversed if there has been a favorable change in the estimates used to determine
the recoverable amount.

Decommissioning liabilities

The Companys decommissioning liabilities relate to expected
mine and mill reclamation and closure activities, as well as costs associated
with reclamation of exploration drilling. Such costs, discounted to their
present value, are provided for and capitalized at the start of each project to
the carrying amount of the asset, along with a corresponding liability as soon
as the obligation to incur such costs arises. The decommissioning liability is
accreted to full value over time through periodic accretion charges recorded to
operations as accretion expense. The Company periodically adjusts the carrying
amounts of the decommissioning liability and the related asset for changes in
estimates of the amount or timing of underlying future cash flows, and discount
rates.

The Companys activities are subject to numerous governmental
laws and regulations. Estimates of future reclamation liabilities for asset
decommissioning and site restoration 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. Expenditures incurred to
dismantle facilities, restore and monitor closed resource properties are charged
against the related reclamation and remediation liability.

Income taxes

Income tax expense comprises current and deferred tax. Current
tax and deferred tax are recognized in profit or loss except to the extent that
it relates to a business combination, or items recognized directly in equity or
in other comprehensive income (loss).

Current tax is the expected tax payable or receivable on the
taxable income or loss for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of
previous years.

Deferred tax is recognized in respect of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. Deferred tax is not
recognized for the following temporary differences: the initial recognition of
assets or liabilities in a transaction that is not a business combination and
that affects neither accounting nor taxable profit or loss, and differences
relating to investments in subsidiaries and jointly controlled entities to the
extent that it is probable that they will not reverse in the foreseeable future.
In addition, deferred tax is not recognized for taxable temporary differences
arising on the initial recognition of goodwill. Deferred tax is measured at the
tax rates that are expected to be applied to temporary differences when they
reverse, based on the laws that have been enacted or substantively enacted by
the reporting date. Deferred tax assets and liabilities are offset if there is a
legally enforceable right to offset current tax liabilities and assets, and they
relate to income taxes levied by the same tax authority on the same taxable
entity, or on different tax entities, but they intend to settle current tax
liabilities and assets on a net basis or their tax assets and liabilities will
be realized simultaneously.

13

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|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

A deferred tax asset is recognized for unused tax losses, tax
credits and deductible temporary differences, to the extent that it is probable
that future taxable profits will be available against which they can be
utilized. Deferred tax assets are reviewed at each reporting date and are
reduced to the extent that it is no longer probable that the related tax benefit
will be realized.

Earnings (loss) per share

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

Borrowing costs

Borrowing costs attributable to the acquisition, construction
or production of qualifying assets are added to the cost of those assets, until
such time as the assets are substantially ready for their intended use. The
Company does not capitalize borrowing costs related to exploration and
evaluation assets. All other borrowing costs are recognized as finance costs in
profit and loss in the period in which they are incurred.

New accounting standards adopted during the current year

The Company has adopted the following new standards, including
any consequential amendments to other standards, with a date of initial
application of January 1, 2014.

|(i)   | IFRS 13 Fair value measurement                                
|----- | --------------------------------------------------------------
|      |                                                               
|(ii)  | IFRIC 21 Levies                                               
|      |                                                               
|(iii) | Amendments to IAS 32 Financial Instruments:
      presentation

The nature and effects of the changes are explained below.

|(i) | IFRS 13 Fair Value
Measurement
|--- | ------------------------------

IFRS 13 Fair Value Measurement (IFRS 13), which
provides guidance on how fair value should be applied where its use is already
required or permitted by other IFRS standards, and includes a definition of fair
value, and is a single source of guidance on fair value measurement and
disclosure requirements for use with all IFRS standards. This standard also
requires additional disclosure about fair value measurement.

|(ii) | IFRIC Interpretation 21,
Levies
|---- | -------------------------------

On January 1, 2014 the Company adopted IFRIC 21, Levies
(IFRIC 21) 2014 with retrospective application. IFRIC 21 provides guidance on
the accounting for a liability to pay a levy, if that liability is within the
scope of IAS 37, Provisions, Contingent Liabilities and Contingent Assets. The
interpretation was issued to address diversity in practice around when the
liability to pay a levy is recognized. The adoption of IFRIC 21 did not have a
material impact on these financial statements.

|(iii) | Amendments to IAS 32 Financial Instruments:
      presentation
|----- | --------------------------------------------------------------

The amendments to IAS 32 Financial Instruments:
presentation (IAS 32) clarify the criteria that should be considered in
determining whether an entity has a legally enforceable right to off-set
financial assets and liabilities if that right is: not contingent on a future
event; and enforceable both in the normal course of business and in the event of
default, insolvency or bankruptcy of the entity and all counterparties.
Amendments to IAS 32 are applicable to annual periods beginning on or after
January 1, 2014, with retrospective application required. The adoption of the
amendments to IAS 32 did not have a material impact on these financial
statements.

14

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

Future Accounting Changes

The IASB issued the following new and revised standards and
amendments, which are not yet effective which may have future applicability to
the Company:

IFRS 15 Revenue from Contracts with Customers

On May 28, 2014 the IASB issued IFRS 15 Revenue from Contracts
with Customers. The new standard is effective for annual periods beginning on or
after January 1, 2017. Earlier application is permitted. IFRS 15 will replace
IAS 11 Construction Contracts, IAS 18 Revenue, IFRIC 13 Customer Loyalty
Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18
Transfer of Assets from Customers, and SIC 31 Revenue  Barter Transactions
Involving Advertising Services. The Company intends to adopt IFRS 15 in its
financial statements for the annual period beginning on January 1, 2017. The
extent of the impact of adoption of the standard has not yet been determined.

IFRS 9 Financial Instruments

On July 24, 2014 the IASB issued the complete IFRS 9 (IFRS 9
(2014)). IFRS 9 (2014) introduces new requirements for the classification and
measurement of financial assets. Under IFRS 9 (2014), financial assets are
classified and measured based on the business model in which they are held and
the characteristics of their contractual cash flows. The Company intends to
adopt IFRS 9 (2014) in its financial statements for the annual period beginning
on January 1, 2018. The extent of the impact of adoption of the standard has not
yet been determined.

Amendments to IFRS 11

On May 6, 2014 the IASB issued Accounting for Acquisitions of
Interests in Joint Operations (Amendments to IFRS 11). The amendments require
business combination accounting to be applied to acquisitions of interests in a
joint operation that constitute a business. The amendments apply prospectively
for annual periods beginning on or after January 1, 2016. The Company intends to
adopt the amendments to IFRS 11 in its financial statements for the annual
period beginning on January 1, 2016. The extent of the impact of adoption of the
amendments has not yet been determined.

Amendments to IAS 16 and IAS 38

On May 12, 2014 the IASB issued amendments to IAS 16
Property, Plant and Equipment and IAS 38 Intangible Assets. The
amendments made to IAS 16 explicitly state that revenue-based methods of
depreciation cannot be used for property, plant and equipment. This is because
such methods reflect factors other than the consumption of economic benefits
embodied in the asset. The amendments in IAS 38 introduce a rebuttable
presumption that the use of revenue-based amortization methods for intangible
assets is inappropriate. This presumption could be overcome only when revenue
and consumption of the economic benefits of the intangible asset are highly
correlated or when the intangible asset is expressed as a measure of revenue.
The Company intends to adopt the amendments to IAS 16 and IAS 38 in its
financial statements for the annual period beginning on January 1, 2016. The
extent of the impact of adoption of the amendments has not yet been determined.

Amendments to IFRS 10 and IAS 28

On September 11, 2014 the IASB issued Sale or Contribution
of Assets between an Investor and its Associate or Joint Venture (Amendments to
IFRS 10 and IAS 28). The amendments address an acknowledged inconsistency
between the requirements in IFRS 10 and those in IAS 28 (2011), in dealing with
the sale or contribution of assets between an investor and its associate or
joint venture (JV). Specifically, under the existing consolidation standard the
parent recognises the full gain on the loss of control, whereas under the
existing guidance on associates and JVs the parent recognises the gain only to
the extent of unrelated investors interests in the associate or JV. The main
consequence of the amendments is that a full gain/loss is recognised when the
assets transferred meet the definition of a business under IFRS 3 Business
Combinations. A partial gain/loss is recognised when the assets
transferred do not meet the definition of a business, even if these assets are
housed in a subsidiary. The Company intends to adopt these amendments in its
financial statements for the annual period beginning on January 1, 2016. The
extent of the impact of adoption of the amendments has not yet been determined.

15

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

Amendments to IAS 1

On December 18, 2014 the IASB issued amendments to IAS 1
Presentation of Financial Statements as part of its major initiative to
improve presentation and disclosure in financial reports (the Disclosure
Initiative). These amendments will not require any significant change to
current practice, but should facilitate improved financial statement
disclosures. The Company intends to adopt these amendments in its financial
statements for the annual period beginning on January 1, 2016. The extent of the
impact of adoption of the amendments has not yet been determined.

Critical accounting estimates and judgments

The preparation of these consolidated financial statements in
accordance with IFRS 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. | Reserves and resources
| | -- | ----------------------

Proven and probable reserves are the economically mineable
parts of the Companys measured and indicated mineral resources demonstrated by
at least a preliminary feasibility study. The Company estimates its proven and
probable reserves and measured, indicated and inferred 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 ore body
requires complex geological judgments to interpret the data. The estimation of
future cash flows related to proven and probable reserves is based upon factors
such as estimates of foreign exchange rates, commodity prices, future capital
requirements and production costs along with geological assumptions and
judgments made in estimating the size and grade of the ore body. Changes in the
proven and probable reserves or measured, indicated and inferred mineral
resources estimates may impact the carrying value of property, plant and
equipment, goodwill, reclamation and remediation obligations, recognition of
deferred tax amounts and depreciation, depletion and amortization.

| | b. | Depreciation, depletion and amortization of property,
      plant and equipment
| | -- | -------------------------------------------------------------------------------

Property, plant and equipment comprise a large component of the
Companys assets and, as such, the depreciation and amortization of those assets
have a significant effect on the Companys financial statements. Depreciation
and amortization of property, plant and equipment used in production is
calculated on a straight line basis or a unit-of-production basis as
appropriate.

Plant and equipment assets depreciated using a straight-line
basis results in the allocation of production costs evenly over the assets
useful life defined as a period of time. Plant and equipment assets depreciated
on a units-of-production basis results in the allocation of production costs
based on current period production in proportion to total anticipated production
from the facility.

Mineral property assets are amortized using a
unit-of-production basis that allocates the cost of the asset to production cost
based on the current periods mined ore as a proportion of the total estimated
resources in the related ore body. The process of making these estimates
requires significant judgment in evaluating and assessing available geological,
geophysical, engineering and economic data, projected rates of production,
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 property, plant and equipment and the recorded amount of
amortization, depletion and depreciation.

