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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2016

OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period
from to

Commission file number: 001-36204



Energy Fuels Inc.(Exact
Name of Registrant as Specified in its Charter)

|Ontario                                                | 98-1067994                          
|------------------------------------------------------ | ------------------------------------
|(State or other jurisdiction of
      incorporation or | (I.R.S. Employer Identification No.)
|organization)                                          |                                     
|                                                       |                                     
|225 Union Blvd., Suite 600                             |                                     
|Lakewood, Colorado                                     | 80228                               
|(Address of Principal Executive Offices)               | (Zip Code)                          

(303) 389-4130  (Registrants
Telephone Number, including Area Code)

Indicate by checkmark whether the
registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes
[X]     No [   ]

Indicate by check mark whether the
Registrant has submitted electronically and posted
on its corporate Web site, if any, every Interactive Data
File required to be submitted and posted pursuant to Rule
405 of Regulation S-T (§ 229.405 of this chapter) during the
preceding 12 months (or for such shorter period that
the registrant was required to submit and post such
files). Yes [   ]     No [X]

Indicate by check mark whether the registrant is
a large accelerated filer, an accelerated filer, or a
non-accelerated filer. See definition of Accelerated filer and
large accelerated filer in Rule 12b-2 of the
Exchange Act (Check one):

|Large Accelerated Filer [   ] | Accelerated Filer [X] | Non-Accelerated Filer
      [   ] | Smaller Reporting Company
  [   ]
|----------------------------- | --------------------- | --------------------------------- | ---------------------------------

1

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Indicate by check mark whether the registrant is
a shell company (as defined in Rule 12b-2 of the Exchange
Act): Yes [   ]     No [X]

Indicate the number of shares outstanding
of each of the issuers classes of common stock, as of
the latest practical date: 
51,890,415 common shares,
without par value, outstanding as of May 5, 2016.

2

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|ENERGY FUELS INC.                   
|------------------------------------
|FORM 10-Q                           
|For the Quarter Ended March 31, 2016
|INDEX                               

|                                                                                                                | Page
|--------------------------------------------------------------------------------------------------------------- | ----
|PART I  FINANCIAL
      INFORMATION                                                                           
|ITEM
      1. CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS                                                 | 7   
|ITEM
      2. MANAGEMENTS DISCUSSION AND ANALYSIS OF
      FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS | 25  
|ITEM
      3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
      MARKET RISK                                  | 35  
|ITEM
      4. CONTROLS AND PROCEDURES                                                                           | 37  
|PART II  OTHER INFORMATION                                                                                    
|ITEM
      1. LEGAL PROCEEDINGS                                                                                 | 37  
|ITEM
      1A. RISK FACTORS                                                                                     | 37  
|ITEM
      2. UNREGISTERED SALES OF EQUITY SECURITIES AND
      USE OF PROCEEDS                                 | 37  
|ITEM
      3. DEFAULTS UPON SENIOR SECURITIES                                                                   | 38  
|ITEM
      4. MINE SAFETY DISCLOSURE                                                                            | 38  
|ITEM
      5. OTHER INFORMATION                                                                                 | 38  
|ITEM
      6. EXHIBITS                                                                                          | 39  
|SIGNATURES                                                                                                     

3

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Cautionary Statement Regarding Forward-Looking
Information

This Quarterly Report and the exhibits attached
hereto (the Quarterly Report) contain
forward-looking statements within the meaning of
applicable US and Canadian securities laws. Such forward-looking
statements concern Energy Fuels Inc.s (the Companys or
Energy Fuels) anticipated results and progress of the
Companys operations in future periods, planned
exploration, and, if warranted, development of its
properties, plans related to its business, and other
matters that may occur in the future. These statements
relate to analyses and other information that are
based on forecasts of future results, estimates of
amounts not yet determinable and assumptions of
management.

Any statements that express or involve
discussions with respect to predictions,
expectations, beliefs, plans, projections, objectives,
schedules, assumptions, future events, or performance
(often, but not always, using words or phrases such
as expects or does not expect, is expected,
anticipates or does not anticipate, plans,
estimates or intends, or stating that certain actions, events
or results may, could, would, might or
will be taken, occur or be achieved) are not statements
of historical fact and may be forward-looking statements.

Forward-looking statements are based on
the opinions and estimates of management as of the date such
statements are made. Energy Fuels believes that the
expectations reflected in this forward-looking
information are reasonable, but no assurance can be given
that these expectations will prove to be correct,
and such forward-looking information included in, or
incorporated by reference into, this Quarterly
Report should not be unduly relied upon. This
information speaks only as of the date of this Quarterly
Report.

Readers are cautioned that it would be
unreasonable to rely on any such forward-looking
statements and information as creating any legal rights, and that
the statements and information are not guarantees and
may involve known and unknown risks and
uncertainties, and that actual results are likely to differ
(and may differ materially) and objectives and strategies
may differ or change from those expressed or implied in the
forward-looking statements or information as a result of
various factors. Such risks and uncertainties include risks
generally encountered in the exploration,
development, operation, and closure of mineral properties
and processing facilities. Forward-looking
statements are subject to a variety of known and unknown
risks, uncertainties and other factors which could cause actual
events or results to differ from those expressed or implied
by the forward-looking statements, including, without
limitation:

| | risks associated with mineral reserves and
      resource estimates, including the risk of errors in
  assumptions or methodologies;                                                                                                                                                                                                      
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | risks associated with estimating mineral
      extraction and recovery, forecasting future price levels
      necessary to support mineral extraction and recovery, and
      the Companys ability to increase mineral
      extraction and recovery in response to any
      increases in commodity prices or other market
  conditions;
| | uncertainties and liabilities inherent
      to conventional mineral extraction and
      recovery and/or in-situ uranium recovery
  operations;                                                                                                                                                                                          
| | geological, technical and processing
      problems, including unanticipated metallurgical
      difficulties, less than expected recoveries, ground
      control problems, process upsets, and/or equipment
  malfunctions;                                                                                                             
| | risks associated with labor costs, labor
      disturbances, and unavailability of skilled labor;                                                                                                                                                                                                                                         
| | risks associated with the availability
      and/or fluctuations in the costs of raw materials
      and consumables used in the Company's production
  processes;                                                                                                                                                                        
| | risks associated with environmental
      compliance and permitting, including those
      created by changes in environmental
      legislation and regulation, and delays in obtaining
      permits and licenses that could impact expected mineral extraction
  and recovery levels and costs;                                        
| | actions taken by regulatory
      authorities with respect to mineral extraction and
  recovery activities;                                                                                                                                                                                                                               
| | risks associated with the Companys
      dependence on third parties in the provision of
      transportation and other critical services;                                                                                                                                                                                               
| | risks associated with the ability of the
      Company to extend or renew land tenure, including
      mineral leases and surface use agreements, on
  favorable terms or at all;                                                                                                                                                         

4

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| | risks associated with the ability of the
      Company to negotiate access rights on certain properties on favorable
      terms or at all;                                   
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | the adequacy of insurance coverage;                                                                                                                                           
| | uncertainty as to reclamation and
      decommissioning liabilities;                                                                                                          
| | the ability of the Companys bonding companies to require
      increases in the collateral required to secure reclamation obligations;                                       
| | the potential for, and outcome of, litigation and other
      legal proceedings, including potential injunctions pending the outcome of
      such litigation and proceedings;
| | the ability of the Company to meet its
      obligations to its creditors;                                                                                                    
| | risks associated with paying off indebtedness
      at its maturity;                                                                                                          
| | risks associated with the Companys
      relationships with its business and joint venture partners;                                                                         
| | failure to obtain industry partner, government,
      and other third party consents and approvals, when required;                                                            
| | competition for, among other things, capital,
      mineral properties, and skilled personnel;                                                                                
| | failure to complete proposed acquisitions and
      incorrect assessments of the value of completed acquisitions;                                                             
| | risks posed by fluctuations in share price
      levels, exchange rates and interest rates, and general economic
      conditions;                                            
| | risks inherent in the Companys and industry
      analysts forecasts or predictions of future uranium and vanadium price
      levels;                                      
| | fluctuations in the market prices of uranium
      and vanadium, which are cyclical and subject to substantial price
      fluctuations;                                      
| | failure to obtain suitable uranium sales terms,
      including spot and term sale contracts;                                                                                 
| | risks associated with asset impairment as a
      result of market conditions;                                                                                                
| | risks associated with lack of access to markets
      and the ability to access capital;                                                                                      
| | the market price of Energy Fuels securities;                                                                                                                                 
| | public resistance to nuclear energy or uranium
      extraction and recovery;                                                                                                 
| | uranium industry competition and international
      trade restrictions;                                                                                                      
| | risks related to higher than expected costs
      related to our Nichols Ranch Project and Canyon Project;                                                                    
| | risks related to securities regulations;                                                                                                                                      
| | risks related to stock price and volume
      volatility;                                                                                                                     
| | risks related to our ability to maintain our
      listing on the NYSE MKT and Toronto Stock Exchanges;                                                                       
| | risks related to our ability to maintain our
      inclusion in various stock indices;                                                                                        
| | risks related to dilution of currently
      outstanding shares;                                                                                                              
| | risks related to our lack of dividends;                                                                                                                                       
| | risks related to recent market events;                                                                                                                                        
| | risks related to our issuance of additional
      common shares;                                                                                                              
| | risks related to acquisition and integration
      issues;                                                                                                                    
| | risks related to defects in title to our
      mineral properties;                                                                                                            
| | risks related to our outstanding debt; and                                                                                                                                    
| | risks related to our securities.                                                                                                                                              

Although we have attempted to identify important factors that
could cause actual results to differ materially from those described in
forward-looking statements, there may be other factors that cause results not to
be as anticipated, estimated or intended. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, believed, estimated,
or expected. We caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made. Except as
required by law, we disclaim any obligation to subsequently revise any
forward-looking statements to reflect events or circumstances after the date of
such statements or to reflect the occurrence of anticipated or unanticipated
events. Statements relating to Mineral Reserves or Mineral Resources are
deemed to be forward-looking information, as they involve the implied
assessment, based on certain estimates and assumptions, that the Mineral
Reserves and Mineral Resources described may be profitably extracted in the
future.

5

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We qualify all the forward-looking statements contained
in this Quarterly Report by the foregoing cautionary
statements.

Cautionary Note to United States Investors Concerning
Disclosure of Mineral Resources

This Quarterly Report contains certain disclosure that has been
prepared in accordance with the requirements of Canadian securities laws, which
differ from the requirements of United States securities laws. Unless otherwise
indicated, all reserve and resource estimates included in this Quarterly Report,
and in the documents incorporated by reference herein, have been prepared in
accordance with Canadian National Instrument 43-101 - Standards of
Disclosure for Mineral Projects(NI 43-101) and the Canadian
Institute of Mining, Metallurgy and Petroleum (CIM) classification system. NI
43-101 is a rule developed by the Canadian Securities Administrators (the
CSA) which establishes standards for all public disclosure an issuer makes of
scientific and technical information concerning mineral projects. As a company
incorporated in Canada, we estimate and report our resources and our current
reserves according to the definitions set forth in NI 43-101.

Canadian standards, including NI 43-101, differ significantly
from the requirements of the United States Securities and Exchange Commission
(the SEC), and reserve and resource information contained herein, or
incorporated by reference in this Quarterly Report, and in the documents
incorporated by reference herein, may not be comparable to similar information
disclosed by companies reporting under only United States standards. In
particular, and without limiting the generality of the foregoing, the term
resource does not equate to the term reserve under SEC Industry Guide 7.
Under United States standards, mineralization may not be classified as a
reserve unless the determination has been made that the mineralization could
be economically and legally produced or extracted at the time the reserve
determination is made. Under SEC Industry Guide 7 standards, a final or
bankable feasibility study is required to report reserves; the three-year
historical average price, to the extent possible, is used in any reserve or cash
flow analysis to designate reserves; and the primary environmental analysis or
report must be filed with the appropriate governmental authority.

The SECs disclosure standards under Industry Guide 7 normally
do not permit the inclusion of information concerning measured mineral
resources, indicated mineral resources or inferred mineral resources or
other descriptions of the amount of mineralization in mineral deposits that do
not constitute reserves by United States standards in documents filed with the
SEC. United States investors should also understand that inferred mineral
resources have a great amount of uncertainty as to their existence and as to
their economic and legal feasibility. It cannot be assumed that all or any part
of an inferred mineral resource will ever be upgraded to a higher category.
Under Canadian rules, estimated inferred mineral resources may not form the
basis of feasibility or prefeasibility studies. United States investors are
cautioned not to assume that all or any part of measured or indicated mineral
resources will ever be converted into mineral reserves. Investors are cautioned
not to assume that all or any part of an inferred mineral resource exists or
is economically or legally mineable.

