- The Company recorded revenue of $36 million from the sale of yellowcake under sales contracts with nuclear utility customers;
- Uranium production commencement from two of its three plants in Texas within an eight-month time period making enCore the only company currently producing uranium at more than one facility in the US;
- Contract deliveries of 410,000 pounds of U3O8 at an average sales price of $87.11 per pound fully meeting the Company’s contractual commitments;
- The Company entered its seventh uranium supply contract, in Q2 2024, with a US nuclear utility to deliver 200,000 pounds of U3O8 per year in 2028 and 2029 using a pricing structure assuring inflation adjusted realized prices above current spot prices presently in the low $80 per pound range;
- The Company continues uranium supply contract negotiations with US nuclear utilities with flexible inflation adjusted pricing designed to assure the Company of known floor prices and allowing its participation in significant upward pricing.
Summary of Select Financial Highlights for the Quarter and Six Months Ended June 30, 2024 and 2023: (in thousands of US dollars)
Revenue Discussion
The Company’s sales of 410,000 pounds of yellowcake were sourced from both purchased pounds and those produced at its Rosita In-Situ Recovery (“ISR”) Central Processing Plant (“Rosita”). These purchased pounds increased the cost of goods sold. As Alta Mesa came on-line late in Q2 there were no sales of product from Alta Mesa.
Revenues are expected to increase materially during the second half of the year with Alta Mesa’s production being the major source of this expected increase.
Expense Discussion
The increase in expenses is primarily due to activity associated with the start-up of Alta Mesa. Operational start-up inefficiencies at the Rosita Extension Wellfield also adversely affected expenses. With both facilities in the early phases of start-up, they have incurred accelerated expenses and investments crucial to fully achieving our growth strategy and meeting our operational capacity.
Alta Mesa Q2 Performance
On June 13, 2024 the Company announced initial production from Alta Mesa.
Drilling has been continuous at Alta Mesa as the Company plans on systematically increasing the number of injection and production wells producing in phases through the end of the year and beyond.
Outlook and Subsequent Events
The Company’s outlook is positive with significant and increasing revenue from Alta Mesa production contributing to financial results in the second half of 2024 and beyond as additional production wells are completed. The cost/revenue ratio is projected to decline as the Company increases production from Alta Mesa and to a lesser extent Rosita for the remainder of the year. This trend is projected to accelerate as the Company expects to reach and exceed one million pounds a year production rate in 2025.
Additional plant feed for Rosita will be developed at the Upper Spring Creek Project where the Company has submitted various permit and amendment applications to the regulatory authorities in anticipation of a first half start-up in 2025. Detailed confirmation drilling along with monitor and base well installation will commence before the end of Q3 2024.
The nuclear industry outlook remains extremely positive with demand projections outpacing supply for the foreseeable future driven in part by increased electrical demand from Artificial Intelligence (“AI”) and the commitment of many sectors of the economy to achieve zero carbon.
Regulatory actions and permitting delays, which restrict or withdraw large uranium deposits from development and production, combined with geopolitical tensions, provide a positive backdrop for uranium pricing. Current contracting conditions remain favorable, with contract pricing now higher at a spot price in the low $80s than it was when the spot price reached its twelve-month high of $115 per pound.
Qualified Person
John M. Seeley, Ph.D., P.G., C.P.G., enCore’s Manager of Geology and Exploration, and a Qualified Person under NI 43-101, has reviewed and approved the technical disclosure in this news release on behalf of the Company.
Shareholder Information
The Company’s full quarterly and annual filings are available on SEDAR+ at www.sedarplus.ca, on the U.S. Securities and Exchange Commission’s EDGAR website at www.sec.gov and on enCore’s website at www.encoreuranium.com. Financial results were prepared in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board.
About enCore Energy Corp.
enCore Energy Corp., America’s Clean Energy Company™, is committed to providing clean, reliable, and affordable fuel for nuclear energy as the only United States uranium producer with multiple production facilities in operation.
The enCore team is led by industry experts with extensive knowledge and experience in all aspects of In-Situ Recovery (“ISR”) uranium operations and the nuclear fuel cycle. enCore solely utilizes ISR for uranium extraction, a well-known and proven technology co-developed by the leaders at enCore Energy.
Following upon enCore’s demonstrated production success in South Texas, future projects in enCore’s production pipeline include the Dewey-Burdock project in South Dakota and the Gas Hills project in Wyoming.