16

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

| | c. | Valuation of long-lived
assets
| | -- | ------------------------------

The Company undertakes a review of the carrying values of
property, plant and equipment and intangibles 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 discounted net cash flows. An impairment loss is recognized when the
carrying value of those assets is not recoverable. In undertaking this review,
the management of the Company is required to make significant estimates of,
amongst other things, future production and sale volumes, forecast commodity
prices, future operating and capital costs and reclamation costs to the end of
the mine or mills life. These estimates are subject to various risks and
uncertainties, which may ultimately have an effect on the expected
recoverability of the carrying values of plant, property and equipment and
intangibles.

| | d. | Business combinations
| | -- | ---------------------

Management uses judgment in applying the acquisition method of
accounting for business combinations and in determining fair values of the
identifiable assets and liabilities acquired. The value placed on the acquired
assets and liabilities, including identifiable intangible assets, will have an
effect on the amount of goodwill or bargain purchase gain that the Company may
record on an acquisition. Changes in economic conditions, commodity prices and
other factors between the date that an acquisition is announced and when it
finally is consummated can have a material difference on the allocation used to
record a preliminary purchase price allocation versus the final purchase price
allocation which can take up to one year after acquisition to complete.

| | e. | Decommissioning
liabilities
| | -- | ---------------------------

Decommissioning liabilities are recorded as a liability when
the asset is initially constructed. 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.

| | f. | Determination of significant
  influence
| | -- | ----------------------------------------

Management determines its ability to exercise significant
influence over an investment in shares of other companies by looking at its
percentage interest and other qualitative factors including but not limited to
its voting rights, representation on the board of directors, participation in
policy-making processes material transactions between the Company and the
associate, interchange of managerial personnel, provision of essential technical
information and operating involvement.

| | g. | Determination whether an acquisition represents a
      business combination or asset purchase
| | -- | ----------------------------------------------------------------------------------------------

Management determines whether an acquisition represent a
business combination or asset purchase by considering the stage of exploration
and development of an acquired operation. Consideration is given to whether the
acquired properties include mineral reserves or mineral resources, in addition
to the permitting required and results of economic assessments.

17

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

4.       ACQUISITION OF
STRATHMORE MINERALS CORP.

On June 11, 2013 the Company and Strathmore entered into an
agreement whereby EFI agreed to acquire, by way of a Plan of Arrangement (the
Arrangement), all of the outstanding common shares of Strathmore. Strathmores
primary U.S. mineral properties are the Gas Hills project in Wyoming and a 60%
stake in Roca Honda in New Mexico.

The shareholders of EFI and the shareholders of Strathmore
approved the Arrangement at their respective Special Meetings held on August 13,
2013 and August 20, 2013 respectively. Subsequent to receiving approval from the
Toronto Stock Exchange and the Supreme Court of British Columbia, the
acquisition was completed August 30, 2013.

Pursuant to the Arrangement, Strathmore shareholders received
0.0294 EFI common shares for each common share of Strathmore. Under the terms of
the Arrangement, all Strathmore options vested fully upon change in control and
were replaced with options of EFI based on the exchange ratio.

The cost of acquisition included the fair value of the issuance
of the following instruments: 3,665,395 Energy Fuels common shares at Cdn$10.50
($9.95) per share aggregating to $36,470, plus 63,024 EFI common shares at
Cdn$10.50 (S9.95) per share aggregating to $627 for replacement of Strathmores
restricted share units.

Transaction costs totaled $1,362 including the issuance of
55,095 EFI common shares valued at $548 in satisfaction of the advisory fee,
bringing the total purchase price to $38,459. The value of the Energy Fuels
shares issued was calculated using the share price of the Companys shares on
the date the acquisition closed.

The transaction was accounted for as an asset acquisition and
not a business combination under IFRS 3 due to the stage of its mineral property
projects. The cost of each item of property, plant and equipment acquired was
determined by allocating the price paid for the Company of assets to each item
based on its relative fair value at the time of acquisition.

The aggregate fair values of assets acquired and liabilities
assumed were as follows on the acquisition date:

|                                                                                            |  | $      |  
|------------------------------------------------------------------------------------------- |  | ------ | -
|Issuance of 3,665,395 common shares
      for replacement of Strathmore common shares       |  | 36,470 |  
|Issuance of 63,024 common shares for replacement of
      Strathmore restricted share units |  | 627    |  
|Transaction costs                                                                           |  | 1,362  |  
|Purchase
      consideration                                                                |  | 38,459 |  
|                                                                                            |  |        |  
|The purchase price was allocated as follows:                                                |  |        |  
|Cash and cash equivalents                                                                   |  | 2,213  |  
|Marketable securities                                                                       |  | 245    |  
|Trade and other receivables                                                                 |  | 413    |  
|Prepaid expenses and other assets                                                           |  | 37     |  
|Property, plant and equipment                                                               |  | 35,671 |  
|Restricted cash                                                                             |  | 902    |  
|Accounts payable and accrued liabilities                                                    |  | (917   | )
|Current
      decommissioning liability                                                     |  | (105   | )
|Net identifiable assets                                                                     |  | 38,459 |  

18

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

5.      MARKETABLE SECURITIES

Marketable securities are classified as available-for-sale, are
stated at their fair values, and consist of the following:

|                                                                                                               |  | December 31, |  |  | December 31, | 
|-------------------------------------------------------------------------------------------------------------- |  | ------------ |  |  | ------------ | 
|                                                                                                               |  | 2014         |  |  | 2013         | 
|                                                                                                               |  | **$**        |  |  | $            | 
|Mega Uranium Ltd.
           1,750,000 common shares (December 31, 2013 -
      2,877,000)                     |  | 196          |  |  | 243          | 
|Bayswater Uranium Corporation
           nil common shares (December 31, 2013 -
      2,759,807 common shares) |  | -            |  |  | 157          | 
|Other                                                                                                          |  | 88           |  |  | 9            | 
|                                                                                                               |  | 284          |  |  | 409          | 

In the 12 months ended December 31, 2014 the Company sold
2,877,000 (2013  nil) shares of Mega Uranium Ltd. (Mega) for gross proceeds
of $415 (2013  nil) and recorded other income of $198 (2013  ($598)) in the
statement of profit and loss. In 2014, the Company also exchanged 2,759,807
shares of Bayswater Uranium Corporation ("Bayswater") for 1,750,000 shares of
Mega.

The Company has classified its investments in Mega and
Bayswater as available-for-sale investments and unrealized gains and losses or
changes in fair value are recorded in other comprehensive income until
realized.

The Companys investments in marketable securities are
classified as Level 1 in the fair value hierarchy outlined inIFRS 7
Financial Instruments: Disclosuresas their fair value has been determined
based on a quoted price in an active market.

6.      RECEIVABLES

|                           |  | December 31, |  |  | December 31, | 
|-------------------------- |  | ------------ |  |  | ------------ | 
|                           |  | 2014         |  |  | 2013         | 
|                           |  | **$**        |  |  | $            | 
|Current                    |  |              |  |  |              | 
|Trade receivables - other  |  | 600          |  |  | 653          | 
|                           |  | 600          |  |  | 653          | 
|Non-current                |  |              |  |  |              | 
|Notes
      receivable (1) |  | 682          |  |  | -            | 
|                           |  | 682          |  |  | -            | 

|(1) | In the 12 months ended December 31, 2014 the Company
      received two notes with the principal totaling $1,050 and due in 2018 in
      connection with the sale of certain assets previously recorded as held for
      sale. These notes carry a 3% annual interest payment and are secured by
      the underlying assets. The Company has setup a reserve of $223 against the
      collectability of these receivables.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

19

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

7.      INVENTORIES

|                                                        |  | December 31, |  |  | December 31, | 
|------------------------------------------------------- |  | ------------ |  |  | ------------ | 
|                                                        |  | 2014         |  |  | 2013         | 
|                                                        |  | **$**        |  |  | $            | 
|Concentrates and
      work-in-progress                 |  | 28,363       |  |  | 19,754       | 
|Inventory of ore and alternate feed in
      stockpiles |  | 2,245        |  |  | 4,618        | 
|Raw materials and consumables                           |  | 2,943        |  |  | 3,668        | 
|                                                        |  | 33,551       |  |  | 28,040       | 
|Inventories - by duration                               |  |              |  |  |              | 
|Current                                                 |  | 31,306       |  |  | 28,040       | 
|Long-term - ore in stockpiles                           |  | 2,245        |  |  | -            | 
|                                                        |  | 33,551       |  |  | 28,040       | 

As at December 31, 2014, no inventories are carried at fair
value less costs to sell (December 31, 2013  $4,618). The long-term portion of
inventory of ore in stockpiles represents ore that is not currently expected to
be processed within the next year.

8.      ASSETS HELD FOR SALE

|                                   |  | December 31, |  |  | December 31, | 
|---------------------------------- |  | ------------ |  |  | ------------ | 
|                                   |  | 2014         |  |  | 2013         | 
|                                   |  | **$**        |  |  | $            | 
|Non-core mining assets (1)         |  | -            |  |  | 1,565        | 
|Copper King (2)                    |  | 1,453        |  |  | 2,850        | 
|Marquez Ranch mineral interest (3) |  | 500          |  |  | -            | 
|                                   |  | 1,953        |  |  | 4,415        | 

|(1) | On August 20, 2014 the Company completed the sale of
      certain non-core uranium assets to a private investor group for a
      consideration totaling $2,004.                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                     
|(2) | On July 2, 2014 the Company sold the Copper King Project
      to a private company for $1,495 in cash and 50% on the shares of the new
      company. The new company is actively pursuing a sale of the
  project.
|    |                                                                                                                                                                                                                     
|(3) | On December 3, 2014 the Company signed a letter of intent
      to sell the Marquez Ranch mineral interest for
$500.                                                                                                

9.      EQUITY ACCOUNTED
INVESTEES

The following table reconciles the summarized financial
information to the carrying amount of Energy Fuels interest in Virginia
Energy.

|Consideration paid January 28, 2013                                                                        | $ | 4,277  |  
|---------------------------------------------------------------------------------------------------------- | - | ------ | -
|Share of loss in Virginia Energy for the eight
      months ended September 30, 2013                       |   | (1,286 | )
|Share of other comprehensive
      loss in Virginia Energy for the eight months ended September 30, 2013   |   | (38    | )
|Impairment (b)                                                                                             |   | (1,941 | )
|Balance, December 31, 2013                                                                                 | $ | 1,012  |  
|Share of loss in Virginia Energy for the twelve
      months ended September 30, 2014                      |   | (335   | )
|Share of other comprehensive income
      in Virginia Energy for the twelve month ended September 30, 2014 |   | 71     |  
|Impairment
      (a)                                                                                       |   | (368   | )
|Balance, December 31, 2014                                                                                 | $ | 380    |  

20

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

Virginia Energy generally releases its financial statements
after Energy Fuels releases its financial statements. Accordingly, the Company
records its share of Virginia Energys comprehensive income or loss using
information available from the previous quarter. The Company has recorded a loss
of $335 in other income (expense) and a gain of $71 in other comprehensive
income (loss) for its share of comprehensive income or loss of Virginia Energy
for the 12 months ended December 31, 2014.