Disclosure of contained pounds or contained ounces in a
resource estimate is permitted disclosure under Canadian regulations; however,
the SEC normally only permits issuers to report mineralization that does not
constitute reserves by SEC standards as in-place tonnage and grade without
reference to unit measures. The requirements of NI 43-101 for identification of
reserves are also not the same as those of the SEC, and reserves reported by
the Company in compliance with NI 43-101 may not qualify as reserves under SEC
Industry Guide 7 standards. Accordingly, information concerning mineral deposits
set forth herein may not be comparable to information made public by companies
that report in accordance with United States standards.

6

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PART I

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.



7

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|ENERGY FUELS INC.                                                                 
|----------------------------------------------------------------------------------
|Consolidated Statements of Operations and Comprehensive
      Loss                
|(unaudited)
      (Expressed in thousands of US dollars, except per share amounts)

|                                                                      |   | For the
      three months ended |  
|--------------------------------------------------------------------- | - | -------------------------------- | -
|                                                                      |   | March 31,                        |  
|                                                                      |   | 2016                             |  
|                                                                      |   |                                  |  
|Revenue (Note 12)                                                     | $ | 17,996                           |  
|Costs and expenses applicable to
      revenue                        |   | 12,143                           |  
|Development, permitting
      and land holding                        |   | 7,442                            |  
|Standby costs                                                         |   | 2,166                            |  
|Accretion of asset
      retirement obligation                        |   | 175                              |  
|Selling costs                                                         |   | 74                               |  
|Intangible asset
      amortization                                   |   | 219                              |  
|General and administration                                            |   | 3,828                            |  
|Costs directly attributable to acquisitions                           |   | 326                              |  
|Total operating loss                                                  |   | (8,377                           | )
|                                                                      |   |                                  |  
|Interest expense                                                      |   | (576                             | )
|Other income (expense) (Note 12)                                      |   | 88                               |  
|Net loss                                                              |   | (8,865                           | )
|                                                                      |   |                                  |  
|Items that may be reclassified in the
      future to profit and loss |   |                                  |  
|Foreign currency translation
      adjustment                         |   | (801                             | )
|Unrealized gain on available-for-sale assets                          |   | 83                               |  
|Other comprehensive income (loss)                                     |   | (718                             | )
|Comprehensive income (loss)                                           | $ | (9,583                           | )
|                                                                      |   |                                  |  
|Net loss attributable to:                                             |   |                                  |  
|Owners of the Company                                                 | $ | (8,808                           | )
|Non-controlling interests                                             |   | (57                              | )
|                                                                      | $ | (8,865                           | )
|Comprehensive income (loss) attributable
      to:                    |   |                                  |  
|Owners of the Company                                                 | $ | (9,526                           | )
|Non-controlling interests                                             |   | (57                              | )
|                                                                      | $ | (9,583                           | )
|                                                                      |   |                                  |  
|Basic and diluted loss per share (Note 10)                            |   | ($0.19                           | )

See accompanying notes to the consolidated financial
statements.

8

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|ENERGY FUELS INC.                                                     
|----------------------------------------------------------------------
|Consolidated Balance Sheets                                           
|(Expressed in
      thousands of US dollars, except per share amounts)

|                                                                                                                                                                                                                              |   | As at          |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | -------------- | -
|                                                                                                                                                                                                                              |   | March 31, 2016 |  
|                                                                                                                                                                                                                              |   | (unaudited)    |  
|**ASSETS**                                                                                                                                                                                                                    |   |                |  
|                                                                                                                                                                                                                              |   |                |  
|Current assets                                                                                                                                                                                                                |   |                |  
|Cash and cash equivalents                                                                                                                                                                                                     | $ | 16,503         |  
|Trade and other
      receivables (Note 3)                                                                                                                                                                                    |   | 9,270          |  
|Inventories (Note 4)                                                                                                                                                                                                          |   | 23,081         |  
|Prepaid expenses and
      other assets                                                                                                                                                                                       |   | 1,369          |  
|Mineral properties held for sale                                                                                                                                                                                              |   | -              |  
|Total current assets                                                                                                                                                                                                          |   | 50,223         |  
|                                                                                                                                                                                                                              |   |                |  
|Notes receivable and
      other (Note 3)                                                                                                                                                                                     |   | 1,209          |  
|Plant and equipment (Note 6)                                                                                                                                                                                                  |   | 27,915         |  
|Mineral properties
      (Note 6)                                                                                                                                                                                             |   | 91,000         |  
|Intangible assets (Note 5)                                                                                                                                                                                                    |   | 8,899          |  
|Restricted cash                                                                                                                                                                                                               |   | 12,982         |  
|Total assets                                                                                                                                                                                                                  | $ | 192,228        |  
|                                                                                                                                                                                                                              |   |                |  
|LIABILITIES & EQUITY                                                                                                                                                                                                          |   |                |  
|                                                                                                                                                                                                                              |   |                |  
|Current liabilities                                                                                                                                                                                                           |   |                |  
|Accounts payable and
      accrued liabilities                                                                                                                                                                                | $ | 6,578          |  
|Warrant liabilities (Note 9)                                                                                                                                                                                                  |   | 2,116          |  
|Current portion of
      asset retirement obligation (Note 7)                                                                                                                                                                 |   | 751            |  
|Current portion of loans and borrowings (Note 8)                                                                                                                                                                              |   | 3,309          |  
|Total current
      liabilities                                                                                                                                                                                               |   | 12,754         |  
|                                                                                                                                                                                                                              |   |                |  
|Deferred revenue                                                                                                                                                                                                              |   | 2,397          |  
|Asset retirement obligation (Note 7)                                                                                                                                                                                          |   | 7,749          |  
|Loans and borrowings (Note 8)                                                                                                                                                                                                 |   | 29,306         |  
|Total liabilities                                                                                                                                                                                                             |   | 52,206         |  
|                                                                                                                                                                                                                              |   |                |  
|Equity                                                                                                                                                                                                                        |   |                |  
|Share capital (Note
      9)      Common shares, without par
      value, unlimited shares authorized; shares issued and
      outstanding 
           51,890,415 at March 31,
      2016 and 46,519,132 at December 31, 2015 |   | 384,052        |  
|Accumulated Deficit                                                                                                                                                                                                           |   | (250,916       | )
|Accumulated other comprehensive income                                                                                                                                                                                        |   | 2,787          |  
|Total shareholders' equity                                                                                                                                                                                                    |   | 135,923        |  
|Non-controlling interests                                                                                                                                                                                                     |   | 4,099          |  
|Total equity                                                                                                                                                                                                                  |   | 140,022        |  
|Total liabilities and equity                                                                                                                                                                                                  | $ | 192,228        |  

Commitments and contingencies (Note 13)

See accompanying notes to the consolidated financial
statements.

9

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|ENERGY FUELS INC.                                                     
|----------------------------------------------------------------------
|Consolidated Statements of Cash Flows                                 
|(Expressed in
      thousands of US dollars, except per share amounts)

|                                                                              |   | For the
      three months ended |  
|----------------------------------------------------------------------------- | - | -------------------------------- | -
|                                                                              |   | March 31,                        |  
|                                                                              |   | 2016                             |  
|                                                                              |   |                                  |  
|OPERATING ACTIVITIES                                                          |   |                                  |  
|Net loss for the period                                                       | $ | (8,865                           | )
|Items not involving
      cash:                                               |   |                                  |  
|Depletion, depreciation
      and amortization                                |   | 318                              |  
|Stock-based compensation (Note 9)                                             |   | 666                              |  
|Change in value of
      convertible debentures (Note 8)                      |   | 561                              |  
|Accretion
      of asset retirement obligation (Note 7)                       |   | 175                              |  
|Unrealized foreign gains
      (losses)                                       |   | (207                             | )
|Miscellaneous non-cash income (expenses)                                      |   | (697                             | )
|Change in value of
      investments                                          |   | (38                              | )
|Changes in assets and
      liabilities                                       |   |                                  |  
|(Increase) decrease in
      inventories                                      |   | 8,736                            |  
|(Increase) decrease in trade and other receivables                            |   | (6,501                           | )
|(Increase) decrease in
      prepaid expenses and other assets                |   | 370                              |  
|Increase
      (decrease) in accounts payable and accrued liabilities         |   | (3,205                           | )
|Changes in deferred revenue                                                   |   | 232                              |  
|Cash paid for reclamation and remediation activities
      (Note 7)           |   | (248                             | )
|                                                                              |   | (8,703                           | )
|INVESTING ACTIVITIES                                                          |   |                                  |  
|Purchase of mineral properties and
      property, plant and equipment        |   | (93                              | )
|Sale of mineral properties held for sale                                      |   | 845                              |  
|                                                                              |   | 752                              |  
|FINANCING ACTIVITIES                                                          |   |                                  |  
|Issuance of common shares for cash                                            |   | 11,503                           |  
|Option and warrant
      exercises                                            |   | 3                                |  
|Repayment of loans and borrowings                                             |   | (808                             | )
|                                                                              |   | 10,698                           |  
|                                                                              |   |                                  |  
|INCREASE IN CASH AND CASH
      EQUIVALENTS DURING THE PERIOD                 |   | 2,747                            |  
|Effect of exchange rate fluctuations on
      cash held in foreign currencies |   | 791                              |  
|Cash and cash equivalents - beginning of period                               |   | 12,965                           |  
|CASH AND CASH EQUIVALENTS - END OF PERIOD                                     | $ | 16,503                           |  
|                                                                              |   |                                  |  
|Non-cash investing and financing
      transactions:                          |   |                                  |  
|Issuance of secured
      notes for acquisition of mineral properties         |   | -                                |  

See accompanying notes to the consolidated financial
statements

10

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|ENERGY FUELS INC.                                                                              
|-----------------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (unaudited)                               
|FOR THE THREE MONTHS ENDED MARCH 31, 2016                                                      
|(Tabular amounts expressed in thousands of US Dollars
      except share and per share amounts)
|                                                                                               

1. THE COMPANY AND DESCRIPTION OF BUSINESS

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

Energy Fuels Inc. and its subsidiary companies (collectively
the Company or EFI) are engaged in uranium extraction, recovery and sales of
uranium from mineral properties and the recycling of uranium bearing materials
generated by third parties. As a part of these activities the Company also
acquires, explores, evaluates and, if warranted, permits uranium properties. The
Companys final uranium product, uranium oxide concentrates
(U3O8 or uranium concentrates), is sold to customers
for further processing into fuel for nuclear reactors.

The Company is an exploration stage mining company as defined
by the United States (US) Securities and Exchange Commission (SEC) Industry
Guide 7 (the SEC Industry Guide 7) as it has not established the existence of
proven or probable reserves on any of our properties.

2. BASIS OF PRESENTATION

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

The interim consolidated financial statements included herein
have been prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission (SEC). Certain
information and note disclosures normally included in financial statements
prepared in accordance with  U.S. GAAP has been condensed or omitted pursuant to
such rules and regulations, although the Company believes that the disclosures
included are adequate to make the information presented not misleading.

In managements opinion, these unaudited interim financial
reflect all adjustments, consisting solely of normal recurring items, which are
necessary for the fair presentation of the Companys financial position, results
of operations and cash flows on a basis consistent with that of the Companys
prior audited consolidated financial statements. However, the results of
operations for the interim periods may not be indicative of results to be
expected for the full fiscal year. Therefore these unaudited interim financial
statements should be read in conjunction with the audited financial statements
and notes thereto and summary of significant accounting policies included in the
Companys annual report on Form 10-K for the year ended December 31, 2015.

The consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries. All inter-company accounts and
transactions have been eliminated.

Recently Adopted Accounting Pronouncements

Fair value measurement

In May 2015, ASU No. 2015-07 was issued related to investments
for which fair value is measured, or are eligible to be measured, using the net
asset value per share practical expedient. This update removes the requirement
to categorize within the fair value hierarchy all investments for which fair
value is measured using the net asset value per share practical expedient. The
amendment also removes certain disclosure requirements for these investments.
This update will impact the annual disclosure related to pension plan assets
measured at fair value. This update is effective in fiscal years, including
interim periods, beginning after December 15, 2015. Adoption of this guidance
effective January 1, 2016 had no impact on the Consolidated Financial
Statements.

Debt issuance costs

In April 2015, ASU No. 2015-03 was issued related to debt
issuance costs. This update simplifies the presentation of debt issuance costs
by requiring debt issuance costs to be presented as a deduction from the
corresponding debt liability. The update is effective in fiscal years, including
interim periods, beginning after December 15, 2015. Adoption of this guidance
effective January 1, 2016 had no impact on the Consolidated Financial
Statements.