|(a) | During the 12 months ended December 31, 2014, it was
      determined that the carrying amount of the Companys investment in
      Virginia Energy exceeded the recoverable amount of the investment. The
      recoverable amount was based on an estimate of the investments fair value
      less costs of disposal. Fair value was derived from the price of the
      Companys ownership of 9,439,857 Virginia Energys shares (VUI.V) at the
      close of the TSX Venture Exchange on September 30, 2014 less estimated
      selling costs of $24. As a result, the Company recorded an impairment
      charge of $368.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(b) | During the 15 months ended December 31, 2013, it was
      determined that the carrying amount of the Companys investment in
      Virginia Energy exceeded the recoverable amount of the investment. The
      recoverable amount was based on an estimate of the investments fair value
      less costs of disposal. Fair value was derived from the price of Virginia
      Energys shares (VUI.V) at the close of the TSX Venture Exchange on
      December 31, 2013 less selling costs of $57. As a result, the Company
      recorded an impairment charge of $1,941.                                                    

10.      PROPERTY, PLANT AND
EQUIPMENT

The following is a summary of property, plant and equipment for
the 12 months ended December 31, 2014:

Mineral PropertiesPlant and
    
    
    
    
    
    Care and
    
    
    Pre-developmentequipment
    
    
    Operating
    
    
    maintenance
    
    
    **and non-operating**
    
    
    TotalCostBalance at January 1, 2014
    $
    81,184
    
    $
    7,327
    
    $
    3,262
    
    $
    104,730
    
    $
    196,503Additions
    
    986
    
    
    -
    
    
    -
    
    
    1,491
    
    
    2,477Disposals for the period
    
    (775
    )
    
    -
    
    
    -
    
    
    -
    
    
    (775
    )Revision of decommissioning liability
    
    926
    
    
    -
    
    
    -
    
    
    -
    
    
    926Reclassified to asset held for sale (2)
    
    -
    
    
    -
    
    
    -
    
    
    (500
    )
    
    (500
    )Balance at
      December 31, 2014
    $
    82,321
    
    $
    7,327
    
    $
    3,262
    
    $
    105,721
    
    $
    198,631Depreciation, depletion, disposals and
      impairmentBalance at January 1, 2014
    
    58,922
    
    
    4,600
    
    
    2,962
    
    
    29,050
    
    
    95,534Depreciation for the period
    
    785
    
    
    -
    
    
    -
    
    
    -
    
    
    785Depletion for the period
    
    -
    
    
    1,296
    
    
    -
    
    
    -
    
    
    1,296Disposals for the period
    
    (713
    )
    
    -
    
    
    -
    
    
    -
    
    
    (713
    )Impairment
      (1)(2)
    
    22,594
    
    
    1,431
    
    
    300
    
    
    11,531
    
    
    35,856Balance at December 31, 2014
    $
    81,588
    
    $
    7,327
    
    $
    3,262
    
    $
    40,581
    
    $
    132,758Net Book Value
    $
    733
    
    $
    -
    
    $
    -
    
    $
    65,140
    
    $
    65,873


|(1) | At June 30 2014, the Company tested its property, plant
      and equipment for impairment (excluding any assets acquired pursuant to
      the acquisition of Strathmore Minerals Corp. and Titan Uranium Inc.) and
      recognized an impairment loss of $30,781. A summary of the impairment
      charge by asset is provided in Note 11.           
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                          
|(2) | In December 2014 the Company entered into a letter of
      intent to sell its interest in the Marquez Uranium mineral interest for
      $500 in cash and an underlying royalty. The Company tested this property
      for impairment and recognized an impairment loss of $5,075. The remaining
      $500 was reclassified as an asset held for sale.

21

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

The following is a summary of property, plant and equipment for
the 15 months ended December 31, 2013:

|                                                                               |   |           |   |   | Mineral Properties |   |   |             | 
|------------------------------------------------------------------------------ | - | --------- | - | - | ------------------ | - | - | ----------- | 
|                                                                               |   | Plant and |   |   |                    |   |   | Care and    | 
|                                                                               |   | equipment |   |   | Operating          |   |   | maintenance | 
|Cost                                                                           |   |           |   |   |                    |   |   |             | 
|Balance at September 30, 2012                                                  | $ | 80,618    |   | $ | 2,288              |   | $ | -           | 
|Acquisition of Colorado Plateau Partners LLC &  Arizona
    Strip Partners LLC |   | -         |   |   | -                  |   |   | -           | 
|Additions                                                                      |   | 3,174     |   |   | 3,057              |   |   | -           | 
|Acquisition of Strathmore Minerals Corp (Note 5)                               |   | 965       |   |   | -                  |   |   | -           | 
|Disposals for the period                                                       |   | (1,502    | ) |   | -                  |   |   | -           | 
|Reclassification to operating (2)                                              |   | -         |   |   | 5,179              |   |   | -           | 
|Reclassification to care and maintenance (1)                                   |   | -         |   |   | (3,169             | ) |   | 3,169       | 
|Revision of decommissioning liability                                          |   | (2,071    | ) |   | (28                | ) |   | 93          | 
|Reclassified
      to assets held for sale (4)                                 |   | -         |   |   | -                  |   |   | -           | 
|Balance at
      December 31, 2013                                             | $ | 81,184    |   | $ | 7,327              |   | $ | 3,262       | 
|                                                                               |   |           |   |   |                    |   |   |             | 
|Depreciation, depletion, disposals and impairment                              |   |           |   |   |                    |   |   |             | 
|Balance at September 30, 2012                                                  |   | 15,341    |   |   | 37                 |   |   | -           | 
|Depreciation for the period                                                    |   | 8,460     |   |   | -                  |   |   | -           | 
|Depletion for the period                                                       |   | -         |   |   | 622                |   |   | -           | 
|Disposals for the period                                                       |   | (1,177    | ) |   | -                  |   |   | -           | 
|Reclassification to care and maintenance (1)                                   |   | -         |   |   | (232               | ) |   | 232         | 
|Impairment
      (3)                                                           |   | 36,298    |   |   | 4,173              |   |   | 2,730       | 
|Balance at
      December 31, 2013                                             | $ | 58,922    |   | $ | 4,600              |   | $ | 2,962       | 
|                                                                               |   |           |   |   |                    |   |   |             | 
|Net Book Value                                                                 | $ | 22,262    |   | $ | 2,727              |   | $ | 300         | 

|(1) | The Beaver, Pandora, and Daneros mines were placed on
      care and maintenance in the 15 months ended December 31, 2013 as a result
      of market conditions. Costs associated with the care and maintenance for
      mines are expensed in the period in which they are incurred and depletion
      is no longer recorded. For the 15 months ended December 31, 2013, the
      costs expensed in profit and loss were $5,402.                                                                                                                                                                                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(2) | The Pinenut mine achieved commercial production in July
      2013.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(3) | During the 15 months ended December 31, 2013, the Company
      tested its property, plant and equipment for impairment (excluding any
      assets acquired pursuant to the acquisition of Strathmore) and recognized
      an impairment loss of $60,257. A summary of the impairment charge by asset
      is provided in Note 11.                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(4) | During the 15 months ended December 31, 2013, the Company
      identified some non-core assets, which includes assets on the Colorado
      Plateau and its Copper King property, and reclassified them to assets held
      for sale. In the three months ended September 30, 2014, the company sold
      its interest in non-core mining assets on the Colorado Plateau for $500
      cash, a $500 note receivable due in 2018 and assumption of the
      liabilities. The Company during the three months ended September 30, 2014
      also sold 50% of its interest in the Copper King property for $1,495 in
      cash and a 50% interest in a new company created to complete the sale of
      the Copper King asset. The 50% interest in the new company is included in
      assets held for sale.

22

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

Pre-development and non-operating properties

The Company enters into exploration agreements from time to
time whereby it may earn an interest in certain mineral properties by issuing
common shares, making cash option payments and/or incurring expenditures in
varying amounts by specified dates.

The following is a summary of the net book value of
pre-development non-operating property expenses shown by area of interest:

December 31,
    
    
    December 31,2014
    
    
    2013**$**
    
    
    $Colorado Plateau
    
    -
    
    
    2,282Henry Mountains
    
    -
    
    
    1,170Arizona Strip
    
    -
    
    
    3,002Wyoming
    
    44,388
    
    
    43,372New Mexico
    
    20,752
    
    
    25,854Total
    
    65,140
    
    
    75,680


11.      IMPAIRMENT OF PROPERTY,
PLANT AND EQUIPMENT

Impairment for the twelve months ended December 31, 2014

In the three months ended June 30, 2014, the Company
identified the decline in the U3O8spot and long-term
prices from April 1, 2014 through July 31, 2014 and a significant
deterioration in the Companys expectation of future uranium prices, as
indicators of potential impairment and as such the Company performed a
quantitative assessment of impairment.

For the purpose of performing impairment analysis, the
Companys White Mesa Mill together with its mines located in the Colorado
Plateau, Henry Mountains and Arizona Strip geographic regions represent a single
cash generating unit (CGU) (collectively referred to as WMM CGU).

Based on the impairment analysis, the Company recorded an
impairment loss of $30,781, in the quarter ended June 30, 2014, with respect to
the WMM CGU. No impairment was required with respect to the Companys mineral
properties in the Wyoming and New Mexico areas.

In December 2014, as a result of the Company entering into a
letter of intent to sell its interest in the Marquez Uranium mineral interest
for considerations including $500 in cash, the Company tested the property for
impairment. With a book value of $5,575, the Company recognized the fair value
of $500 in assets held for sale and recorded an impairment loss of $5,075.

23

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

The following table summarizes the impairment charges for
property, plant and equipment by area of interest for the 12 months period
ending December 31, 2014:

|                                        |   | 12 months ended    |  
|--------------------------------------- | - | ------------------ | -
|                                        |   | Decemeber 31, 2014 |  
|                                        |   |                    |  
|                                        |   | Impairment loss    |  
|Plant and equipment                     | $ | (22,594            | )
|Total plant
      and equipment         |   | (22,594            | )
|Mineral Properties                      |   |                    |  
|Operating                               |   |                    |  
|Arizona Strip                           |   | (1,431             | )
|Total operating                         |   | (1,431             | )
|Care and maintenance                    |   |                    |  
|Colorado Plateau                        |   | (300               | )
|Total care and maintenance              |   | (300               | )
|Pre-development and non-operating       |   |                    |  
|Colorado
      Plateau                  |   | (2,285             | )
|Henry Mountains                         |   | (1,170             | )
|Arizona
      Strip                     |   | (3,001             | )
|Wyoming                                 |   | -                  |  
|New Mexico                              |   | (5,075             | )
|Total pre-development and non-operating |   | (11,531            | )
|Total                                   | $ | (35,856            | )

Key Assumptions

The recoverable amount in the June 30, 2014 impairment analysis
was determined based on the fair value less costs of disposal using discounted
cash flow projections and various other pricing scenarios. Key assumptions used
in the calculation of recoverable amounts include discount rates, uranium
prices, future timing of production volume including the date when a mineral
property can be brought into production and the expected cost to produce uranium
and future care and maintenance and operating costs.

The Companys estimate of future uranium sales prices were
based primarily on the uranium prices prepared by industry analysts. For the
purpose of the June 30, 2014 impairment analysis, management estimated a
long-term uranium price of $43.50/lb. for the period up to December 31, 2014; a
price range of $44.00/lb. to $52.00/lb. for the period 2015 to 2018 and
$55.00/lb. to $60.50/lb. for the period 2019 to 2022. The Company used a pre-tax
real discount rate of 10.5% based on the Companys estimated weighted-average
cost of capital for discounting the cash flow projections.

Sensitivity analysis

As the discounted cash flow analysis did not show any value as
of June 30, 2014, the Company has written off the entire cost basis associated
with the WMM CGU. As such a 10% increase or decrease in the future uranium
prices or a 1% increase or decrease in the discount rate would not result in a
change in the recoverable amount.

24

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

Impairment for the 15 months ended December 31, 2013

The Company considers both quantitative and qualitative factors
to assess impairment.

At September 30, 2013, the Company identified the recent and
the continued decline of uranium prices and the Companys expectation to place
certain of its mineral properties on care and maintenance as indicators of
impairment.

For the purpose of performing impairment analysis, the Company
grouped its plant and equipment at its White Mesa Mill together with its mines
located in the Colorado Plateau, Henry Mountains and Arizona strip geographic
regions as a single cash generating unit (CGU) (collectively referred as WMM
CGU). The Company also assessed impairment of its properties in Wyoming and New
Mexico on a standalone basis.

Based on the impairment analysis, the Company recorded an
impairment loss of $60,257, in the quarter ended September 30, 2013, with
respect to the WMM CGU. No impairment was recorded with respect to the Companys
mineral properties in the Wyoming and New Mexico area. The Company determined
there were no additional indications of impairment at December 31, 2013.

The following table summarizes the impairment charges for
property, plant and equipment related to the WMM CGU by area of interest for the
15 month period ending December 31, 2013:

|                                              |  | 15 months ended   |  
|--------------------------------------------- |  | ----------------- | -
|                                              |  | December 31, 2013 |  
|                                              |  |                   |  
|                                              |  | Impairment loss   |  
|Plant and equipment                           |  | (36,298           | )
|Total plant
      and equipment               |  | (36,298           | )
|Mineral Properties                            |  |                   |  
|Operating                                     |  |                   |  
|Arizona Strip                                 |  | (4,173            | )
|Total operating                               |  | (4,173            | )
|Care and maintenance                          |  |                   |  
|Colorado Plateau                              |  | (1,836            | )
|Daneros                                       |  | (894              | )
|Total care and maintenance                    |  | (2,730            | )
|Pre-development and
      non-operating       |  |                   |  
|Colorado Plateau                              |  | (9,654            | )
|Henry
      Mountains                         |  | (3,843            | )
|Arizona Strip                                 |  | (3,559            | )
|Wyoming                                       |  | -                 |  
|New Mexico                                    |  | -                 |  
|Total pre-development and
      non-operating |  | (17,056           | )
|Total                                         |  | (60,257           | )

Key Assumptions

The recoverable amount in the impairment analysis was based on
the fair value less costs of disposal using discounted cash flow projections.
Key assumptions used in the calculation of recoverable amounts include discount
rates, uranium prices, future timing of production volume including the date
when a mineral property can be brought into production and the expected cost to
produce uranium and future operating costs.

25

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

The Companys estimate of future uranium sales prices were
based on the uranium prices prepared by industry analysts. For the purpose of
the impairment analysis, management estimated a uranium price of $ 38.00/lb. for
the period up to December 31, 2013; a price range of $42.00/lb. to $55.00/lb.
for the period 2014 to 2018 and $62.00/lb. to $75.00/lb. for the period 2019 to
2024. The Company used a pre-tax real discount rate of 10.5% based on the
Companys estimated weighted-average cost of capital for discounting the cash
flow projections.

Impairment charges recognized against property, plant and
equipment may be reversed if there are changes in the assumptions or estimates
used in determining the recoverable amounts of the WMM CGU which indicate that a
previously recognized impairment loss may no longer exist or may have decreased.

Sensitivity analysis

As at December 31, 2013, a 5% increase or decrease in the
future uranium prices would have resulted in a change in the recoverable amount
by approximately $13.6 million, and a 1% increase or decrease in the discount
rate would result in an approximately $4.6 million change in the recoverable
amount based on current life of mine plans models. Significant changes in
uranium price would cause the Company to review its mine plans accordingly.

12.     INTANGIBLE ASSETS

|                                                    |  | 12 months ended |  |  | 15 months ended | 
|--------------------------------------------------- |  | --------------- |  |  | --------------- | 
|                                                    |  | December 31,    |  |  | December 31,    | 
|                                                    |  | 2014            |  |  | 2013            | 
|Sales
      Contracts                               |  | **$**           |  |  | $               | 
|Cost                                                |  | 15,851          |  |  | 15,851          | 
|                                                    |  |                 |  |  |                 | 
|Accumulated amortization, beginning of
      period |  | 8,079           |  |  | 1,943           | 
|Amortization of sales contracts                     |  | 3,890           |  |  | 6,136           | 
|Accumulated amortization, end of period             |  | 11,969          |  |  | 8,079           | 
|                                                    |  |                 |  |  |                 | 
|Carrying amounts                                    |  | 3,882           |  |  | 7,772           | 

26

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

13.      DECOMMISSIONING
LIABILITIES AND RESTRICTED CASH

The following table summarizes the Companys decommissioning
liabilities:

|                                                                      |  | December 31, |   |  | December 31, |  
|--------------------------------------------------------------------- |  | ------------ | - |  | ------------ | -
|                                                                      |  | 2014         |   |  | 2013         |  
|                                                                      |  | **$**        |   |  | $            |  
|Decommissioning liability, beginning of
      period                  |  | 13,799       |   |  | 15,199       |  
|Revision of estimate (1)                                              |  | 2,821        |   |  | (1,933       | )
|Transfer of liability
      associated with the sale of mining assets |  | (536         | ) |  |              |  
|Liability from acquisition of Colorado Plateau
      Partners LLC &   |  |              |   |  |              |  
|Arizona Strip Partners LLC                                            |  | -            |   |  | 54           |  
|Liability from acquisition of Strathmore
      Minerals Corp          |  | -            |   |  | 105          |  
|Accretion                                                             |  | 404          |   |  | 416          |  
|Reclamation work                                                      |  | (1,197       | ) |  | (42          | )
|Decommissioning liability, end of period                              |  | 15,291       |   |  | 13,799       |  
|Decommissioning liability by location:                                |  |              |   |  |              |  
|Exploration drill holes                                               |  | 121          |   |  | 172          |  
|White Mesa Mill                                                       |  | 11,075       |   |  | 8,206        |  
|Colorado Plateau                                                      |  | 1,618        |   |  | 2,053        |  
|Henry Mountains                                                       |  | 496          |   |  | 441          |  
|Daneros                                                               |  | 87           |   |  | 78           |  
|Arizona Strip                                                         |  | 1,237        |   |  | 1,550        |  
|Sheep Mountain                                                        |  | 657          |   |  | 1,299        |  
|                                                                      |  | 15,291       |   |  | 13,799       |  
|Decommissioning liability:                                            |  |              |   |  |              |  
|Current                                                               |  | 121          |   |  | 172          |  
|Non-current                                                           |  | 15,170       |   |  | 13,627       |  
|                                                                      |  | 15,291       |   |  | 13,799       |  

|(1) | Revision of estimates is as a result of a change in the
      risk-free discount rates used to calculate decommissioning liabilities.
      Subsequent changes to the decommissioning liabilities for fully impaired
      assets will be recorded in profit and loss.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The decommissioning and reclamation of the White Mesa mill and
U.S. mines are subject to legal and regulatory requirements. Estimates of the
costs of reclamation are reviewed periodically by the applicable regulatory
authorities. The above accrual represents the Companys best estimate of the
present value of future reclamation costs, discounted using risk-free interest
rates ranging from 0.25% to 2.75% based on US Treasury rates of varying lengths
ranging from 1 to 30 years. The total undiscounted decommissioning liability as
at December 31, 2014 is $26,725 (December 31, 2013 - $27,963). Reclamation costs
are expected to be incurred between 2015 and 2041 in the following manner: 2015
 2019 - $716, 2020  2024 - $2,323, 2025  2035 - $2,013, 2036  2041 -
$21,673.

27

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

Restricted cash, which is held by or for the benefit of
regulatory agencies to collateralize future obligations, are comprised of the
following:

|                                                                          |  | 12 months ended |   |  | 15 months ended |  
|------------------------------------------------------------------------- |  | --------------- | - |  | --------------- | -
|                                                                          |  | December 31,    |  
|                                                                          |  | 2014            |   |  | 2013            |  
|                                                                          |  | **$**           |   |  | $               |  
|Restricted cash, beginning of period                                      |  | 25,478          |   |  | 28,525          |  
|Restricted cash from acquisition of Colorado
      Plateau Partners LLC & |  |                 |   |  |                 |  
|Arizona Strip Partners LLC                                                |  | -               |   |  | 54              |  
|Restricted cash from acquisition of Strathmore
      Minerals Corp        |  | -               |   |  | 902             |  
|Refunds and returns for the period (1)                                    |  | (9,330          | ) |  | (4,003          | )
|Restricted cash,
      end of period                                      |  | 16,148          |   |  | 25,478          |  

|(1) | The Company has cash, cash equivalents and fixed income
      securities as collateral for various bonds posted in favour of the State
      of Utah, the applicable state regulatory agencies in Colorado and Arizona
      and the U.S. Bureau of Land Management for estimated reclamation costs
      associated with the White Mesa mill and 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. During the 12 months
      ended December 31, 2014, the Company had a net refunds and returns of
      $9,331 from its collateral account (December 31, 2013 -$4,003) primarily
      as a result of the restructuring of the Companys surety arrangements and
      the reduction of bonding requirements at some of the Companys
      projects.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

14.      LOANS AND BORROWINGS

The contractual terms of the Companys interest-bearing loans
and borrowings, which are measured at amortized cost, and the Companys
convertible debentures which are measured at fair value, are as follows.

|                                         |  | December 31, |  |  | December 31, | 
|---------------------------------------- |  | ------------ |  |  | ------------ | 
|                                         |  | 2014         |  |  | 2013         | 
|                                         |  | **$**        |  |  | $            | 
|Current portion of loans and borrowings: |  |              |  |  |              | 
|Secured note (2)                         |  | -            |  |  | 250          | 
|Finance
      leases and other           |  | 46           |  |  | 128          | 
|                                         |  | 46           |  |  | 378          | 
|Long-term loans and borrowings:          |  |              |  |  |              | 
|Convertible debentures (1)               |  | 15,740       |  |  | 17,478       | 
|Secured note (2)                         |  | -            |  |  | 203          | 
|Finance leases and other                 |  | 46           |  |  | 271          | 
|                                         |  | 15,786       |  |  | 17,952       | 

28

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

Terms and debt repayment schedule

Terms and conditions of outstanding loans were as follows:

December 31,
    
    
    December 31,2014
    
    
    2013**$**
    
    
    $Nominalinterest
    
    
    Year of
    
    
    Carrying
    
    
    
    
    
    CarryingCurrency
    
    
    rate
    
    
    maturity
    
    
    Face value amount
    
    
    Face value
    
    
    amountConvertible debentures (1)
    
    USD
    
    
    8.5%
    
    
    2017
    
    
    18,964
    
    
    15,740
    
    
    20,684
    
    
    17,478Secured note (2)
    