11

---

|ENERGY FUELS INC.                                                                              
|-----------------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (unaudited)                               
|FOR THE THREE MONTHS ENDED MARCH 31, 2016                                                      
|(Tabular amounts expressed in thousands of US Dollars
      except share and per share amounts)
|                                                                                               

Consolidations

In February 2015, ASU No. 2015-02 was issued related to
consolidations. This update makes some targeted changes to current consolidation
guidance and impacts both the voting and the variable interest consolidation
models. In particular, the update changes how companies determine whether
limited partnerships or similar entities are variable interest entities. The
update is effective in fiscal years, including interim periods, beginning after
December 15, 2015. The adoption of this guidance effective January 1, 2016 had
no impact on the Consolidated Financial Statements or disclosures.

Recently Issued Accounting Pronouncements not yet
adopted

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

Inventory

In July 2015, ASU 2015-11 was issued related to inventory
simplifying the subsequent measurement of inventories by replacing the lower of
cost or market test with a lower of cost and net realizable value test. The
update is effective in fiscal years, including interim periods, beginning after
December 15, 2016, and early adoption is permitted. The Company is currently
evaluating this guidance and the impact it will have on the financial
statements.

Investments

In January 2016, ASU No. 2016-01 was issued related to
financial instruments. The new guidance requires entities to measure equity
investments that do not result in consolidation and are not accounted for under
the equity method at fair value and recognize any changes in fair value in net
income. This new guidance also updates certain disclosure requirements for these
investments. This update is effective in fiscal years, including interim
periods, beginning after December 15, 2017, and early adoption is not permitted.
The Company is currently evaluating this guidance and the impact it will have on
the financial statements.

Leases

In February 2016, the FASB issued ASU 2016-02 which core
principle is that a lessee should recognize the assets and the liabilities that
arise from leases, including operating leases. Under the new requirements, a
lessee will recognize in the statement of financial position a liability to make
lease payments (the lease liability) and the right-of-use asset representing the
right to the underlying asset for the lease term. For leases with a term of
twelve months or less, the lessee is permitted to make an accounting policy
election by class of underlying asset not to recognize lease assets and lease
liabilities. The recognition, measurement, and presentation of expenses and cash
flows arising from a lease by a lessee have not significantly changed from the
previous GAAP. The standard is effective for fiscal years beginning after
December 15, 2018, including interim periods within such fiscal year, with early
adoption permitted. The ASU requires a modified retrospective transition method
with the option to elect a package of practical expedients. The Company is
evaluating the effect of this amendment and the impact it will have on the
Companys financial statements.

Revenue recognition

In May 2014, ASU 2015-14 was issued related to revenue from
contracts with customers. The new standard provides a five-step approach to be
applied to all contracts with customers and also requires expanded disclosures
about revenue recognition. In August 2015, the effective date was deferred to
reporting periods, including interim periods, beginning after December 15, 2017,
and will be applied retrospectively. Early adoption is not permitted. The
Company is currently evaluating this guidance and the impact it will have on the
Companys financial statements.

Deferred Income Taxes

In November 2015, the ASU 2015-17 related to the presentation
of deferred income taxes in the statement of financial position by requiring
that deferred tax liabilities and assets be classified as noncurrent. The update
is effective in fiscal years, including interim periods beginning
on or after December 15, 2016. The Company does not expect the updated guidance
to have an impact on the Companys financial statements.

12

---

|ENERGY FUELS INC.                                                                              
|-----------------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (unaudited)                               
|FOR THE THREE MONTHS ENDED MARCH 31, 2016                                                      
|(Tabular amounts expressed in thousands of US Dollars
      except share and per share amounts)
|                                                                                               

Going Concern

In August 2014, ASC 205-40guidance was amended to
provide guidance about managements responsibility to evaluate whether there is
substantial doubt about an entitys ability to continue as a going concern and
to provide related footnote disclosures.The amendments require
management to assess an entitys ability to continue as a going concern by
incorporating and expanding upon certain principles that are currently in US
auditing standards. Specifically, the amendments (1) provide a definition of the
term substantial doubt, (2) require an evaluation every reporting period
including interim periods, (3) provide principles for considering the mitigating
effect of managements plans, (4) require certain disclosures when substantial
doubt is alleviated as a result of consideration of managements plans, (5)
require an express statement and other disclosures when substantial doubt is not
alleviated, and (6) require an assessment for a period of one year after the
date that the financial statements are issued (or available to be issued). The
amendments in this update shall be effective for annual periods ending after
December 15, 2016, and interim periods within annual periods beginning after
December 15, 2016, with early application permitted. The Company is currently
evaluating this guidance and the impact on the Companys financial
statements.

Financial instruments

In January 2016, ASU 2016-01 was issued related to financial
instruments. The update intends to enhance the reporting model for financial
instruments to provide users of financial instruments with more decision-useful
information and addresses certain aspects of the recognition, measurement,
presentation, and disclosure of financial instruments. The update is effective
in fiscal years, including interim periods beginning on or after December 15,
2017. The Company is currently evaluating this guidance and the impact it will
have on the financial statements.

3. RECEIVABLES

|                                                    |   | March 31, |  |   | December 31, | 
|--------------------------------------------------- | - | --------- |  | - | ------------ | 
|                                                    |   | 2016      |  |   | 2015         | 
|Current                                             |   |           |  |   |              | 
|Trade receivables - mineral
      concentrate sales | $ | 8,345     |  | $ | 1,868        | 
|Trade receivables - other                           |   | 925       |  |   | 749          | 
|                                                    | $ | 9,270     |  | $ | 2,617        | 
|Non-current                                         |   |           |  |   |              | 
|Notes receivable and other (1)                      | $ | 1,209     |  | $ | 1,096        | 
|                                                    | $ | 1,209     |  | $ | 1,096        | 

| | (1) | During the year ended December 31, 2014 the Company
      received two notes with the principal totaling $1.05 million 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. The Company has
      setup a reserve of $0.22 million (2015 - $0.22 million) against the
      collectability of these receivables.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

13

---

|ENERGY FUELS INC.                                                                              
|-----------------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (unaudited)                               
|FOR THE THREE MONTHS ENDED MARCH 31, 2016                                                      
|(Tabular amounts expressed in thousands of US Dollars
      except share and per share amounts)
|                                                                                               

4. INVENTORIES

|                                        |   | March 31, |  |   | December 31, | 
|--------------------------------------- | - | --------- |  | - | ------------ | 
|                                        |   | 2016      |  |   | 2015         | 
|Concentrates and
      work-in-progress | $ | 11,293    |  | $ | 19,900       | 
|Inventory of ore in stockpiles          |   | 8,798     |  |   | 7,767        | 
|Raw materials and consumables           |   | 2,990     |  |   | 3,004        | 
|                                        | $ | 23,081    |  | $ | 30,671       | 

5. INTANGIBLE ASSETS

The following is a summary of changes in intangible assets
related to favorable sales contracts acquired in business combinations:

|                                                                                |   | March 31, |  |   | December 31, | 
|------------------------------------------------------------------------------- | - | --------- |  | - | ------------ | 
|Sales Contracts                                                                 |   | 2016      |  |   | 2015         | 
|Cost                                                                            |   |           |  |   |              | 
|Balance at beginning of period                                                  | $ | 26,451    |  | $ | 15,851       | 
|Sales contracts acquired in the acquisition
      of Uranerz Energy Corporation |   | -         |  |   | 10,600       | 
|Balance, end of period                                                          |   | 26,451    |  |   | 26,451       | 
|                                                                                |   |           |  |   |              | 
|Accumulated amortization, beginning of period                                   |   | 17,334    |  |   | 11,970       | 
|Amortization of sales contracts                                                 |   | 218       |  |   | 5,364        | 
|Accumulated amortization, end of period                                         |   | 17,552    |  |   | 17,334       | 
|                                                                                |   |           |  |   |              | 
|Net
      book value                                                            | $ | 8,899     |  | $ | 9,117        | 

6. PLANT AND EQUIPMENT AND MINERAL PROPERTIES

The following is a summary of plant and equipment:

|                          |   |        |  |   | March 31,    |   |   |                |  |   |        |  |   | December 31, |   |   |          | 
|------------------------- | - | ------ |  | - | ------------ | - | - | -------------- |  | - | ------ |  | - | ------------ | - | - | -------- | 
|                          |   |        |  |   | 2016         |   |   |                |  |   |        |  |   | 2015         |   |   |          | 
|                          |   |        |  |   | Accumulated  |   |   |                |  |   |        |  |   | Accumulated  |   |   | Net Book | 
|                          |   | Cost   |  |   | Depreciation |   |   | Net Book Value |  |   | Cost   |  |   | Depreciation |   |   | Value    | 
|Plant and
      equipment |   |        |  |   |              |   |   |                |  |   |        |  |   |              |   |   |          | 
|Nichols Ranch             | $ | 29,210 |  | $ | (3,472       | ) | $ | 25,738         |  | $ | 29,210 |  | $ | (2,370       | ) | $ | 26,840   | 
|Equipment and other       |   | 13,198 |  |   | (11,021      | ) |   | 2,177          |  |   | 13,107 |  |   | (10,878      | ) |   | 2,229    | 
|Plant and equipment total | $ | 42,408 |  | $ | (14,493      | ) | $ | 27,915         |  | $ | 42,317 |  | $ | (13,248      | ) | $ | 29,069   | 

The net book value for Nichols Ranch includes the value
ascribed to the processing plant and equipment. The mineral properties acquired
as part of the acquisition of Uranerz Energy Corporation ("Uranerz") in 2015 are recorded as
mineral properties, as the Company does not have proven and probable reserves
under SEC Industry Guide 7. Accordingly, all subsequent expenditures at the
Nichols Ranch plant and equipment, which do not have any alternative use, and
expenditures on mineral properties are expensed as incurred.

For the three months ended March 31, 2016, the Company recorded
$1.10 million (2015Nil) of depreciation expense related to Nichols Ranch, which
is included in the costs and expenses applicable to revenue in the Statement of
the operations and comprehensive income for the three months ended March 31,
2016.

14

---

|ENERGY FUELS INC.                                                                              
|-----------------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (unaudited)                               
|FOR THE THREE MONTHS ENDED MARCH 31, 2016                                                      
|(Tabular amounts expressed in thousands of US Dollars
      except share and per share amounts)
|                                                                                               

The following is a summary of mineral properties:

|                         |   | March 31, |  |   | December 31, | 
|------------------------ | - | --------- |  | - | ------------ | 
|                         |   | 2016      |  |   | 2015         | 
|Mineral properties       |   |           |  |   |              | 
|In-situ Recovery         |   |           |  |   |              | 
|Uranerz ISR properties   | $ | 36,065    |  | $ | 36,096       | 
|In-situ Recovery total   | $ | 36,065    |  | $ | 36,096       | 
|Conventional             |   |           |  |   |              | 
|Sheep Mountain           |   | 34,183    |  |   | 34,183       | 
|Roca
      Honda         |   | 19,465    |  |   | 19,465       | 
|Other                    |   | 1,287     |  |   | 1,287        | 
|Conventional total       |   | 54,935    |  |   | 54,935       | 
|Mineral Properties total | $ | 91,000    |  | $ | 91,031       | 

7. ASSET RETIREMENT OBLIGATIONS

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

|                                                        |   | March 31, |   |   | December 31, |  
|------------------------------------------------------- | - | --------- | - | - | ------------ | -
|                                                        |   | 2016      |   |   | 2015         |  
|Asset retirement obligations,
      beginning of period | $ | 8,573     |   | $ | 5,683        |  
|Revision of estimate                                    |   | -         |   |   | 877          |  
|Acquisition of
      Uranerz                            |   | -         |   |   | 2,145        |  
|Accretion of liabilities                                |   | 175       |   |   | 494          |  
|Settlements                                             |   | (248      | ) |   | (626         | )
|Asset retirement obligations, end of period             | $ | 8,500     |   | $ | 8,573        |  
|Asset retirement obligations:                           |   |           |   |   |              |  
|Current                                                 | $ | 751       |   | $ | 1,000        |  
|Non-current                                             |   | 7,749     |   |   | 7,573        |  
|Asset retirement obligations, end of period             | $ | 8,500     |   | $ | 8,573        |  

Revision of estimates is as a result of a change in estimates
of the amount or timing of cash flows to settle asset retirement obligations.
Changes to the asset retirement obligations are recorded in profit and loss.

The asset retirement obligations of the Company are subject to
legal and regulatory requirements. Estimates of the costs of reclamation are
reviewed periodically by the applicable regulatory authorities. The above
provision represents the Companys best estimate of the present value of future
reclamation costs, discounted using credit adjusted risk-free interest rates
ranging from 8.5% to 11.5% and an inflation rate of 2.0% (March 31, 2015  2.0%). The total undiscounted decommissioning liability as at March 31, 2016 is
$32.30 million (March 31, 2015 - $27.40 million). Reclamation costs are expected
to be incurred between 2016 and 2038 in the following manner: 2016  2020 -
$2.83 million, 2021  2025 - $2.32 million, 2026  2030 - $2.69 million, 2031 
2035 - $8.78 million, 2036  2038 - $15.68 million.