    USD
    
    
    -
    
    
    2016
    
    
    -
    
    
    -
    
    
    500
    
    
    453Finance leases and other
    
    USD
    
    
    7%
    
    
    2013 -2017
    
    
    185
    
    
    92
    
    
    566
    
    
    39919,149
    
    
    15,832
    
    
    21,750
    
    
    18,330


|(1) | On July 24, 2012 the Company completed a bought deal
      public offering of 22,000 floating-rate convertible unsecured subordinated
      debentures maturing June 30, 2017 (the Debentures). The Debentures were
      issued at a price of Cdn$1 per Debenture for gross proceeds of $21,551
      (the Offering). The Debentures are convertible into common shares at the
      option of the holder at a conversion price of Cdn$15.00 per common share.
      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 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 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).
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | The 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 Ux Weekly Indicator Price.
      Interest can be paid in cash or issuance of the Companys common shares.
      The Debentures may be redeemed in whole or part, at par plus accrued
      interest and unpaid interest by the Company between June 30, 2015 and June
      30, 2017 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 Debentures by paying to the debenture
      trustee in Canadian dollars an amount equal to the aggregate principal
      amount of the outstanding 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 principal amount of
      the 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 principal
      amount of the 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. The debentures are classified as FVTPL where the debentures are
      measured at fair value based on the closing price on the TSX and changes
      are recognized in profit and loss. For the 12 months ended December 31,
      2014 the Company recorded a gain on revaluation of convertible debentures
      of $300 (December 31, 2013 - $2,744).                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|(2) | In July 2014 the Company sold the note along with its
      interest in the underlying property.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

29

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

15.      RELATED PARTY TRANSACTIONS

Key management personnel compensation

Key management includes the Companys Chief Executive Officer
(CEO), Chief Financial Officer (CFO), Chief Operating Officer (COO), General
Counsel and Secretary, Senior Vice President Marketing and Sales, and the
directors. In addition to their salaries or directors fees, executive officers
and directors also participate in the Companys stock option plan (see Note 18).

Key management personnel compensation is comprised of the
following:

|                                          |   | 12 months ended |  |   | 15 months ended | 
|----------------------------------------- | - | --------------- |  | - | --------------- | 
|                                          |   | December 31,    |  |   | December 31,    | 
|                                          |   | 2014            |  |   | 2013            | 
|Salaries and short-term employee benefits | $ | 1,693           |  | $ | 2,316           | 
|Share-based payments                      |   | 1,116           |  |   | 923             | 
|                                          | $ | 2,809           |  | $ | 3,239           | 

16.     CAPITAL STOCK AND
CONTRIBUTED SURPLUS

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 issued and outstanding capital stock consists of Common
Shares as follows:

|                                                                           |  | 2014       |  |  | 2013     | 
|-------------------------------------------------------------------------- |  | ---------- |  |  | -------- | 
|                                                                           |  | Shares     |  |  | Amount $ | 
|Balance, beginning of period                                               |  | 19,601,251 |  |  | 232,089  | 
|Shares issued for exercise of share purchase
      warrants                |  | 61,301     |  |  | 607      | 
|Shares issued for exercise of options                                      |  | 15,000     |  |  | 139      | 
|Shares issued for acquisition of joint venture
      interests             |  | -          |  |  | -        | 
|Shares issued for Virginia Energy
      shares                             |  | -          |  |  | -        | 
|Shares and warrants issued for public and private
      offerings (a)(e)   |  | -          |  |  | -        | 
|Shares issued for investor relations                                       |  | -          |  |  | -        | 
|Shares issued for property acquisitions                                    |  | -          |  |  | -        | 
|Shares issued for Strathmore Minerals
      Corp. asset purchase (b)(c)(d) |  | -          |  |  | -        | 
|Tax recovery from expired share purchase warrants                          |  | -          |  |  | -        | 
|Adjustment due to rounding for share
      consolidation                   |  | -          |  |  | -        | 
|Share
      issuance costs                                                 |  | -          |  |  | -        | 
|Balance, December 31,                                                      |  | 19,677,552 |  |  | 232,835  | 

|a) | On June 13, 2013, the Company completed an equity private
      placement of 947,616 non-transferable subscription receipts at a price of
      Cdn$7.00 ($6.75) per subscription receipt for gross total proceeds of
      $6,522. Each subscription receipt was exchangeable into one unit of the
      Company. Each unit consisted of one common share and one-half of one
      warrant. Each whole warrant entitles the holder to purchase one additional
      common share at a price of Cdn$9.50 until June 15, 2015. Also included in
      the consideration are compensation warrants where each whole warrant
      entitles the holder to purchase one common share at a price of Cdn$9.00
      until June 15, 2015. The fair value of the 473,808 full warrants and the
      50,594 compensation warrants that were issued on the completion of the
      private placement totaled $838 and this value was recorded in share
      purchase warrants, a separate component of shareholders
  equity.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

30

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

|b) | On August 29, 2013 the Company completed the acquisition
      of Strathmore in exchange for 3,665,395 Energy Fuels common shares at
      Cdn$10.50 ($10.00) per share aggregating to $36,470, plus 63,024 EFI
      common shares at Cdn$10.50 (S10.00) per share aggregating to $627 for
      replacement of Strathmores restricted share units which had fully vested
      upon acquisition by EFI.                                                                                    
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|c) | Pursuant to the acquisition of Strathmore, the Company
      issued 55,095 EFI common shares valued at $548 in satisfaction of the
      advisory fee. The value of the Energy Fuels shares issued was calculated
      using the share price of the Companys shares on the date the acquisition
      closed.                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|d) | On September 11, 2013 the Company issued 107,645 shares
      valued at $989 to former employees of Strathmore in consideration for
      termination liabilities of certain employees. The value of the Energy
      Fuels shares issued was calculated using the share price of the Companys
      shares on the date the shares were issued. These costs were expensed in
      the consolidated financial statements of the Company.                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|e) | On October 16, 2013 the Company completed an offering of
      625,000 shares at a price of Cdn$8.00 ($7.73) for total gross proceeds of
      $4,833. Also included in the consideration are 30,963 compensation
      warrants where each whole warrant entitles the holder to purchase one
      common share at a price of Cdn$8.00 until October 16, 2016. The fair value
      of the 30,963 compensation warrants that were issued on the completion of
      the offering totaled $60.

Contributed surplus

|                                                       |  | December 31, |   |  | December 31, |  
|------------------------------------------------------ |  | ------------ | - |  | ------------ | -
|                                                       |  | 2014         |   |  | 2013         |  
|                                                       |  | **$**        |   |  | $            |  
|Balance, beginning of period                           |  | 21,182       |   |  | 17,906       |  
|Share purchase warrants expired                        |  | -            |   |  | 2,004        |  
|Tax expense from expired share
      purchase warrants |  | -            |   |  | (266         | )
|Share-based compensation                               |  | 1,405        |   |  | 1,538        |  
|Stock options exercised                                |  | (19          | ) |  | -            |  
|Balance, end of
      period                           |  | 22,568       |   |  | 21,182       |  

Share Purchase Warrants

|                   |  |                  |  |  | Exercise Price |  |  | Warrants | 
|------------------ |  | ---------------- |  |  | -------------- |  |  | -------- | 
|Month
      Issued |  | Expiry Date      |  |  | Cdn$           |  |  | Issued   | 
|March 2011         |  | March 31, 2015   |  |  | 32.50          |  |  | 230,000  | 
|June 2012          |  | June 22, 2015    |  |  | 13.25          |  |  | 355,005  | 
|June 2013          |  | June 15, 2015    |  |  | 9.50           |  |  | 464,859  | 
|June 2013          |  | June 15, 2015    |  |  | 9.00           |  |  | 19,915   | 
|October 2013       |  | October 16, 2015 |  |  | 8.00           |  |  | 9,290    | 

31

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

|                                                                                |  | Weighted       |  |  | Number of warrants |  
|------------------------------------------------------------------------------- |  | -------------- |  |  | ------------------ | -
|                                                                                |  | Average        |  |  |                    |  
|                                                                                |  | Exercise Price |  |  | December 31,       |  
|                                                                                |  | Cdn$           |  |  | 2014               |  
|Balance, beginning of period                                                    |  | 24.50          |  |  | 1,140,370          |  
|Expiration of agent warrants issued in
      connection with public offering    |  | 25.00          |  |  | -                  |  
|Expriation of warrants issued
      in exchange for Titan Uranium Inc. warrants |  | 32.50          |  |  | -                  |  
|Warrants issued in connection with private
      placement (1)                  |  | 8.76           |  |  | -                  |  
|Warrants issued in connection
      with the public offering (2)                |  | 8.00           |  |  | -                  |  
|Shares issued for exercise of share purchase warrants                           |  | 8.72           |  |  | (61,301            | )
|Balance, end of period                                                          |  | 15.61          |  |  | 1,079,069          |  

|                                                                                |  | December 31, |   |  | December 31, |  
|------------------------------------------------------------------------------- |  | ------------ | - |  | ------------ | -
|                                                                                |  | 2014         |   |  | 2013         |  
|                                                                                |  | **$**        |   |  | $            |  
|Balance, beginning of period                                                    |  | 4,838        |   |  | 6,002        |  
|Expiration of warrants issued in exchange for
      Titan Uranium Inc. warrants |  | -            |   |  | (541         | )
|Expiration of warrants issued
      in connection with public offering          |  | -            |   |  | (1,463       | )
|Warrants issued for public and private
      offerings (1)(2)                   |  | -            |   |  | 898          |  
|Shares issued for exercise of
      share purchase warrants                     |  | (124         | ) |  | -            |  
|Share
      issuance costs                                                      |  | -            |   |  | (58          | )
|Balance, end of period                                                          |  | 4,714        |   |  | 4,838        |  

|(1) | The following weighted average assumptions were used for
      the Black-Scholes option pricing model to calculate the $838 of fair value
      for the 524,402 warrants issued in connection with the June 2013 private
      placement.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Risk-free rate          | 1.016%   
| | ----------------------- | ---------
| | Expected life           | 2.0 years
| | Expected volatility     | 94%*     
| | Expected dividend yield | 0.0%     

|(2) | The following weighted average assumptions were used for
      the Black-Scholes option pricing model to calculate the $60 of fair value
      for the 30,963 warrants issued in connection with the October 2013 public
      offering:
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Risk-free rate          | 1.186%   
| | ----------------------- | ---------
| | Expected life           | 2.0 years
| | Expected volatility     | 93%      
| | Expected dividend yield | 0.0%     

| | * | Expected volatility is measured based on the
      Companys historical share price volatility over the expected life of the
      warrants.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------

32

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

17.      EARNINGS (LOSS) PER COMMON
SHARE Weighted average number of common shares (basic)

The following is a reconciliation of weighted average shares
outstanding for the 12 months ended December 31, 2014 and the 15 months ended
December 31, 2013:

|                                                                      |  | 12 months ended   |  |  | 15 months ended   | 
|--------------------------------------------------------------------- |  | ----------------- |  |  | ----------------- | 
|                                                                      |  | December 31, 2013 |  |  | December 31, 2013 | 
|Issued common shares at beginning of period                           |  | 19,601,251        |  |  | 13,572,121        | 
|Effect of share options exercised                                     |  | 11,137            |  |  | -                 | 
|Effect of shares issued for
      exercise of share purchase warrants |  | 49,273            |  |  | -                 | 
|Effect of shares issued in asset acquisitions                         |  | -                 |  |  | 1,101,711         | 
|Effect of shares issued in a
      private placements                 |  | -                 |  |  | 744,151           | 
|Effect of shares issued in a public offerings                         |  | -                 |  |  | 104,167           | 
|Effect of shares issued to settle obligations                         |  | -                 |  |  | 35,830            | 
|Weighted
      average shares outstanding                             |  | 19,661,661        |  |  | 15,557,980        | 

Diluted earnings (loss) per share

The calculation of diluted earnings per share after adjustment
for the effects of all potential dilutive common shares, calculated as follows:

|                                                                             |  | 12 months ended |   |  | 15 months ended |  
|---------------------------------------------------------------------------- |  | --------------- | - |  | --------------- | -
|                                                                             |  | December 31,    |   |  | December 31,    |  
|                                                                             |  | 2014            |   |  | 2013            |  
|Loss attributable to shareholders                                            |  | ($43,612        | ) |  | ($87,325        | )
|Basic and diluted
      weighted average number of common shares outstanding |  | 19,661,661      |   |  | 15,557,980      |  
|Loss per common share                                                        |  | ($2.22          | ) |  | ($5.61          | )

At December 31, 2014, 1,984,482 options and warrants (December
31, 2013 - 1,935,688)and the potential conversion of the uranium
debentures have been excluded from the calculation as their effect would have
been anti-dilutive.