8. 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:

15

---

|ENERGY FUELS INC.                                                                              
|-----------------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (unaudited)                               
|FOR THE THREE MONTHS ENDED MARCH 31, 2016                                                      
|(Tabular amounts expressed in thousands of US Dollars
      except share and per share amounts)
|                                                                                               

|                                                           |   | March 31, |  |   | December 31, | 
|---------------------------------------------------------- | - | --------- |  | - | ------------ | 
|                                                           |   | 2016      |  |   | 2015         | 
|Current portion of loans and
      borrowings:             |   |           |  |   |              | 
|Secured note (b)                                           | $ | -         |  | $ | 250          | 
|Wyoming Industrial
      Development Revenue Bond loan (c) |   | 3,271     |  |   | 3,291        | 
|Finance leases and other                                   |   | 38        |  |   | 41           | 
|Total current loans and borrowings                         | $ | 3,309     |  | $ | 3,582        | 
|Long-term loans and borrowings:                            |   |           |  |   |              | 
|Convertible debentures
      (a)                           | $ | 16,198    |  | $ | 14,624       | 
|Secured note (b)                                           |   | -         |  |   | 224          | 
|Wyoming Industrial
      Development Revenue Bond loan (c) |   | 13,108    |  |   | 14,078       | 
|Finance leases and other                                   |   | -         |  |   | 11           | 
|Total long-term loans and borrowings                       | $ | 29,306    |  | $ | 28,937       | 

| | (a) | 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$1,000 per Debenture for gross proceeds of $21.55
      million (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 UxC 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$1,000 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$1,000
      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 fair value through
      profit or loss where the debentures are measured at fair value based on
      the closing price on the TSX (a level 1 measurement) and changes are
      recognized in earnings. For the year ended December 31, 2015 the Company
      recorded a loss on revaluation of convertible debentures of $1.55 million
      (December 31, 2014  ($0.30 million)).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

16

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|ENERGY FUELS INC.                                                                              
|-----------------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (unaudited)                               
|FOR THE THREE MONTHS ENDED MARCH 31, 2016                                                      
|(Tabular amounts expressed in thousands of US Dollars
      except share and per share amounts)
|                                                                                               

| | (b) | In February 2015 the Company issued a secured note in the
      amount of $0.45 million for a 50% interest in a joint venture with an
      effective interest rate of 7%. In February 2016 the Company amended the
      terms of the note to include a onetime payment of $0.05 million on
      February 13, 2016 and a payment of $0.45 million due on the date in which
      ore from the Wate Project is successfully processed through a mill into
      uranium concentrates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (c) | The Company through its acquisition of Uranerz assumed a
      loan through the Wyoming Industrial Development Revenue Bond program (the
      "Loan"). The Loan has an annual interest rate of 5.75% and is repayable
      over seven years, maturing on October 15, 2020. The Loan originated on
      December 3, 2013 and required the payment of interest only for the first
      year, with the amortization of principal plus interest over the remaining
      six years. The Loan can be repaid earlier than its maturity date if the
      Company so chooses without penalty or premium. The Loan is secured by a
      charge on most of the assets of the Companys wholly owned subsidiary,
      Uranerz, including mineral properties, the processing facility, and
      equipment as well as an assignment of all of Uranerz rights, title and
      interest in and to its product sales contracts and other agreements.
      Uranerz is also subject to dividend restrictions. Principal and interest
      are paid on a quarterly basis on the first day of January, April, July and
      October. At March 31, 2016 the loan had an outstanding balance of $16.38
      million of which the current portion of the note was $3.27
  million.

9. CAPITAL STOCK

Authorized capital stock

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

Issued capital stock

The significant transactions relating to capital stock issued
for the three months ended March 31, 2016:

|a) | In the three months ended March 31, 2016, The Company
      issued 200,200 shares under the Companys at-the- market offering (the
      ATM) for proceeds of $0.53 million.                                                                                                                                                                                                                                                                                                                                                                                               
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|b) | On March 14, 2016, the Company completed a public
      offering of 5,031,250 units at a price of $2.40 per unit for gross
      proceeds of $12.08 million. Each unit consisted of one common share and
      one-half of one warrant. Each Unit consists of one common share and one
      half of one common share purchase warrant, or a total of 5,031,250 Shares
      and 2,515,625 Warrants. Each Warrant is exercisable until March 14, 2019
      and entitles the holder thereof to acquire one Share upon exercise at an
      exercise price of US$3.20 per share.

Share Purchase Warrants

The Company has share purchase warrants denominated in Canadian
dollars and US dollars.

The following table summarizes the Companys share purchase
warrants denominated in Cdn$:

17

---

|ENERGY FUELS INC.                                                                              
|-----------------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (unaudited)                               
|FOR THE THREE MONTHS ENDED MARCH 31, 2016                                                      
|(Tabular amounts expressed in thousands of US Dollars
      except share and per share amounts)
|                                                                                               

|                |  |               |  |  | Exercise Price |  |  | Warrants    | 
|--------------- |  | ------------- |  |  | -------------- |  |  | ----------- | 
|Month Issued    |  | Expiry Date   |  |  | Cdn$           |  |  | Outstanding | 
|June 2012       |  | June 22, 2016 |  |  | 13.25          |  |  | 351,025     | 
|June
      2013 |  | June 15, 2016 |  |  | 9.50           |  |  | 456,948     | 

The following table summarizes the Companys share purchase
warrants denominated in USD. These warrants are accounted for as derivative
liabilities as the exercise price has a different currency than the Company
parent entity.

|             |  |                  |  |  | Exercise Price |  |  | Warrants    |  |   | Fair value at  | 
|------------ |  | ---------------- |  |  | -------------- |  |  | ----------- |  | - | -------------- | 
|Month Issued |  | Expiry Date      |  |  | USD$           |  |  | Outstanding |  |   | March 31, 2016 | 
|June 2015    |  | January 25, 2017 |  |  | 6.28           |  |  | 1,224,000   |  | $ | 93             | 
|March 2016   |  | March 14, 2019   |  |  | 3.20           |  |  | 2,515,625   |  |   | 2,023          | 
|             |  |                  |  |  |                |  |  |             |  | $ | 2,116          | 

The US dollar based warrants are classified as Level 2 under
the fair value hierarchy (Note 15).

The following weighted average assumptions were used for the
Black-Scholes option pricing model to calculate the $2.09 million of fair value
for the 2,515,625 warrants issued in connection with the public offering in
March 2016.

Risk-free rate
    1.15%Expected life
    3.0 yearsExpected volatility
    61.2%*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.
| | - | --------------------------------------------------------------------------------------------------------------------------------------

10. BASIC AND DILUTED LOSS PER COMMON SHARE

Basic and diluted loss per share

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

|                                                                             |  | Three months ended |  
|---------------------------------------------------------------------------- |  | ------------------ | -
|                                                                             |  | March 31,          |  
|                                                                             |  | 2016               |  
|Loss attributable to
      shareholders                                      |  | ($8,808            | )
|Basic and diluted weighted average number of common shares
      outstanding |  | 47,660,414         |  
|Loss per common share                                                        |  | ($0.19             | )

For the three months ended March 31, 2016 and 2015, 6,993,805
and 1,691,781 options and warrants, respectively, and the potential conversion
of the uranium debentures have been excluded from the calculation as their
effect would have been anti-dilutive.

18

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|ENERGY FUELS INC.                                                                              
|-----------------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (unaudited)                               
|FOR THE THREE MONTHS ENDED MARCH 31, 2016                                                      
|(Tabular amounts expressed in thousands of US Dollars
      except share and per share amounts)
|                                                                                               

11. SHARE-BASED PAYMENTS

The Company has stock incentive plans for directors, executives
and eligible employees. Stock incentive awards include employee stock options
and restricted stock units (RSUs). The Company issues new shares of common
stock to satisfy exercises and vesting under all of its stock incentive awards.
At March 31, 2016, a total of 5,191,134 shares were authorized for stock
incentive plan awards.

Employee Stock Options

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 exercise price of the options is set
as the higher of the Companys closing share price on the day before the grant
date or the five-day volume weighted average price. Stock options granted under
the Companys stock incentive plans generally vest over a period of two years or
more and are generally exercisable over a period of five years from the grant
date not to exceed 10 years. The value of each option award is estimated at the
grant date using the Black-Scholes option pricing model. There were 0.42 million
options granted in the three month ended March 31, 2016 (2015  Nil). At March
31, 2016, there were 2.45 million options outstanding with 2.07 million options
exercisable, at a weighted average exercise price of $6.54, with a weighted
average remaining contractual life of 4.27 years. The aggregate intrinsic value
of the fully vested shares was $0.02 million.

The fair value of the options granted under the Plan for the
three months ended March 31, 2016 was estimated at the date of grant, using the
Black-Scholes Option Valuation Model, with the following weighted-average
assumptions:

|Risk-free interest rate                        |   | 1.43%     | 
|---------------------------------------------- | - | --------- | 
|Expected life                                  |   | 5.0 years | 
|Expected volatility                            |   | 74.8*     | 
|Expected dividend yield                        |   | 0.00%     | 
|Weighted-average expected
      life of option |   | 5.00      | 
|Weighted-average grant date fair value         | $ | 1.22      | 

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

The summary of the Companys stock options at March 31, 2016
and December 31, 2015, and the changes for the fiscal periods ending on those
dates is presented below:

|                                |  | Three Months ended |  |  | Year ended        | 
|------------------------------- |  | ------------------ |  |  | ----------------- | 
|                                |  | March 31, 2016     |  |  | December 31, 2015 | 
|                                |  |                    |  |  |                   | 
|                                |  |                    |  |  | Weighted          | 
|                                |  | Range of           |  |  | Average           | 
|                                |  | Exercise Prices    |  |  | Exercise Price    | 
|                                |  | $                  |  |  | $                 | 
|Balance, beginning of period    |  | 6.55 -
      38.12 |  |  | 10.05             | 
|Transactions during the period: |  |                    |  |  |                   | 
|Granted                         |  | 2.12               |  |  | 2.12              | 
|Exercised                       |  | 2.12               |  |  | 2.12              | 
|Forfeited                       |  | 4.44 -
      15.61 |  |  | 7.64              | 
|Expired                         |  | 6.94 - 33.15       |  |  | 27.19             | 
|Balance, end of period          |  | 2.55 - 32.10       |  |  | 5.88              | 

Restricted Share Units

The Company grants RSUs to executives and eligible employees.
Awards are determined as a target percentage of base salary and vest over
periods of three years. Prior to vesting, holders of restricted stock units do
not have the right to vote the underlying shares. The restricted stock units are
subject to forfeiture risk and other restrictions.

19

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|ENERGY FUELS INC.                                                                              
|-----------------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (unaudited)                               
|FOR THE THREE MONTHS ENDED MARCH 31, 2016                                                      
|(Tabular amounts expressed in thousands of US Dollars
      except share and per share amounts)
|                                                                                               

Upon vesting, the employee is entitled to receive one share of
the Companys common stock for each restricted stock unit. During the three
months ended March 31, 2016, the Companys Board of Directors approved the
issuance of 948,047 RSUs under the Companys 2015 Omnibus Equity Incentive
Compensation Plan (the Compensation Plan) (2015  153,850).

A summary of the status and activity of non-vested stock
options and RSUs at March 31, 2016 is as follows:

|                             |  | Stock-option |   |   | RSU             | 
|---------------------------- |  | ------------ | - | - | --------------- | 
|                             |  |              |   |   | Weighted        | 
|                             |  | Number of    |   |   | Average Grant-  | 
|                             |  | shares       |   |   | Date Fair Value | 
|Non-vested December 31, 2015 |  | 200,229      |   | $ | 2.25            | 
|Granted                      |  | 418,287      |   | $ | 1.30            | 
|Vested                       |  | (329,065     | ) | $ | 2.24            | 
|Settled for equity           |  | -            |   | $ | -               | 
|Forfeited                    |  | (22,532      | ) | $ | 3.86            | 
|Non-vested March 31, 2016    |  | 266,919      |   | $ | 1.56            | 

The total intrinsic value and fair value of RSUs that vested
and were settled for equity in the three months ended March 31, 2016 was $0.30
million (2015  Nil).

At March 31, 2016, there was $0.23 million and $1.88 million of
unrecognized compensation costs related to the unvested stock options and RSU
awards, respectively. This cost is expected to be recognized over a period of
approximately two years.

In the three months ended March 31, 2016 the Company issued
1,200 shares upon exercise of stock options at an average exercise price of
$2.12 for proceeds of less than $0.01 million. These options had an intrinsic
value of less than $0.01 million.

The share-based compensation recorded during the three months
ended March 31, 2016 and 2015 is as follows:

|                         |   | **Three months ended** | 
|------------------------ | - | ---------------------- | 
|                         |   | March 31,              | 
|                         |   | 2016                   | 
|Share-based compensation | $ | 667                    | 

12. SUPPLEMENTAL FINANCIAL INFORMATION

The components of revenues are as follows:

|                                              |   | Three months ended | 
|--------------------------------------------- | - | ------------------ | 
|                                              |   | March 31,          | 
|                                              |   | 2016               | 
|Uranium concentrates                          | $ | 17,978             | 
|Alternate feed materials processing and other |   | 18                 | 
|Revenues                                      | $ | 17,996             | 

20

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|ENERGY FUELS INC.                                                                              
|-----------------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (unaudited)                               
|FOR THE THREE MONTHS ENDED MARCH 31, 2016                                                      
|(Tabular amounts expressed in thousands of US Dollars
      except share and per share amounts)
|                                                                                               

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

|                                                             |   | Three months ended |  
|------------------------------------------------------------ | - | ------------------ | -
|                                                             |   | March 31,          |  
|                                                             |   | 2016               |  
|                                                             |   |                    |  
|Interest income                                              | $ | 20                 |  
|Change in value of
      investments accounted at fair value |   | 69                 |  
|Change in value of warrant liabilities                       |   | 253                |  
|Change in value of
      convertible debentures              |   | (561               | )
|Other                                                        |   | 307                |  
|Other income (expense)                                       | $ | 88                 |  

13. COMMITMENTS AND CONTINGENCIES

General legal matters

White Mesa Mill

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 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 its 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. No other activity involving the Company on this matter
has occurred since that date.

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 our 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 $37,500 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 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.

21

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|ENERGY FUELS INC.                                                                              
|-----------------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (unaudited)                               
|FOR THE THREE MONTHS ENDED MARCH 31, 2016                                                      
|(Tabular amounts expressed in thousands of US Dollars
      except share and per share amounts)
|                                                                                               

Canyon Project

In March, 2013, the Center for Biological Diversity, the Grand
Canyon Trust, the Sierra Club and the Havasupai Tribe (the Canyon 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 United States Forest Service (USFS) seeking an order (a) declaring
that the USFS failed to comply with environmental, mining, public land, and
historic preservation laws in relation to our Canyon Project, (b) setting aside
any approvals regarding exploration and mining operations at the Canyon Project,
and (c) directing operations to cease at the Project and enjoining the USFS from
allowing any further exploration or mining-related activities at the Canyon
Project 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. On April 7, 2015, the District Court
issued its final ruling on the merits in favor of the Defendants and the Company
and against the Canyon Plaintiffs on all counts. The Canyon Plaintiffs appealed
the District Courts ruling on the merits to the Ninth Circuit Court of Appeals,
and filed motions for an injunction pending appeal with the District Court.
Those motions for an injunction pending appeal were denied by the District Court
on May 26, 2015. Thereafter, Plaintiffs filed urgent motions for an injunction
pending appeal with the Ninth Circuit Court of Appeals, which were denied on
June 30, 2015. Briefing on the appeal on the merits is now complete, and the
parties are waiting for a hearing to be scheduled. If the Canyon Plaintiffs are
successful on their appeal on the merits, the Company may be required to
maintain the Canyon Project on standby pending resolution of the matter. Such a
required prolonged stoppage of shaft sinking and mining activities could have a
significant impact on our future operations.

Surety bonds

The Company has indemnified third-party companies to provide
surety bonds as collateral for the Companys ARO. 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. The Company currently has $12.98 million
posted against an undiscounted ARO of $32.30 million (2015 - $16.15 million
posted against undiscounted asset retirement obligation of $27.40 million).

14. SEGMENT INFORMATION

The Company is engaged in uranium extraction, recovery and
sales of uranium from mineral properties and the recycling of uranium bearing
materials generated by third parties. As a part of these activities the Company
also acquires, explores, evaluates and, if warranted, permits uranium
properties. The Companys primary mining activities are in the United States.

The reportable segments are those operations whose operating
results are reviewed by the Chief Executive Officer to make decisions about
resources to be allocated to the segment and assess its performance provided
those operations pass certain quantitative thresholds. Operations whose
revenues, earnings or losses or assets exceed 10% of the total consolidated
revenue, earnings or losses or assets are reportable segments. Information about
assets and liabilities of the segment has not been provided because the
information is not used to assess performance.

In order to determine reportable operating segments, management
reviewed various factors, including geographical location and managerial
structure. It was determined by management that a reportable operating segment
generally consists of an individual property managed by a single general manager
and management team. Finance income (expense), other income (expenses) are
managed on a consolidated basis and are not allocated to operating segments.

Non-mining activities and other operations are reported in
Corporate and other.

The Company has two operating segments, the conventional
uranium recovery segment (the Conventional Uranium Segment) and the in-situ
uranium recovery segment (ISR Uranium Segment).

The Conventional Uranium Segment

The Conventional Uranium Segment consists of a standalone
conventional uranium recovery facility (the White Mesa Mill), conventional
mining projects in the vicinity of the White Mesa Mill located in the Colorado
Plateau, Henry Mountains, Arizona Strip, and the Roca Honda joint venture (Roca
Honda) in New Mexico, and the Sheep Mountain Project in Wyoming. At March 31,
2016 the conventional mining projects in the vicinity of the White Mesa Mill are
on standby, being evaluated for continued mining activities and/or
in process of being permitted. The White Mesa Mill also processes third party
uranium bearing mineralized materials from mining and recycling activities.

22

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|ENERGY FUELS INC.                                                                              
|-----------------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (unaudited)                               
|FOR THE THREE MONTHS ENDED MARCH 31, 2016                                                      
|(Tabular amounts expressed in thousands of US Dollars
      except share and per share amounts)
|                                                                                               

The ISR Uranium Segment

The ISR Uranium Segment consists of a uranium recovery facility
  to recover from operating wellfields of the Nichols Ranch Project located in
  Wyoming. The Nichols Ranch Project also includes the Jane Dough property and the
  Hank Project. Additionally, the segment includes other mineral properties in the
  vicinity on the Nichols Ranch Project. These assets were acquired as part of the
Companys 2015 acquisition of Uranerz.

The following tables set forth operating results by reportable
segment for the three months ended March 31, 2016: Note the ISR Segment was
acquired on June 18, 2015. Prior to the acquisition the Companys reportable
segment was its conventional uranium segment.

|                                                  |   |                    |  |   | Non-Operating |   |   |                   |  
|------------------------------------------------- | - | ------------------ |  | - | ------------- | - | - | ----------------- | -
|                                                  |   | Operating Segments |  |   | Segments      |   |   |                   |  
|                                                  |   |                    |  |   |               |   |   |                   |  
|Three months ended March 31, 2016                 |   | Conventional       |  |   | ISR           |   |   | Corporate & Other |  
|Revenue                                           | $ | 17,996             |  | $ | -             |   | $ | -                 |  
|Costs and expenses applicable to
      revenue    |   | 12,143             |  |   | -             |   |   | -                 |  
|Development, permitting
      and land holding    |   | 2,856              |  |   | 4,586         |   |   | -                 |  
|Standby costs                                     |   | 2,166              |  |   | -             |   |   | -                 |  
|Accretion of asset
      retirement obligation    |   | 130                |  |   | 45            |   |   | -                 |  
|Selling costs                                     |   | 74                 |  |   | -             |   |   | -                 |  
|Intangible asset
      amortization               |   | 219                |  |   | -             |   |   | -                 |  
|General and administration                        |   | -                  |  |   | 339           |   |   | 3,489             |  
|Costs directly
      attributable to acquisitions |   | -                  |  |   | -             |   |   | 326               |  
|Total operating loss                              |   | 408                |  |   | (4,970        | ) |   | (3,815            | )
|                                                  |   |                    |  |   |               |   |   |                   |  
|Interest Expense                                  |   | -                  |  |   | -             |   |   | (576              | )
|Other income (expense)                            |   | -                  |  |   | -             |   |   | 88                |  
|Net loss                                          | $ | 408                |  | $ | (4,970        | ) | $ | (4,303            | )
|Attributable to
      shareholders                | $ | 408                |  | $ | (4,913        | ) | $ | (4,303            | )
|Non-controlling interests                         |   | -                  |  |   | (57           | ) |   | -                 |  
|Net loss for the period                           | $ | 408                |  | $ | (4,970        | ) | $ | (4,303            | )

15. FAIR VALUE ACCOUNTING

Assets and liabilities measured at fair value on a
recurring basis

The following tables set forth the fair value of the Company's
assets and liabilities measured at fair value on a recurring basis (at least
annually) by level within the fair value hierarchy as at March 31, 2016. As
required by accounting guidance, assets and liabilities are classified in their
entirety based on the lowest level of input that is significant to the fair
value measurement.

As at March 31, 2016, 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.

23

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|ENERGY FUELS INC.                                                                              
|-----------------------------------------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
      (unaudited)                               
|FOR THE THREE MONTHS ENDED MARCH 31, 2016                                                      
|(Tabular amounts expressed in thousands of US Dollars
      except share and per share amounts)
|                                                                                               

|                                |   | Level 1 |   |   | Level 2 |   |   | Level 3 |  |   | Total   |  
|------------------------------- | - | ------- | - | - | ------- | - | - | ------- |  | - | ------- | -
|Investments                     | $ | 984     |   | $ | -       |   | $ | -       |  | $ | 984     |  
|Warrant liabilities (Note 9)    |   | -       |   |   | (2,116  | ) |   | -       |  |   | (2,116  | )
|Convertible debentures (Note 7) |   | (16,198 | ) |   | -       |   |   | -       |  |   | (16,198 | )
|                                | $ | (15,214 | ) | $ | (2,116  | ) | $ | -       |  | $ | (17,330 | )

The Company's investments are marketable equity securities
which are exchange traded are valued using quoted market prices in active
markets and as such are classified within Level 1 of the fair value hierarchy.
The fair value of the investments is calculated as the quoted market price of
the marketable equity security multiplied by the quantity of shares held by the
Company.

24

---

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis should be read in
conjunction with our unaudited condensed consolidated financial statements for
the three months ended March 31, 2016, and the related notes thereto, which have
been prepared in accordance with generally accepted accounting principles in the
United States (U.S. GAAP). Additionally, the following discussion and analysis
should be read in conjunction with Managements Discussion and Analysis of
Financial Condition and Results of Operations and the consolidated financial
statements included in Part II of our Annual Report on Form 10-K for the year
ended December 31, 2015 filed on March 15, 2016. This discussion and analysis
contains forward-looking statements and forward-looking information that involve
risks, uncertainties and assumptions. Our actual results may differ materially
from those anticipated in these forward-looking statements and information as a
result of many factors. See section Note Regarding

Forward-Looking Statements below.

All dollar amounts stated herein are in U.S. dollars,
except per share amounts and currency exchange rates unless specified otherwise.
References to Cdn$ refer to Canadian currency, and $ to United States currency.

Overview

Prior to June 2012, Energy Fuels was primarily a uranium and
vanadium exploration, permitting, and evaluation company with no revenue or
operating properties. In June 2012, Energy Fuels acquired the US Mining Division
of Denison Mines Corp. and began revenue producing activities from these
properties. The activities of Energy Fuels, including support staff and
expenditures, increased dramatically upon completion of the acquisition. All
activities of the Company prior to the June 18, 2015 acquisition of Uranerz
Energy Corporation (Uranerz) concerned the Conventional Uranium Segment.

On June 18, 2015, Energy Fuels acquired all of the outstanding
shares of Uranerz which had, among other properties, an active in situ(ISR) uranium extraction and recovery facility. These operations acquired
from Uranerz are included in the consolidated financial statements as of June
18, 2015 and represent the Companys ISR Uranium Segment.

While the Company has uranium extraction and recovery
activities and generates revenue, it is considered to be in the Exploration
Stage (as defined by SEC Industry Guide 7) as it has no Proven or Probable
Reserves within the meaning of SEC Industry Guide 7. Under US GAAP, for a
property that has no Proven or Probable Reserves, the Company capitalizes the
cost of acquiring the property (including mineral properties and rights) and
expenses all costs related to the property incurred subsequent to the
acquisition of such property. Acquisition costs of a property are depreciated
over its estimated useful life for a revenue generating property or expensed if
the property is sold or abandoned. Acquisition costs are subject to impairment
if so indicated.

Outlook

Uranium Market Update

According to price data from TradeTech LLC
(TradeTech), uranium spot prices are down from $34.20 per pound on
December 31, 2015 to $27.50 per pound on April 30, 2016, or 20% for the
year-to-date. Weekly spot prices reported by TradeTech reached a low of $25.50
per pound on April 15, 2016, which was the lowest value observed by TradeTech
since April 22, 2005. TradeTech price data also indicate that
long-term  U3O8 prices, which began 2016 at $44.00
per pound, dropped to $42.00 per pound by April 30, 2016.