The average market value of the Companys shares for purposes
of calculating the dilutive effect of share options was based on quoted market
prices for the period during which the options were outstanding.

18.      SHARE-BASED PAYMENTS

Stock options

The fair value of stock options granted during the 12 months
ended December 31, 2014 and the 15 months ended December 31, 2013 is as follows:

|                                    |  | 12 months ended   |  |  | 15 months ended   | 
|----------------------------------- |  | ----------------- |  |  | ----------------- | 
|                                    |  | December 31, 2014 |  |  | December 31, 2013 | 
|                                    |  | **$**             |  |  | $                 | 
|Share option plan
      expense (1) |  | 1,405             |  |  | 1,269             | 
|Replacement of Strathmore options   |  | -                 |  |  | 269               | 
|Value of stock options granted      |  | 1,405             |  |  | 1,538             | 

|(1) | The Company has established a stock option plan whereby
      the Board of Directors may grant options to employees, directors and
      consultants to purchase common shares of the Company. The maximum number
      of authorized but unissued shares available to be granted under the plan
      shall not exceed 10% of its issued and outstanding common shares. The
      exercise price of the options is set at the Companys closing share price
      on the day before the grant date.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

33

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

For the 12 months ended December 31,
2014, the Company granted 307,250 stock options (December 31, 2013  496,121)
with a fair value of $1,600 to its employees, directors and consultants
recording stock-based compensation and recorded an expense of $1,405 (December
31,2013  $1,538 net of $312 capitalized as part of the Strathmore transaction).
These options were granted with the following vesting conditions: 50% -
immediately, 25% - one year after grant date, 25% - two years after grant date.

The fair value of stock options granted
to employees, directors and consultants was estimated on the dates of the grants
using the Black-Scholes option pricing model with the following assumptions used
for the grants made during the 12 months ended December 31, 2014:

| | Risk-free rate          | 1.6%     
| | ----------------------- | ---------
| | Expected life           | 5.0 years
| | Expected volatility     | 81%      
| | Expected dividend yield | 0.0%     

| | * | Expected volatility is measured based on the
      Companys historical share price volatility over the expected life of the
      warrants.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------

|(2) | For the 15 months ended December 31, 2013, the Company
      granted 496,121 stock options to its employees, directors, consultants and
      former employees of Strathmore, recording stock-based compensation expense
      of $1,538 including $312 capitalized as a cost of the Strathmore
      transaction
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                  
|    | The fair value of stock options granted to employees,
      directors and consultants was estimated on the dates of the grants using
      the Black-Scholes option pricing model with the following assumptions used
      for the grants made during the year:                                                 

| | Risk-free rate          | 1.18% - 1.84%  
| | ----------------------- | ---------------
| | Expected life           | 1.2  5.0 years
| | Expected volatility     | 60% - 95%      
| | Expected dividend yield | 0.0%           

The fair value of stock options granted
to former employees, directors and consultants of Strathmore was estimated on
the dates of the grants using the Black-Scholes option pricing model with the
following assumptions used for the grants made during the year:

| | Risk-free rate          | 1.06% - 2.40%  
| | ----------------------- | ---------------
| | Expected life           | 0.2  9.2 years
| | Expected volatility     | 51% - 104%     
| | Expected dividend yield | 0.0%           

| | * | Expected volatility is measured based on the
      Companys historical share price volatility over the expected life of the
      stock options.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------

34

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    

The summary of the Companys stock options at December 31, 2014
and December 31, 2013, and the changes for the fiscal years ending on those
dates is presented below:

12 months ended
    
    
    
    
    
    15 months endedDecember 31, 2014
    
    
    
    
    
    December 31, 2013Weighted
    
    
    
    
    
    Range of
    
    
    WeightedRange of
    
    
    Average
    
    
    
    
    
    Exercise
    
    
    AverageExercise Prices
    
    
    Exercise Price
    
    
    Number of
    
    
    Prices
    
    
    Exercise Price
    
    
    Number ofCdn$
    
    
    Cdn$
    
    
    Options
    
    
    Cdn$
    
    
    Cdn$
    
    
    OptionsBalance, beginning of period
    
    7.60 - 44.22
    
    
    14.27
    
    
    795,318
    
    
    8.00 - 112.50
    
    
    16.56
    
    
    620,756Transactions during the period:Granted
    
    9.05
    
    
    9.05
    
    
    307,250
    
    
    7.60 - 44.22
    
    
    14.79
    
    
    496,121Exercised (1)
    
    8.75
    
    
    8.75
    
    
    (15,000
    )
    
    -
    
    
    -
    
    
    -Forfeited
    
    7.60 - 44.22
    
    
    14.70
    
    
    (158,655
    )
    
    7.60 - 44.22
    
    
    19.45
    
    
    (180,323
    )Expired
    
    17.50
    
    
    17.50
    
    
    (23,500
    )
    
    13.95
      - 112.50
    
    
    24.50
    
    
    (141,236
    )Balance, end of period
    
    7.60 - 44.22
    
    
    11.66
    
    
    905,413
    
    
    7.60 - 44.22
    
    
    14.27
    
    
    795,318


The weighted average price on option exercised in the 12 months
ended December 31, 2014 was Cdn$10.18 ($9.10) .

The following table reflects the actual stock options issued
and outstanding as of December 31, 2014:

|Options outstanding |  |          | Options Exercisable | 
|------------------- |  | -------- | ------------------- | 
|                    |  |          |                     | 
|Exercise price      |  |          |                     | 
|(Cdn$)              |  | Quantity |                     | 
|$0.00 to $9.99      |  | 449,950  |                     | 
|$10.00 to $19.99    |  | 410,570  |                     | 
|$20.00 to $29.99    |  | 31,576   |                     | 
|$30.00 to $39.99    |  | 3,117    |                     | 
|$40.00 to $49.99    |  | 10,200   |                     | 
|                    |  | 905,413  |                     | 

35

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

19.      INCOME TAXES

A reconciliation of income tax expense (recovery) and the
product of accounting income before income tax, multiplied by the combined
Canadian federal and provincial statutory income tax rate for the 15 months
ended December 31, 2013 and the 12 months ended September 30, 2012 is as
follows:

|                                                   |   | 12 months ended   |   |   | 15 months ended   |  
|-------------------------------------------------- | - | ----------------- | - | - | ----------------- | -
|                                                   |   | December 31, 2014 |   |   | December 31, 2013 |  
|Net loss before income taxes                       | $ | (43,509           | ) | $ | (87,325           | )
|Combined federal and provincial rate               |   | 26.50%            |   |   | 26.50%            |  
|                                                   |   |                   |   |   |                   |  
|Expected income tax expense (recovery)             |   | (11,530           | ) |   | (23,141           | )
|                                                   |   |                   |   |   |                   |  
|Stock based compensation                           |   | 337               |   |   | 317               |  
|Non-taxable items                                  |   | (88               | ) |   | (59               | )
|Non-deductible items                               |   | 30                |   |   | 58                |  
|Foreign tax rate differences                       |   | -                 |   |   | (9,147            | )
|Change in
      unrecognized temporary differences |   | 11,354            |   |   | 31,972            |  
|Income tax expense (recovery)                      | $ | 103               |   | $ | -                 |  

The significant components of the Company's deferred income tax
assets (liabilities) are as follows:

|                          |   | December 31, |   |   | December 31, |  
|------------------------- | - | ------------ | - | - | ------------ | -
|                          |   | 2014         |   |   | 2013         |  
|                          |   |              |   |   |              |  
|Deferred tax asset:       |   |              |   |   |              |  
|Net operating losses      | $ | 2,307        |   | $ | 3,772        |  
|Deferred income tax asset |   | 2,307        |   |   | 3,772        |  
|                          |   |              |   |   |              |  
|                          |   |              |   |   |              |  
|Deferred tax liabilities: |   |              |   |   |              |  
|Intangibles               |   | (1,460       | ) |   | (2,924       | )
|Unrealized Capital Gain   |   | (847         | ) |   | (848         | )
|                          |   | (2,307       | ) |   | (3,772       | )
|Deferred tax assets - net | $ | -            |   | $ | -            |  

The aggregate amount of taxable temporary differences
associated with investments in subsidiaries, for which deferred tax liabilities
have not been recognized, as of December 31, 2014 is $1,485 (December 31, 2013,
$3,100)

36

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

Unrecognized Deferred Tax Assets

Deferred tax assets have not been recognized in respect of the
following deductible temporary differences:

|                                      |   | December 31, |  |   | December 31, | 
|------------------------------------- | - | ------------ |  | - | ------------ | 
|                                      |   | 2014         |  |   | 2013         | 
|Operating Losses                      | $ | 145,586      |  | $ | 168,392      | 
|Capital Losses - United States        |   | 54,399       |  |   | -            | 
|Allowable Capital Losses - Canada     |   | 3,917        |  |   | -            | 
|Mineral properties and deferred costs |   | 65,704       |  |   | 67,926       | 
|Decommissioning liabilities           |   | 15,291       |  |   | 13,016       | 
|Inventories, Investments & Other      |   | 7,299        |  |   | 3,740        | 
|Property, plant and equipment         |   | 25,499       |  |   | 5,321        | 
|                                      | $ | 317,695      |  | $ | 258,395      | 

At December 31, 2014 and December 31, 2013 the Company did not
recognize the benefit related to the deferred tax assets for the above related
items in the financial statements as management did not consider it probable
that the Company will be able to realize the deferred tax assets in the future.