The drop in uranium prices is believed to be caused by weaker
than expected demand by utilities and persistent oversupply. Most transactions
on the spot market in 2016 have involved traders and intermediaries as utilities
appear to be well supplied in the short term. The Company continues to believe
the weak uranium markets are the result of excess uranium supplies caused by
large quantities of secondary uranium extraction, excess inventories and
insufficient production cut-backs. The oversupply situation is further
exacerbated by reduced demand due to the continued delays in the restart of
Japanese reactors, premature reactor closures, and general weakness in the
global economy and energy sector. However, since the beginning of the year,
certain announcements have been made which may lessen some of the oversupply now burdening the market, including Cameco
Corporations April 21, 2016 announcement that it is reducing production by
approximately 4 million pounds per year in 2016, with further production cuts
going forward.

25

---

As a result of the expected growth of nuclear energy, the
Company continues to believe the long-term fundamentals of the uranium industry
are positive. The Company believes prices must rise to higher levels to support
new primary production that will be required to meet the increasing demand we
expect to see as more nuclear units are constructed around the world. According
to TradeTech, world uranium requirements continue to exceed primary mine
production, with the gap being bridged by secondary supplies and excess uranium
inventories in various forms that have already been mined. As excess
inventories are drawn down and as production from existing mines declines, the
Company believes primary mine production will be required to meet demand over
the long-term.

Despite current market uncertainty and recently falling prices,
  the Company continues to believe it has begun to see certain early signs of a
  market recovery, as previously described in the Companys Form 10-K for the
  fiscal year ended December 31, 2015. Of note, China recently finalized its
  13thFive-Year Plan, including a commitment to install 58 GW of
  nuclear capacity by 2020 (versus todays 27 GW in installed capacity). In
  addition, China connected eight reactors to the grid in 2015 (World Nuclear
  News, January 4, 2016). Japanese utilities are also making slow progress in
  restarting their nuclear fleet. Two reactors have restarted (Sendai 1 and 2),
  two more units are approved to restart pending resolution of an injunction
  (Takahama 3 and 4), and one more reactor has completed the final regulatory
  step needed prior to approval for restart (Ikata 3). It is worth noting that 42
  reactors in Japan are operable according to the World Nuclear Association, and,
  in addition to the five mentioned above, 19 have applied for approvals to
  restart. Finally, as mentioned above Cameco recently announced that it is
  reducing uranium production by approximately 4 million pounds for 2016, and in
  addition, Rio Tinto and BHP have reported decreased uranium production in
Q1-2016 versus Q4-2015.

Operations and Sales Outlook

With the June 2015 acquisition of Uranerz, which includes the
Nichols Ranch ISR Project, Energy Fuels has increased its flexibility to adjust
its uranium production levels to respond to market conditions and to meet the
requirements of its sales contracts. This allows the Company to efficiently
fulfill its existing commitments and commit to new spot and term sales that will
be sourced from uranium recovered from the Companys facilities. The Company
plans to extract and/or recover uranium from the following sources in 2016 (each
of which is more fully described below):

| | 1) | Nichols Ranch ISR Project;                     
| | -- | -----------------------------------------------
| | 2) | Alternate feed materials; and                  
| | 3) | Pinenut Project material available for milling.

In response to continued uranium price weakness and market
uncertainty, the Company expects to continue cash conservation efforts until
such time that sustained improvement in uranium market conditions is observed.
In addition, the Company is continuing to manage its activities and assets
conservatively, maintaining its substantial uranium resource base and its ISR
and conventional uranium extraction and recovery capabilities, and only
scheduling recovery at the White Mesa Mill and the Nichols Ranch Project as
market conditions, availability of mill feed, cash needs, and/or contract
delivery requirements may warrant.

Definitive agreement to acquire Mesteña

On March 4, 2016, the Company entered into a definitive
agreement (the Mesteña Purchase Agreement) between the Company and Mesteña
Uranium, LLC, Leoncito Plant, LLC, Leoncito Project, LLC (collectively, the
Subject Companies) and Mesteña, Inc., Jones Ranch Minerals Unproven, Ltd. and
Mesteña Unproven, Ltd. (collectively with the Subject Companies, the Selling
Parties) to acquire all of the membership interests of the Subject Companies.
Mesteña is a uranium recovery company that owns the Alta Mesa ISR uranium
recovery project (the Alta Mesa Project), located in Texas. The Alta Mesa
Project has a fully-licensed and constructed ISR uranium recovery plant, with a
design capacity of 1.5 million pounds of uranium concentrate per year. The
recovery plant is currently being maintained on standby. Under the Mesteña Purchase Agreement,
the Company has agreed to issue 4,551,284 common shares to the Selling Parties
at the closing of the transaction, subject to receipt of all applicable
regulatory and stock exchange approvals and the satisfaction of certain other
conditions to closing. The properties will be subject to a royalty equal (in
total) to 3.125% of the value of the recovered  U3O8 from the Properties sold at
a uranium price of $65.00 or less per pound  U3O8, 6.25% of the value of the
recovered  U3O8 from the Properties sold at a uranium price greater than $65.00
and up to and including $95.00 per pound  U3O8, and 7.5% of the value of
therecovered  U3O8  from the Properties sold at a uranium price greater than
$95.00 per pound  U3O8. The Company expects to complete the acquisition of
Mesteña in the second quarter of 2016 as previously announced.

26

---

The Company will continue to evaluate additional acquisition
opportunities that may arise.

Extraction and Recovery Activities  Overview

The Company expects to recover approximately 950,000 pounds of  U3O8 for the year ending December 31, 2016, as further
described below.

The Company currently has finished goods inventory and uranium
extraction and recovery capabilities that exceed the commitments contained in
its existing sales contracts. As a result, both ISR and conventional uranium
extraction and/or recovery have been, and are expected to continue to be,
maintained at conservative levels until such time as market conditions improve
sufficiently and/or the Company requires cash to meet its business needs.

Extraction and Recovery  ISR Uranium Segment

In response to market conditions, the Company expects to delay
the planned construction of one of its wellfields to 2017. We currently plan
to extract and recover approximately 300,000 pounds of  U3O8 for the year ending December 31, 2016, compared with our previous estimate
of 350,000 pounds for 2016, as a result of this planned delay.

At March 31, 2016, the Nichols Ranch wellfields had seven
header houses extracting uranium. The Company plans to complete an eighth header
house by the end of 2016. A ninth header house was originally planned for
completion in 2016 but has been delayed due to market conditions. The Company
has completed all monitor wells in Production Area #2.

In February 2016, the Company completed construction of the
elution circuit and began the elution process at the Nichols Ranch Plant.
Yellowcake slurry from this circuit is being shipped to our White Mesa Mill for
final yellowcake drying, packaging, and shipment to a conversion facility.

Permitting of the adjacent Jane Dough Property is continuing
and is expected to be completed in advance of our need to begin wellfield
construction. Also, the Hank Project is fully permitted to be constructed as a
satellite facility to the Nichols Ranch Plant.

Extraction and Recovery  Conventional Uranium
Segment

The Company expects the White Mesa Mill to recover
approximately 650,000 pounds of  U3O8 for the year ending
December 31, 2016.

The Company is planning to recover approximately 425,000 pounds
of  U3O8 extracted from its Pinenut Project. This is an
increase of 50,000 pounds over what was previously announced, due to updated
weights and assays upon receipt of material at the Mill. Shipment of this
material to the Mill was completed in March 2016. The Pinenut Project is now
fully depleted, and the Company has commenced reclamation activities.

During 2016, the Company also expects to recover approximately
225,000 pounds of  U3O8 from alternate feed materials.

27

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The White Mesa Mill has historically operated on a campaign
basis, whereby uranium recovery is scheduled as mill feed, cash needs, contract
requirements, and/or market conditions may warrant. Once the processing for 2016
concludes (expected to be in late 2016), the Company expects to place uranium
recovery activities at the Mill on standby until additional mill feed becomes
available. The Mill will dry and package material from the Nichols Ranch Plant
and continue to receive and stockpile alternate feed materials for future
milling campaigns. Each future milling campaign will be subject to receipt of
sufficient mill feed that would allow the Company to operate the Mill on a
profitable basis and/or recover a portion of its standby costs.

The Company is continuing shaft sinking activities at the
Canyon Project and has completed the installation of new equipment and
infrastructure to optimize shaft sinking rates and realize construction cost
savings. Once the shaft depth approaches the mineralized zone, we plan to
complete additional exploration drilling to further evaluate the deposit. The
timing of our plans to extract and process mineralized materials from this
project will be based on the results of this additional evaluation work, along
with market conditions, available financing, and sales requirements.

The Company expects to continue to pursue permitting activities
at certain of its conventional projects, including the Roca Honda Project and
the Sheep Mountain Project. The Company will also continue to evaluate the
Bullfrog Property at its Henry Mountains Project. Expenditures for certain of
these projects have been adjusted to coincide with expected dates of price
recoveries based on our forecasts.

Finally, the Company plans to continue to maintain, and update
as necessary, all permits on its standby properties. These properties will
remain on standby until market conditions improve such that the material can be
sold at prices that support extraction. The Company also plans to continue to
evaluate its non-core properties for sale or abandonment in order to reduce
costs and/or receive value for these properties. The Company is continuing to
monitor corporate and field overhead to reflect the lower levels of
activity.

Sales

For 2016, the Company forecasts sales under its existing
long-term contracts to total approximately 550,000 pounds of  U3O8. Of this
total, 300,000 pounds were delivered in the first quarter of the year with the
remaining amount in the second and third quarters of the year. The prices for
material sold under the existing long-term contracts are either fixed or at
floors. The average sales price under the Companys long-term contracts is
expected to be higher in 2016 than 2015 levels. The Company expects to complete
these sales from  U3O8 already in inventory or expected to be recovered from its
planned activities discussed above.

The Company also sold 50,000 pounds of  U3O8 to a utility based
on spot prices at the time of the contract. The Company is currently monitoring
market conditions for additional sales opportunities. Selective spot sales are
expected to be made as necessary to generate cash for operations and development activities.

In 2017, the Company expects to have existing inventory or
expected production to meet all of its commitments to sell 620,000 pounds of
uranium under its existing long-term contracts at average sales prices higher
than 2015 levels.

The Company also continues to pursue new sources of revenue,
including expansion of its alternate feed business.

Results of Operations

The following table summarizes the results of operations for
the three months ended March 31, 2016 and 2015 (in thousands of dollars):

28

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|                                                  |   | Three
      Months ended |  
|------------------------------------------------- | - | ------------------------ | -
|                                                  |   | March 31,                |  
|                                                  |   | 2016                     |  
|Revenue                                           | $ | 17,996                   |  
|Costs and expenses applicable to revenue          |   | 12,143                   |  
|Gross Profit                                      |   | 5,853                    |  
|                                                  |   |                          |  
|Other operating costs and
      expenses          |   |                          |  
|Development,
      permitting and land holding    |   | 7,442                    |  
|Standby
      costs                               |   | 2,166                    |  
|Accretion
      of asset retirement obligation    |   | 175                      |  
|Total other operating costs
      and expenses    |   | 9,783                    |  
|                                                  |   |                          |  
|Selling, general &
      administration           |   |                          |  
|Selling
      costs                               |   | 74                       |  
|Intangible
      asset amortization               |   | 219                      |  
|General
      and administration                  |   | 3,828                    |  
|Costs
      directly attributable to acquisitions |   | 326                      |  
|Total selling, general & administration           |   | 4,447                    |  
|                                                  |   |                          |  
|Total Operating Loss                              |   | (8,377                   | )
|Interest expense                                  |   | (576                     | )
|Other income (expense)                            |   | 88                       |  
|Net loss                                          | $ | (8,865                   | )
|                                                  |   |                          |  
|Basic and diluted loss per
      share            |   | ($0.19                   | )

For the three months ended March 31, 2016 the Company recorded
a net loss of $8.87 million or $0.19 per share compared with a loss of $1.20
million or $0.06 per share for the three months ended March 31, 2015.

Revenues

The Companys revenues from uranium are largely based on
delivery schedules under long-term contracts, which can vary from quarter to
quarter.

Revenues for the three months ended March 31, 2016 totaled
$18.00 million compared with $7.60 million in the three months ended March 31,
2015.

Revenues for the three months ended March 31, 2016 totaled
$18.00 million, of which $17.98 million were sales of 350,000 pounds of  U3O8,
which included the sale of 300,000 pounds of  U3O8 pursuant to term contracts at
an average price of $54.19 per pound and the sale of 50,000 pounds of  U3O8 on the
spot market at a price of $34.40 per pound. All of the sales for the three
months ended March 31, 2016 were related to the Conventional Uranium
Segment.

There were no sales related to the ISR Uranium Segment for the
three months ended March 31, 2016.