The following table summarize the Company's capital losses and
net operating losses that can be applied against future taxable profit.
Utilization of part of the United States loss carry forwards will be limited in
any year as a result of previous changes in ownership. Utilization of the
Canadian loss carry forwards will be subject to the Acquisition of Control Rules
as a result of previous changes in ownership.

|Country       |  | Type                     |  |   | Amount  |  |  | Expiry Date | 
|------------- |  | ------------------------ |  | - | ------- |  |  | ----------- | 
|Canada        |  | Non-capital losses       |  | $ | 23,679  |  |  | 2027 - 2034 | 
|Canada        |  | Allowable Capital losses |  |   | 3,917   |  |  | None        | 
|Canada        |  | Investment Tax Credits   |  |   | 1,424   |  |  | 2023-2026   | 
|United States |  | Net operating losses     |  |   | 128,984 |  |  | 2026-2034   | 
|United States |  | Capital losses           |  |   | 54,399  |  |  | 2019        | 

20.     SUPPLEMENTAL FINANCIAL
INFORMATION

The components of revenues are as follows:

|                                              |   | 12 months ended |  |   | 15 months ended | 
|--------------------------------------------- | - | --------------- |  | - | --------------- | 
|                                              |   | December 31,    | 
|                                              |   | 2014            |  |   | 2013            | 
|Uranium concentrates                          | $ | 45,755          |  | $ | 63,732          | 
|Vanadium concentrates                         |   | -               |  |   | 9,194           | 
|Alternate feed materials processing and other |   | 498             |  |   | 322             | 
|Revenues                                      | $ | 46,253          |  | $ | 73,248          | 

The Company has three major customers to which its sales for
the year were as follows: $20,662; $8,566; $16,527; (2013 - $26,935; $10,409;
$26,389).

The Companys revenues by country of customer for the current
year were as follows: $25,591 - U.S.; $20,662 - South Korea (2013 - $46,313 -
U.S.; $26,935 - South Korea).

37

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

The components of selling, general and administrative expenses
are as follows:

|                                                          |   | 12 months ended |   |   | 15 months ended |  
|--------------------------------------------------------- | - | --------------- | - | - | --------------- | -
|                                                          |   | December 31,    |  
|                                                          |   | 2014            |   |   | 2013            |  
|Intangible asset amortization                             | $ | (3,890          | ) | $ | (6,136          | )
|Selling expenses                                          |   | (279            | ) |   | (1,252          | )
|Costs related to acquisition of Strathmore
      Minerals |   | -               |   |   | (2,418          | )
|General and
      administrative                          |   | (11,342         | ) |   | (15,091         | )
|Selling, general and administrative expenses              | $ | (15,511         | ) | $ | (24,897         | )

The components of finance income (expense) are as follows:

|                                                      |   | 12 months ended |   |   | 15 months ended |  
|----------------------------------------------------- | - | --------------- | - | - | --------------- | -
|                                                      |   | December 31,    |  
|                                                      |   | 2014            |   |   | 2013            |  
|Interest expense                                      |   | (1,689          | ) |   | (1,971          | )
|Interest income                                       |   | 47              |   |   | 645             |  
|Accretion expense                                     | $ | (404            | ) | $ | (416            | )
|Gain (loss) on sale of marketable securities (Note 5) |   | 198             |   |   | (539            | )
|Foreign exchange                                      |   | 5               |   |   | 497             |  
|Change in value of
      convertible debentures       |   | 300             |   |   | 2,744           |  
|Finance income (expense)                              | $ | (1,543          | ) | $ | 960             |  

A summary of depreciation, depletion and amortization expense
recognized in the consolidated financial statements is as follows:

|                                                  |   | 12 months ended |   |   | 15 months ended |  
|------------------------------------------------- | - | --------------- | - | - | --------------- | -
|                                                  |   | December 31,    |  
|                                                  |   | 2014            |   |   | 2013            |  
|Recognized in production cost of sales            | $ | (3,073          | ) | $ | (7,710          | )
|Recognized in care and maintenance expenses       |   | -               |   |   | (2,544          | )
|Recognized in selling, general and administrative |   | (4,096          | ) |   | (6,139          | )
|Depreciation,
      depletion and amortization    | $ | (7,169          | ) | $ | (16,393         | )

A summary of employee benefits expense recognized in the
consolidated financial statements is as follows:

|                                                                                                                       |  | 12 months ended |  |  | 15 months ended | 
|---------------------------------------------------------------------------------------------------------------------- |  | --------------- |  |  | --------------- | 
|                                                                                                                       |  | December 31,    | 
|                                                                                                                       |  | 2014            |  |  | 2013            | 
|Recognized in property, plant and equipment and
      inventories      Salaries and short-term employee
      benefits |  | 9,986           |  |  | 22,462          | 
|                                                                                                                       |  | 9,986           |  |  | 22,462          | 
|Recognized in selling,
      general and administration      Salaries and
      short-term employee benefits           |  | 3,568           |  |  | 5,654           | 
|Share-based compensation                                                                                               |  | 1,405           |  |  | 1,226           | 
|                                                                                                                       |  | 4,973           |  |  | 6,880           | 
|Employee benefits expenses                                                                                             |  | 14,959          |  |  | 29,342          | 

38

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|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

The change in non-cash working capital items in the
consolidated statements of cash flows is as follows:

|                                                   |   | 12 months ended |   |   | 15 months ended |  
|-------------------------------------------------- | - | --------------- | - | - | --------------- | -
|                                                   |   | December 31,    |  
|                                                   |   | 2014            |   |   | 2013            |  
|Change in non-cash working capital items:          |   |                 |   |   |                 |  
|Change in trade and other
      receivables        | $ | 54              |   | $ | 14,471          |  
|Change in inventories                              |   | (6,760          | ) |   | (9,819          | )
|Change in prepaid expenses and
      other assets  |   | 279             |   |   | (285            | )
|Change in accounts payable and accrued liabilities |   | (693            | ) |   | (1,477          | )
|Change in non-cash working capital items           | $ | (7,120          | ) | $ | 2,890           |  

A summary of other income (expense) recognized in the
consolidated financial statements is as follows:

|                                                      |   | 12 months ended |   |   | 15 months ended |  
|----------------------------------------------------- | - | --------------- | - | - | --------------- | -
|                                                      |   | December 31,    |  
|                                                      |   | 2014            |   |   | 2013            |  
|Share of equity-accounted investees,
      net of tax |   | (335            | ) |   | (1,286          | )
|Transaction costs                                     |   | (402            | ) |   | -               |  
|Sale of property, plant and equipment                 |   | 464             |   |   | -               |  
|Sale of assets held for sale                          |   | 550             |   |   | -               |  
|Sale of technical data                                |   | 237             |   |   | -               |  
|Other                                                 |   | 288             |   |   | 31              |  
|Other income (expense)                                | $ | 802             |   | $ | (1,255          | )

A summary of care and maintenance expenses recognized in the
consolidated financial statements is as follows:

|                           |   | 12 months ended |  |   | 15 months ended | 
|-------------------------- | - | --------------- |  | - | --------------- | 
|                           |   | December 31,    | 
|                           |   | 2014            |  |   | 2013            | 
|Arizona Strip              |   | 1,281           |  |   | 496             | 
|Colorado Plateau           |   | 761             |  |   | 3,771           | 
|Henry Mountains            |   | 816             |  |   | 604             | 
|White Canyon               |   | 154             |  |   | 373             | 
|White Mesa Mill (1)        |   | 3,992           |  |   | 158             | 
|Care and
      maintenance | $ | 7,004           |  | $ | 5,402           | 

|(1) | Includes a $1,458 adjustment to decommissioning liability
      due to a change in discount rates.
|--- | --------------------------------------------------------------------------------------------------

The Companys loss from operations included the following
expenses presented by function:

|                                 |       | **12 months ended** |  |   | 15 months ended | 
|-------------------------------- | ----- | ------------------- |  | - | --------------- | 
|                                 |       | December 31,        | 
|                                 |       | 2014                |  |   | 2013            | 
|Cost of sales                    |       | 66,138              |  |   | 133,440         | 
|General and
      administrative |       | 15,743              |  |   | 24,897          | 
|                                 | **$** | **81,881**          |  | $ | 158,337         | 

Cost of sales for the 12 month period ended December 31, 2014
includes impairment charges of $35,856 related to its US operating and
non-operating properties (15 month period ended December 31, 2014 - $60,257
related to the impairment of the US operating and non-operating properties).

39

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|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

21.     COMMITMENTS AND
CONTINGENCIES

General legal matters

The Company is subject to a variety of legal and regulatory
claims as part of its ongoing operations, which are described below. The Company
has assessed that it was not probable as at December 31, 2014 that any of the
following would result in the Company having to pay damages or expend any
resources, and accordingly has not recorded any amounts in these consolidated
financial statements with respect to these claims.

In November, 2012, the Company was served with a Plaintiffs
Original Petition and Jury Demand in the District Court of Harris County, Texas,
claiming unspecified damages from the disease and injuries resulting from
mesothelioma from exposure to asbestos, which the Plaintiff claims was
contributed to by being exposed to asbestos products and dust while working at
the White Mesa Mill. The Company does not consider this claim to have any merit,
and therefore does not believe it will materially affect the Companys financial
position, results of operations or cash flows. In January, 2013, the Company
filed a Special Appearance challenging jurisdiction and certain other procedural
matters relating to this claim.

In January, 2013, the Ute Mountain Ute tribe filed a Petition
to Intervene and Request for Agency Action challenging the Corrective Action
Plan approved by the State of Utah Department of Environmental Quality (UDEQ)
relating to nitrate contamination in the shallow aquifer at the White Mesa Mill
site. This challenge is currently being evaluated, and may involve the
appointment of an administrative law judge to hear the matter. The Company does
not consider this action to have any merit. If the petition is successful, the
likely outcome would be a requirement to modify or replace the existing
Corrective Action Plan. At this time, the Company does not believe any such
modification or replacement would materially affect the Companys financial
position, results of operations or cash flows. However, the scope and costs of
remediation under a revised or replacement Corrective Action Plan have not yet
been determined and could be significant.

In April 2014, the Grand Canyon Trust filed a citizen suit in
federal district court for alleged violations of the Clean Air Act at the White
Mesa Mill. In October 2014, the plaintiffs were granted leave by the court to
add further purported violations to their April 2014 suit. The Complaint, as
amended, alleges that radon from one of the Mills tailings impoundments
exceeded the standard; that the mill is in violation of a requirement that only
two tailings impoundments may be in operation at any one time; and that certain
other violations related to the manner of measuring and reporting radon results
from one of the tailings impoundments occurred in 2013. The Complaint asks the
court to impose injunctive relief, civil penalties of up to $38 per day per
violation, costs of litigation including attorneys fees, and other relief. The
Company believes the issues raised in the Complaint are being addressed through
the proper regulatory channels and that the Company is currently in compliance
with all applicable regulatory requirements relating to those matters. The
Company intends to defend against all issues raised in the Complaint.