29

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Revenues for the three months ended March 31, 2015 totaled
$7.60 million, of which $6.99 million were sales of 116,667 pounds of uranium
concentrates, all of which were pursuant to long term contracts at an average
price of $59.95 per pound and related to the Conventional Uranium Segment and
$0.60 million related to revenue received under a processing agreement.

Operating Expenses

Uranium recovered and costs and expenses applicable to
revenue

In the three months ended March 31, 2016, the Company recovered
85,000 pounds of  U3O8 from its ISR Uranium Segment. As the Company operates its
Conventional Uranium Segment on a campaign basis no uranium concentrates were
recovered. In the three months ended March 31, 2015, the Company recovered
200,000 pounds of  U3O8 (all from the Conventional Uranium Segment) of which
58,000 pounds of  U3O8 were for the account of a third party under a processing
agreement. Uranium recovered for its own account included 142,000 pounds from
alternate feed sources.

Costs and expenses applicable to revenue for the three months
ended March 31, 2016 totaled $12.14 million, compared with $3.84 million for the
three months ended March 31, 2015. The increase in the cost of sales was
primarily attributable to the increase in the quantity of  U3O8 sold year over
year as discussed above. Costs of goods sold averaged $34.69 per pound and
$32.95 per pound for the three months ended March 31, 2016 and 2015,
respectively.

Other operating costs and expenses

Development, permitting and land holding

For the three months ended March 31, 2016, the Company spent
$7.44 million for development, permitting, and land holding primarily related to
wellfield construction and partial construction of the elution circuit at the
Nichols Ranch Project and for the replacement of five leach tanks at the White
Mesa Mill in preparation for the upcoming campaign. While we expect the amounts
expensed will add value to the Company, we expense these amounts as we do not
have proven or probable reserves at the Nichols Ranch Project or the White Mesa
asset group under SEC Industry Guide 7. For the three months ended March 31,
2015, we spent $0.20 million primarily on permitting and land holding for our
conventional assets.

Standby expense

The Companys La Sal and Daneros Projects were placed on
standby in the last quarter of calendar year 2012, as a result of market
conditions. In February 2014, the Company placed its Arizona 1 Project on
standby. In 2015, the White Mesa Mill was operated at lower levels of uranium
recovery, including prolonged periods of standby. Costs related to the care and
maintenance of the standby mines, along with standby costs incurred while the
White Mesa Mill was operating at low levels of uranium recovery or on standby,
are expensed.

For the three months ended March 31, 2016, standby costs
totaled $2.17 million compared with $1.54 million in 2015. The increase is
primarily related to increased standby costs at the White Mesa Mill, due to
lower uranium recovery levels resulting from an increased amount of time the
Mill was on standby. In the three months ended March 31, 2016 the Mill was on
standby.

Accretion

Accretion related to the asset retirement obligation for the
Companys properties increased for the three months ended March 31, 2016
($0.18 million) compared with the 2015 ($0.10 million) primarily due to the
increase in the amount of the asset retirement obligation added in connection
with the Uranerz acquisition.

30

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General, and Administrative

General, and administrative expense includes costs associated
with marketing uranium, corporate general and administrative costs. General and
administrative expenses consist primarily of payroll and related expenses for
personnel, contract and professional services, stock-based compensation expense
and other overhead expenditures. General and administrative expenses totaled
$3.83 million for the three months ended March 31, 2016 compared to $2.71
million for the three months ended March 31, 2015. This increase is due to
additional general and administration expenses of $0.35 million related to the
acquired ISR uranium segment which was completed in June 2015, and increase in
stock-based compensation of $0.54 million and one time payments totaling $0.20
million.

Intangible asset amortization

Intangible asset amortization are non-cash costs of
amortization of above-market sales contract value associated with the
acquisition of Denisons US Mining Division in June 2012 and the Uranerz acquisition in June 2015. During the three months ended March 31, 2016
intangible asset amortization totaled $0.22 million compared with $0.55
million for the three months ended March 31, 2015. As the ISR Uranium Segment
had no sales in the quarter no amortization was recorded.

Interest Expense and Other Income and Expenses

Interest Expense

Interest expense for the three months ended March 31, 2016 was
$0.58 million compared with $0.38 million in the prior year. The increase is
primarily due to interest on the $18.81 million in debt assumed from the June
2015 Uranerz acquisition.

Other income and expense

For the three months ended March 31, 2016, other income and
expense totaled $0.08 million of income. These amounts consist of a gain on warrant
liabilities of $0.25 million and gains in other miscellaneous items of $0.39
million, partially offset by a loss on the change in the mark-to-market values
of the Company's Debentures of $0.56 million.

Other income and expense for the three months ended March 31,
2015 totaled $1.05 million of income and mainly consisted of a change in the
mark-to-market values of the Companys Debentures totaling $0.71 million along
with other miscellaneous items.

Liquidity and Capital Resources

Funding of major business and property acquisitions

Over the past four years the Company has funded major business
and property acquisitions with capital provided by issuance of its common
shares. In 2012 Titan Uranium Inc. and the US Mining Division of Denison were
acquired, in 2013 Strathmore Minerals Corp. was acquired and in 2015 Uranerz was
acquired, each in exchange for newly issued shares. The Company intends to
continue to acquire assets utilizing common shares when it can be done under
attractive terms.

The Company also intends to complete the acquisition of Mesteña
in 2016 through the issuance of 4.55 million shares and pay advisor fees with
shares. Additionally, the Company expects to complete the purchase of the 40%
interest in Roca Honda from Sumitomo through a combination of cash and common
shares.

31

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Cash issued for shares and warrants

In the first quarter of 2016 0.20 million shares were sold for
net proceeds of $0.52 million under the Companys ATM Offering. Additionally, on
March 14, 2016 an equity offering of 5,031,250 units (each unit consisting of
one share and one half warrant) was closed for net proceeds of $10.98 million
after commissions and estimated expenses of the offering.

Working capital at March 31, 2016

At March 31 2016, the Company had working capital of $37.47
million, including $16.50 million in cash, an account receivable of $8.34
million which was collected in April 2016 and 225,000 pounds of finished goods
inventory. The Company believes it has sufficient cash and resources to carry
out its business plan beyond Q1 2017.

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

Debenture Maturity

The Company currently has 22,000 debentures (each debenture
equals Cdn$1,000) that mature on June 30, 2017. At maturity, the Company can
repay the indebtedness represented by the Debentures by paying to the debenture
trustee in Canadian dollars an amount equal to the aggregate Cdn$22.0 million
(US$16.96 million) principal amount of the outstanding Debentures 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 Debentures, in whole or in part, at
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 principal
amount of the Debentures maturing 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 maturity date.

The Company intends to keep each of these two options open as
it continues to evaluate the best option for the Company based on capital
availability and cost of such capital between now and the maturity date of the
debentures.

Cash and cash flow

Three months ended March 31, 2016

Cash and cash equivalents were $16.50 million at March 31,
2016, compared to $12.97 million at December 31, 2015. The increase of $3.53
million was due primarily to cash provided by financing activities of $10.70
million, cash provided by investing activities of $0.75 million partially offset
by cash used in operations of $8.70 million and gain on foreign exchange on cash
held in foreign currencies of $0.79 million.

Net cash provided by financing activities totaled $10.70
million consisting primarily of $11.50 million proceeds from the issuance of
stock in the March 2016 public offering and the ATM Offering partially offset by
$0.81 million to repay loans and borrowings.

Net cash provided by investing activities was $0.75 million,
which was primarily related to cash received from the sale of mineral properties
held for sale of $0.85 million partially offset by expenditures for mineral
properties and property, plant and equipment of $0.09 million.

Net cash used in operating activities of $8.70 million is
comprised of the net loss of $8.87 million for the period adjusted for non-cash
items and for changes in working capital items.

32

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Three months ended March 31, 2015

Cash and cash equivalents were $6.44 million at March 31, 2015,
compared to $10.41 million at December 31, 2014. The decrease of $3.97 million
was due primarily to cash used by operating activities of $3.03 million, cash
used by investing activities of $0.72 million, cash used in financing activities
of $0.02 million and loss on foreign exchange on cash held of $0.10 million.

Net cash used by financing activities totaled $0.02 million for
repayment of loans and borrowings.

Net cash used by investing activities was $0.72 million for
expenditures for property, plant and equipment and mineral properties.

Net cash used in operating activities of $3.03 million is
comprised of the net loss of $1.20 million for the period adjusted for non-cash
items and for changes in working capital items.

Critical accounting estimates and judgments

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

Significant estimates made by management include:

| | a. | Exploration stage
| | -- | -----------------

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

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

| | b. | Resource estimates
| | -- | ------------------

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

33

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| | c. | Valuation of mining and recovery assets in a
      business combination
| | -- | -----------------------------------------------------------------------

We value assets in a business combination based on our
estimates of the fair value of the mining and recovery assets acquired.

For mining and recovery assets actively extracting and
recovering uranium as well as those assets that we expect to extract uranium
from, we value the assets based on the income approach. As we have not
acquired proven or probable reserves in our business combinations the value
ascribed to these assets is based on our estimates of value beyond proven and
probable reserves. The value is calculated based, in part, on technical reports
prepared under NI 43-101. Our estimates of extraction and recovery activities
and related timing of extraction and recovery as well as the costs involved are
demonstrated by at least a preliminary economic assessment. We then adjust the
results of the technical reports to include the effects of anticipated
fluctuations in the future market price of uranium consistent with what we
believe to be the expectations of other market participants as well as any
expected operational or cost changes that we expect in the future operations of
these mining assets. These cash flow estimates include the estimated cash
outflows to develop, extract and recover the estimated
saleable U3O8 from these operations.

For mining assets that will be held for further evaluation or
for sale, we use the market approach utilizing implied transaction multiples
from historical uranium transactions.

| | d. | Valuation of mining assets acquired other than
      in a business combination
| | -- | ------------------------------------------------------------------------------

The costs of mining assets that are acquired in an asset
purchase transaction are recorded as mineral interests on the date of purchase
based on the consideration given up for the assets. If multiple assets are
involved in a transaction, the consideration is allocated based on the relative
values of the properties acquired.

| | e. | Depreciation of mining and recovery assets
      acquired
| | -- | ---------------------------------------------------------

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

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

| | f. | 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. See
b.above for information related to the valuation of mining and recovery
assets in this process.

| | g. | Impairment testingof mining and recovery
      assets
| | -- | -----------------------------------------------------

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

34

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| | h. | Asset retirement
  obligations
| | -- | ------------------------------

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

| | i. | 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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.

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

Commodity Price Risk

The Company is subject to market risk related to the market
price of U3O8. Our four supply contracts contain favorable pricing above current
spot prices; however, these long term prices cover only a portion of our planned
uranium recovery. Revenue beyond our current contracts will be affected by both
spot and long-term  U3O8 price fluctuations which are affected by factors beyond
our control, including: the demand for nuclear power; political and economic
conditions; governmental legislation in uranium producing and consuming
countries; and production levels and costs of production of other producing
companies. The Company continuously monitors the market to determine its level
of extraction and recovery of uranium in the future.

35

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Interest Rate Risk

The Company is exposed to interest rate risk on its cash
equivalents, deposits, restricted cash, and debt. Our interest earned is not
material; thus not subject to significant risk. Our Wyoming Industrial
Development Revenue Bond has a fixed interest rate over its remaining five-year
life, removing variability. The Company is exposed to an interest rate risk
associated with its convertible debentures (the Debentures), which is based on
the spot market price of  U3O8. These Debentures mature in June 2017. The Company
does not expect the spot market price of  U3O8 to exceed $54.99 prior to the
Debentures maturity and, accordingly, does not believe there is any significant
interest rate risk related to these Debentures. The Company does not use
derivatives to manage interest rate risk. The following chart displays the
interest rate applicable to our Debentures 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%


Currency Risk

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

The following table summarizes, in United States dollar
equivalents, the Companys major foreign currency (Cdn$) exposures as of March
31, 2016 ($000):

|Cash and cash equivalents                | $ | 9,101   |  
|---------------------------------------- | - | ------- | -
|Accounts payable and accrued liabilities |   | (1,259  | )
|Loans and borrowings                     |   | (16,198 | )
|Total                                    | $ | (8,356  | )

The table below summarizes a sensitivity analysis for
significant unsettled currency risk exposure with respect to our financial
instruments as at March 31, 2016 with all other variables held constant. It
shows how net income would have been affected by changes in the relevant risk
variables that were reasonably possible at that date.

|                           |  | Change for           |  |   | Increase (decrease) in other |  
|-------------------------- |  | -------------------- |  | - | ---------------------------- | -
|('000s)                    |  | Sensitivity Analysis |  |   | comprehensive income         |  
|                           |  | +1% change in U.S.   |  |   |                              |  
|Strengthening net earnings |  | dollar               |  | $ | (108                         | )
|                           |  | -1% change in U.S.   |  |   |                              |  
|Weakening net earnings     |  | dollar               |  | $ | 108                          |  

36

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Credit Risk

Credit risk relates to cash and cash equivalents, trade, and
other receivables that arise from the possibility that any counterparty to an
instrument fails to perform. The Company only transacts with highly-rated
counterparties and a limit on contingent exposure has been established for any
counterparty based on that counterpartys credit rating. The Companys sales are
attributable mainly to multinational utilities. As at March 31, 2016, the
Companys maximum exposure to credit risk was the carrying value of cash and
cash equivalents, trade receivables and taxes recoverable.

ITEM 4. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures.

At the end of the period covered by this quarterly report on
Form 10-Q for the three months ended March 31, 2016, an evaluation was carried
out under the supervision of and with the participation of our management,
including the Chief Executive Officer (CEO) and Chief Financial Officer
(CFO), of the effectiveness of the design and operations of our disclosure
controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under
the Exchange Act). Based on that evaluation, the CEO and the CFO have concluded
that as of the end of the period covered by this Quarterly Report, our
disclosure controls and procedures were effective in ensuring that: (i)
information required to be disclosed by us in reports that we file or submit to
the SEC under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in applicable rules and forms and (ii)
material information required to be disclosed in our reports filed under the
Exchange Act is accumulated and communicated to our management, including our
CEO and CFO, as appropriate, to allow for accurate and timely decisions
regarding required disclosure.

Changes in Internal Control over Financial Reporting

The Company as reported in the annual report on Form 10-K was
in process of integrating Uranerz (which was acquired on June 18, 2015) into its
controls and procedures and therefore did not include an evaluation of their
internal controls. As of March 31, 2016 the Company has completed this
integration. There has been no change in
our internal control over financial reporting during the quarter ended March 31,
2016 that has materially affected, or is reasonably likely to materially affect,
our internal control over financial reporting.

PART II

ITEM 1. LEGAL PROCEEDINGS.

We are not aware of any material pending or threatened
litigation or of any proceedings known to be contemplated by governmental
authorities that are, or would be, likely to have a material adverse effect
upon us or our operations, taken as a whole that was not disclosed in the
Company Form 10-K for the year ended December 31, 2015, as filed with the SEC on
March 15, 2016.

ITEM 1A. RISK FACTORS.

There have been no material changes from the risk factors set
forth in our Annual Report on Form 10-K for the year ended December 31, 2015 as
filed with the SEC on March 15, 2016.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS.

Use of Proceeds from At-the-Market Offering

On September 29, 2015, the Company filed a prospectus
supplement (Supplement) in both Canada and the United States to its Canadian
base shelf prospectus (the Canadian Base Prospectus) and its U.S. registration
statement on Form F-10 (the Registration Statement), both of which were filed
on April 9, 2014. Concurrent with the filing of the Supplement, the Company
entered into a Controlled Equity OfferingSMSales Agreement with
Cantor Fitzgerald & Co. (Cantor), pursuant to which the Company could, at
its discretion from time to time, sell, through Cantor as agent, up to US$15.64
million worth of common shares by way of an at-the-market offering (the
ATM).

37

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The ATM commenced on September 29, 2015 and closed on March 15,
2016 upon the expiration of the Registration Statement by the Companys filing
of Form 10-K. The aggregate amount sold under the Supplement was $3.48
million. In connection with the ATM, the Company paid $0.33 million in share
issuance costs.

As of March 31, 2016 all of the $3.15 million in net proceeds
received from the offering have been used as follows:

|                                                                                 |   | Estimated         |  |   |                       | 
|-------------------------------------------------------------------------------- | - | ----------------- |  | - | --------------------- | 
|Use of Financing Net Proceeds
      (000's)                                      |   | Allocation of Net |  |   | Actual Costs Incurred | 
|(excluding General Working Capital)                                              |   | Proceeds          |  |   | to March 31, 2016     | 
|Repurchasing any Debentures
      pursuant to the Normal Course Issuer Bid       | $ | -                 |  | $ | -                     | 
|Development at its Nichols Ranch mine
      (including potential plant upgrades) |   | 2,000             |  |   | 2,000                 | 
|Development of the Canyon conventional uranium mine in
      Arizona             |   | 1,150             |  |   | 1,150                 | 
|                                                                                 | $ | 3,150             |  | $ | 3,150                 | 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURE.

The mine safety disclosures required by section 1503(a) of the
Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of
Regulation S-K are included in Exhibit 95.1 of this Quarterly Report.

ITEM 5. OTHER INFORMATION.

None.

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ITEM 6. EXHIBITS.

Exhibits

The following exhibits are filed as
part of this report:

|Exhibit |  |                                                                                                                                                                                                                   
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |  | Description                                                                                                                                                                                                       
|2.1     |  | Agreement and Plan of Merger by and among Uranerz Energy
      Corporation, Energy Fuels, Inc. and EFR Nevada Corp., dated January 4,
      2015 (1)                                                              
|2.2     |  | Amendment to the Agreement and Plan of Merger,
      dated May 8, 2015 (1)                                                                                                                                        
|2.3     |  | Membership Interest Purchase Agreement by and among
      Energy Fuels Inc., Energy Fuels Holdings Corp., Mesteña LLC, Jones Ranch
      Minerals Unproven, Ltd. And Mesteña Unproven Ltd. dated March 4, 2016 (2)
|3.1     |  | Articles of Continuance dated September 2, 2005
      (3)                                                                                                                                                         
|3.2     |  | Articles of Amendment dated May
      26, 2006 (4)                                                                                                                                                                
|3.3     |  | Bylaws (5)                                                                                                                                                                                                        
|4.1     |  | The Convertible Debenture Indenture dated July 24, 2012
      between Energy Fuels Inc. and BNY Trust Company of Canada providing for
      the issuance of debentures (6)                                        
|4.2     |  | Financing Agreement between Uranerz Energy
      Corp. and Johnson County dated November 26, 2013 (7)                                                                                                             
|4.3     |  | Bond Purchase Agreement among
      the State of Wyoming, Johnson County and Uranerz Energy Corp. dated
      November 12, 2013 (8)                                                                               
|4.4     |  | Promissory Note dated November 26, 2013 (9)                                                                                                                                                                       
|4.5     |  | Mortgage and Security Agreement
      and Assignment between Uranerz Energy Corp. and the Trustee dated November
      26, 2013 (10)                                                                              
|4.6     |  | Shareholder Rights Plan (11)                                                                                                                                                                                      
|4.7     |  | Warrant Indenture between Energy Fuels Inc. and CST Trust
      Co. providing for the issue of common share purchase warrants dated March
      14, 2016 (12)                                                     
|4.8     |  | First Supplemental Indenture among Energy Fuels Inc.,
      CST Trust Company and American Stock Transfer & Trust Company, LLC
      dated April 14, 2016 (13)                                                    
|10.1    |  | Energy Fuels 2013 Amended and
      Restated Stock Option Plan (14)                                                                                                                                               
|10.2    |  | Energy Fuels Omnibus Compensation Plan (15)                                                                                                                                                                       
|10.3    |  | Sales Agreement between Energy
      Fuels Inc. and Cantor Fitzgerald & Co. dated September 29, 2015 (16)                                                                                                         
|10.4    |  | Form of Indemnity Agreement between Energy
      Fuels and its officers and directors (17)                                                                                                                        
|10.5    |  | Employment Agreement between
      Energy Fuels Inc. and Stephen P. Antony effective October 1, 2015 (18)                                                                                                         
|10.6    |  | Employment Agreement between Energy Fuels Inc.
      and David C. Frydenlund dated March 11, 2016 (19)                                                                                                            
|10.7    |  | Employment Agreement between
      Energy Fuels Inc. and W. Paul Goranson dated March 11, 2016 (20)                                                                                                               
|10.8    |  | Employment Agreement between Energy Fuels Inc.
      and Harold R. Roberts dated March 11, 2016 (21)                                                                                                              
|10.9    |  | Employment Agreement between
      Energy Fuels Inc. and Daniel G. Zang dated March 11, 2016 (22)                                                                                                                 
|10.10   |  | Underwriting Agreement dated March 9, 2016 (23)                                                                                                                                                                   
|10.11   |  | Employment Agreement between
  Energy Fuels Inc. and Mark S. Chalmers dated April 14, 2016                                                                                                                        
|31.1    |  | Certification of Chief Executive Officer
      pursuant to Rule 13a-14(a)) under the Securities Exchange Act of 1934, as amended                                                                                  

39

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|31.2     | Certification
      of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities
  Exchange Act of 1934, as amended                        
|-------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|32.1     | Certification
      of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|32.2     | Certification
      of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|95.1     | Mine Safety Disclosure                                                                                                                                   
|101.INS* | XBRL
  Instance Document                                                                                                                                 
|101.SCH* | XBRL
  Taxonomy Extension  Schema                                                                                                                       
|101.CAL* | XBRL
  Taxonomy Extension  Calculations                                                                                                                 
|101.DEF* | XBRL
  Taxonomy Extension  Definitions                                                                                                                  
|101.LAB* | XBRL
  Taxonomy Extension  Labels                                                                                                                       
|101.PRE* | XBRL
  Taxonomy Extension  Presentations                                                                                                                

___________________________* To be filed by
amendment.

|(1)  | Incorporated by reference to Schedule B of
      Exhibit 99.1 of Energy Fuels Form 6-K filed with the SEC on May 26, 2015.                                         
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2)  | Incorporated by reference to Exhibit 10.1 of
      Energy Fuels Form 8-K filed with the SEC on March 8, 2016.                                                      
|(3)  | Incorporated by reference to Exhibit 3.1 of
      Energy Fuels Form F-4 filed with the SEC on May 8, 2015.                                                         
|(4)  | Incorporated by reference to Exhibit 3.2 of
      Energy Fuels Form F-4 filed with the SEC on May 8, 2015.                                                         
|(5)  | Incorporated by reference to Exhibit 3.3 of
      Energy Fuels Form F-4 filed with the SEC on May 8, 2015.                                                         
|(6)  | Incorporated by reference to Exhibit 99.66 to
      Energy Fuels registration statement on Form 40-F filed with the SEC on
      November 15, 2013.                
|(7)  | Incorporated by reference to Exhibit 4.1 to the
      Form 8-K filed on December 3, 2013 by Uranerz Energy Corporation.                                             
|(8)  | Incorporated by reference to Exhibit 4.2 to the
      Form 8-K filed on December 3, 2013 by Uranerz Energy Corporation.                                             
|(9)  | Incorporated by reference to Exhibit 4.3 to the
      Form 8-K filed on December 3, 2013 by Uranerz Energy Corporation.                                             
|(10) | Incorporated by reference to Exhibit 4.4 to the
      Form 8-K filed on December 3, 2013 by Uranerz Energy Corporation.                                             
|(11) | Incorporated by reference to Exhibit 10.9 to
      Energy Fuels Form F-4 filed on May 8, 2015.                                                                     
|(12) | Incorporated by reference to Exhibit 4.1 to
      Energy Fuels Form 8-K filed on March 14, 2016.                                                                   
|(13) | Incorporated by reference to Exhibit 4.1 to
      Energy Fuels Form 8-K filed on April 20, 2016.                                                                   
|(14) | Incorporated by reference from Schedule B of
      Exhibit 99.84 of Energy Fuels' registration statement on Form 40-F filed
      with the SEC on November 15, 2013.
|(15) | Incorporated by reference to Exhibit 4.1 to
      Energy Fuels Form S-8 filed on June 24, 2015.                                                                    
|(16) | Incorporated by reference to Exhibit 99.1 to
      Energy Fuels Form 6-K filed on September 29, 2015.                                                              
|(17) | Incorporated by reference to Exhibit 10.4 of
      Energy Fuels Form 10-K filed with the SEC on March 15, 2016                                                     
|(18) | Incorporated by reference to Exhibit 10.5 of
      Energy Fuels Form 10-K filed with the SEC on March 15, 2016                                                     
|(19) | Incorporated by reference to Exhibit 10.6 of
      Energy Fuels Form 10-K filed with the SEC on March 15, 2016                                                     
|(20) | Incorporated by reference to Exhibit 10.7 of
      Energy Fuels Form 10-K filed with the SEC on March 15, 2016                                                     
|(21) | Incorporated by reference to Exhibit 10.8 of
      Energy Fuels Form 10-K filed with the SEC on March 15, 2016                                                     
|(22) | Incorporated by reference to Exhibit 10.9 of
      Energy Fuels Form 10-K filed with the SEC on March 15, 2016                                                     
|(23) | Incorporated by reference to Exhibit 10.1 to
      Energy Fuels Form 8-K filed March 10, 2016.                                                                     

40

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

|                   | ENERGY FUELS INC.
|------------------ | -----------------
|                   | (Registrant)     
|                   |                  
|Dated: May 5, 2016 | By:              
|                   |                  
|                   |                  
|                   |                  
|Dated: May 5, 2016 | By:              
|                   |                  
|                   |                  

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