In March, 2013, the Center for Biological Diversity, the Grand
Canyon Trust, the Sierra Club and the Havasupai Tribe (the Plaintiffs) filed a
complaint in the U.S. District Court for the District of Arizona (the District
Court) against the Forest Supervisor for the Kaibab National Forest and the
U.S. Forest Service (the USFS) seeking an order (a) declaring that the USFS
failed to comply with environmental, mining, public land, and historic
preservation laws in relation to the Companys Canyon mine, (b) setting aside
any approvals regarding exploration and mining operations at the Canyon mine,
and (c) directing operations to cease at the mine and enjoining the USFS from
allowing any further exploration or mining-related activities at the Canyon mine
until the USFS fully complies with all applicable laws. In April 2013, the
Plaintiffs filed a Motion for Preliminary Injunction, which was denied by the
District Court in September, 2013. In October 2013, the Plaintiffs appealed the
District Courts Order to the 9th Circuit Court of Appeals, and filed
two Emergency Motions for an Injunction Pending Appeal. In November 2013, the
Company entered into a stipulation agreement with the Plaintiffs, which was
extended in November 2014, under which the Company has agreed to keep shaft
sinking operations on standby until the earlier of the date the District Court
issues a final appealable order on the merits of the Plaintiffs claims, or
April 15, 2015, and the Plaintiffs have agreed to stay their appeal and
Emergency Motions. In the meantime, proceedings on the merits of the case are
ongoing. Oral arguments were heard on March 18, 2015, and a judgment is expected
by the end of second quarter 2015. If the Plaintiffs are successful on the
merits, the Company may be required to maintain the mine on standby pending
resolution of the matter. Such a required prolonged stoppage of mine development
and mining activities could have a significant impact on future operations of
the Company.

40

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|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

In January, 2014 the Acoma Pueblo filed a notice of appeal and
separately filed a Complaint for Declaratory Judgment, in the Eleventh Judicial
District Court of McKinley County, New Mexico, challenging the permit to dewater
certain aquifers underlying the Companys proposed Roca Honda uranium mine site.
The Company does not believe the appeal and Complaint have merit and intends to
defend against those actions. If the appeal is successful, the likely outcome
would be remand of the permit back to the State Engineer for reconsideration or
possible withdrawal of the permit. The Company does not believe any such outcome
would materially affect the Companys financial position, results of operations
or cash flows. At the request of the parties, on July 10, 2014, the Court issued
an Order staying these proceedings for 90 days, which was extended by the Court
on October 10, 2014 and January 12, 2015, in each case for a further 90 days,
pending settlement negotiations of the parties. On February 27, 2015, the
parties settled this dispute, and the Acoma Pueblo has agreed to dismiss its
appeal and Complaint.

Mineral property commitments

The Company enters into commitments with federal and state
agencies and private individuals to lease mineral rights. These leases are
renewable annually and are expected to total $1,471 for the 12 months ended
December 31, 2015.

Surety bonds

The Company has indemnified third-party companies to provide
surety bonds as collateral for the Companys decommissioning liabilities. The
Company is obligated to replace this collateral in the event of a default, and
is obligated to repay any reclamation or closure costs due.

Commitments

The following table reflects the operating commitments on an
undiscounted basis as of December 31, 2014:

2015
    
    
    2016
    
    
    2017
    
    
    2018
    
    
    2019
    
    
    Thereafter
    
    
    TotalAs at December 31,
    
    **$**
    
    
    **$**
    
    
    **$**
    
    
    **$**
    
    
    **$**
    
    
    **$**
    
    
    **$**Rent
    
    304
    
    
    311
    
    
    291
    
    
    -
    
    
    -
    
    
    -
    
    
    906Office expenses
    
    31
    
    
    15
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    46Consumable materials
      contracts
    
    1,427
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    1,427U3O8 purchase contracts (1)
    
    11,813
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    11,813Decommissioning liabilities
    
    716
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    26,009
    
    
    26,72514,291
    
    
    326
    
    
    291
    
    
    -
    
    
    -
    
    
    26,009
    
    
    40,917


| | (1) | Contract for the purchase of 300,000 pounds of U3O8 that
      will be delivered to a customer in FY-2015 under one of its long-term
      contracts.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------

22.     FINANCIAL INSTRUMENTS AND RISK
MANAGEMENT

(a)      Fair value hierarchy:

Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value hierarchy establishes the
significance of the inputs used in making fair value measurements. The fair
value of financial assets and financial liabilities included in Level 1 are
determined by reference to quoted prices in active markets for identical assets
and liabilities.

The fair value of financial assets and financial liabilities in
Level 2 include valuations using inputs based on observable market data, either
directly or indirectly, other than quoted prices. Level 3 valuations are based
on inputs that are not based on observable market data. The Company has no
financial instruments measured at fair value categorized in Level 2 or 3
(valuation technique using non-observable market inputs) as at December 31,
2014.

41

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|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

(b)     Fair values:

As at December 31, 2014, the fair values of cash and cash
equivalents, restricted cash, short-term deposits, receivables, accounts payable
and accrued liabilities approximate their carrying values because of the
short-term nature of these instruments.

Financial assets and financial liabilities measured at fair
value on a recurring basis include:

|                             |   | Level 1 |  |   | Level 2 |  |  | Level 3 |  |  | Total  | 
|---------------------------- | - | ------- |  | - | ------- |  |  | ------- |  |  | ------ | 
|Marketable securities        |   | 284     |  |   | -       |  |  | -       |  |  | 284    | 
|Convertible
      debentures |   | 15,740  |  |   | -       |  |  | -       |  |  | 15,740 | 
|                             | $ | 16,024  |  | $ | - $     |  |  | - $     |  |  | 16,024 | 

(c)     Credit risk:

Credit risk relates to cash and cash equivalents and trade and
other receivables and arises 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 three multinational utilities. As at December 31, 2014,
the Companys maximum exposure to credit risk was the carrying value of cash and
cash equivalents, trade receivables and taxes recoverable.

(d)     Liquidity risk:

Liquidity risk is the risk the Company will not be able to meet
the obligations associated with its financial liabilities. The Company manages
liquidity risk through the management of its capital structure. The Company has
$33,611 of working capital as at December 31, 2014 (December 31, 2013 -
$33,481). Accounts payable and accrued liabilities, current portion of notes
payable and current taxes payable are due within the current operating year. The
Companys financial liabilities and other commitments are listed in Notes 13 and
20.

The following are the contractual maturities of financial
liabilities (undiscounted) outstanding as at December 31, 2014:

< 1 year
    
    
    1 to 2 years
    
    
    2 to 5 years
    
    
    Thereafter
    
    
    TotalAccounts payable and accrued liabilities
    $
    4,743
    
    $
    -
    
    $
    -
    
    $
    - $
    
    
    4,743Loans and
      borrowings
    $
    1,622
    
    $
    1,612
    
    $
    16,546
    
    $
    -
    
    
    19,780$
    6,365
    
    $
    1,612
    
    $
    16,546
    
    $
    - $
    
    
    24,523


(e)     Foreign 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.

The following table summarizes, in United States dollar
equivalents, the Companys major foreign currency (Cdn$) exposures as of
December 31, 2014:

|Cash and cash equivalents                | $ | 1,248   |  
|---------------------------------------- | - | ------- | -
|Accounts payable and accrued liabilities |   | (801    | )
|Loans and borrowings                     |   | (15,740 | )
|Total                                    | $ | (15,293 | )

42

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

The table below summarizes a sensitivity analysis for
significant unsettled currency risk exposure with respect to the Companys
financial instruments as at December 31, 2014 with all other variables held
constant. It shows how net income would have been affected by changes in the
relevant risk variable that were reasonably possible at that date.

Change for
    Increase (decrease) in otherSensitivity Analysis
    comprehensive incomeStrengthening net earnings
    +1% change in U.S.
      dollar
    $206Weakening
      net earnings
    -1% change in U.S. dollar
    ($206)


f)     Interest rate risk:

The Company is also exposed to an interest rate risk associated
with the convertible debentures which is based on the spot market price of
U3O8. The Company does not use derivatives to manage
interest rate risk. The following chart displays the interest rate at various
U3O8 price levels.

UxC U3O8
      Weekly Indicator Price
    Annual Interest RateUp to $54.99
    8.50%$55.00  $59.99
    9.00%$60.00  $64.99
    9.50%$65.00  $69.99
    10.00%$70.00  $74.99
    10.50%$75.00  $79.99
    11.00%$80.00  $84.99
    11.50%$85.00  $89.99
    12.00%$90.00  $94.99
    12.50%$95.00  $99.99
    13.00%$100 and above
    13.50%


(g)     Capital management:

The Companys objectives, when managing capital, are to
safeguard cash as well as maintain financial liquidity and flexibility in order
to preserve its ability to meet financial obligations and deploy capital to
develop its mining properties into production and to maintain investor, creditor
and market confidence to sustain the future development of the business. The
Company considers its capital structure to include share capital and working
capital.

|                     |  | December 31, |  |  | December 31, | 
|-------------------- |  | ------------ |  |  | ------------ | 
|                     |  | 2014         |  |  | 2013         | 
|                     |  | **$**        |  |  | $            | 
|Working Capital      |  | 38,604       |  |  | 33,481       | 
|Shareholders' equity |  | 96,858       |  |  | 137,133      | 

The Companys financial strategy is designed to maintain a
flexible capital structure consistent with the objectives stated above and to
respond to business growth opportunities and changes in economic conditions. In
order to maintain or adjust its capital structure, the Company may, from time to
time, issue new shares, issue new debt (secured, unsecured, convertible and/or
other types of debt instruments), acquire or dispose of assets or adjust its
capital spending to manage its ability to continue as a going concern.

As of December 31, 2014, the Company is not subject to any
externally imposed capital requirements.

43

---

|ENERGY FUELS INC.                                                                    
|-------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                       
|FOR THE 12 MONTHS ENDED DECEMBER 31, 2014 and 15 MONTHS
      ENDED DECEMBER 31, 2013
|(Expressed in thousands of U.S. Dollars except share and
      per share amounts)    
|                                                                                     

23.     SUBSEQUENT EVENTS

Issuance of stock options and restricted stock units
(RSU)

On January 28, 2015 the Company granted 133,150 stock options
and 153,850 RSUs to its employees, directors and consultants with an exercise
price of Cdn$5.85( $5.04) . The options carry a five year life and are vested as
follows: 50% immediately; 25% on January 28, 2016; 25% on January 28, 2017. The
RSUs vest as follows: 50% on January 28, 2016; 25% on January 28, 2017; and 25%
on January 28, 2018.

Acquisition of Uranerz Energy Corporation

On January 4, 2015, the Company entered into a definitive
agreement with Uranerz Energy Corporation (Uranerz) pursuant to which the
Company will acquire all of the issued and outstanding shares of common stock of
Uranerz. Under the terms of the definitive agreement, shareholders of Uranerz
will receive 0.255 common shares of the Company for each share of Uranerz common
stock held or 24,453,303 shares. Based on the common shares outstanding of both
the Company and Uranerz, the Companys shareholders will own approximately 45%
of the shares of the Company upon completion of the transaction and Uranerz
shareholders will own approximately 55% of the common shares of the Company.

The Uranerz transaction will be carried out by way of a merger
of Uranerz with, and into, a subsidiary of Energy Fuels under Nevada Law. The
transaction will be subject to the approval of at least a majority of the
holders of the outstanding common shares of Uranerz, as well as at least a
majority of the votes cast by Uranerz shareholders, excluding directors and
officers of Uranerz. The transaction is also subject to the approval of at least
a majority of the votes cast by the Companys shareholders.

The transaction is expected to be completed in the second
quarter of 2015.

44

---