NASDAQ:EU
TSXV:EU
www.encoreuranium.com
DALLAS, Aug. 14,
2024 /PRNewswire/ - enCore Energy Corp.
(NASDAQ: EU) (TSXV: EU) (the "Company" or "enCore"),
a uranium producer, today reports results from the three and six
month periods ended June 30, 2024.
enCore continued to enjoy rising revenue due to increasing
production and sales of U3O8 ("yellowcake")
in the first half of 2024. The Company commissioned the Alta
Mesa In-Situ Recovery ("ISR") Central Processing Plant and
Wellfield ("Alta Mesa") late in the quarter (June 13, 2024 NR) as its second uranium producing
facility in the United States
("US"), making enCore the only company with two uranium facilities
in the US currently producing yellowcake. The Company met its
delivery commitments under contracts with the delivery of 410,000
pounds, partially purchased and partially produced, of
U3O8 during the six month period.
enCore continued to move its pipeline of projects ahead with
permitting activities in south Texas and preparation for a drilling program
in Wyoming.
![enCore Energy Corp. logo (CNW Group/enCore Energy Corp.) enCore Energy Corp. logo (CNW Group/enCore Energy Corp.)](https://mma.prnewswire.com/media/2481772/enCore_Energy_Corp__enCore_Energy_Provides_Q2_2024_Results_and_O.jpg)
Six Month Period Performance Highlights (in USD unless
otherwise noted):
- 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)
|
3 months
ended
|
|
6 months
ended
|
|
|
June 30,
2024
|
June 30,
2023
|
June 30,
2024
|
June 30,
2023
|
|
|
|
|
|
Revenue and other
income:
|
5,320
|
*
|
35,714
|
*
|
Cost of goods
sold
|
8,323
|
*
|
36,374
|
*
|
Gross
Profit
|
(3,003)
|
*
|
(660)
|
*
|
|
|
|
|
|
Expenses (Detail
below)
|
6,359
|
7,014
|
16,111
|
14,747
|
Loss from
Operations
|
9,362
|
7,014
|
16,771
|
14,747
|
Currency translation
of
|
|
|
|
|
Subsidiaries
|
1,369
|
(527)
|
5,024
|
(1,197)
|
|
|
|
|
|
Comprehensive
Loss
|
|
|
|
|
Attributable to
enCore
|
|
|
|
|
Shareholders:
|
9,624
|
6,990
|
18,499
|
13,795
|
|
|
|
|
|
Loss per
share
|
(0.05)
|
(0.06)
|
(0.08)
|
(0.11)
|
* In 2023, the
Company recorded a gain of $858,000 on the sale of its uranium
investment for the three months ended June 30, and a gain of
$1,959,000 for the six months ended June 30. This income was
classified as investment income, rather than revenue, as the
company had not yet commenced production.
|
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. As this
production commenced with only seventeen days remaining in the
second quarter, no dried uranium was inventoried during the
quarter. Average wellfield solution head grades of 120
mg/L U3O8 achieved during the last two
weeks of the quarter indicated productivity at levels exceeding our
expectations. 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. The Company holds other assets including
significant New Mexico resources,
non-core assets and proprietary databases. enCore is committed to
working with local communities and indigenous governments to create
positive impact from corporate developments.
www.encoreuranium.com
Cautionary Note Regarding Forward Looking
Statements:
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
Certain information contained in this news release,
including: any information relating to the Company being a leading
uranium company, statements regarding future or potential
production, statements regarding the Company's anticipated increase
in revenue from Alta Mesa production, statements regarding the
Company's projected cost/revenue ratio, statements regarding future
plant feed development for Rosita, future nuclear industry outlook,
and any other statements regarding future expectations, beliefs,
goals or prospects; may constitute "forward-looking information"
and "forward-looking statements" within the meaning of applicable
Canadian and United States
securities laws and regulations (collectively, "forward-looking
statements"). All statements in this news release that
are not statements of historical fact (including statements
containing the words "expects", "is expected", "does not expect",
"plans", "anticipates", "does not anticipate", "believes",
"intends", "estimates", "projects", "potential", "scheduled",
"forecast", "budget" and similar expressions or variations
(including negative variations) of such words and phrases, or
statements that certain actions, events or results "may", "could",
"would", "might" or "will" be taken) should be considered
forward-looking statements. All such forward-looking statements are
subject to important risk factors and uncertainties, many of which
are beyond the Company's ability to control or predict.
Forward-looking statements necessarily involve known and unknown
risks, including, without limitation, risks associated with general
economic conditions; adverse industry events; future legislative
and regulatory developments; the ability of enCore to implement its
business strategies; including achieving expected levels of
production at Rosita and Alta Mesa in the planned time frame or at
all; and other risks. A number of important factors could cause
actual results or events to differ materially from those indicated
or implied by such forward-looking statements, including without
limitation exploration and development risks, changes in commodity
prices, access to skilled mining personnel, the results of
exploration and development activities; production risks; uninsured
risks; regulatory risks; defects in title; the availability of
materials and equipment, timeliness of government approvals and
unanticipated environmental impacts on operations; litigation
risks; risks posed by the economic and political environments in
which the Company operates and intends to operate; increased
competition; assumptions regarding market trends and the expected
demand and desires for the Company's products and proposed
products; reliance on industry equipment manufacturers, suppliers
and others; the failure to adequately protect intellectual
property; the failure to adequately manage future growth; adverse
market conditions, the failure to satisfy ongoing regulatory
requirements and factors relating to forward looking statements
listed above which include risks as disclosed in the Company's
annual information form filings. Should one or more of these risks
materialize, or should assumptions underlying the forward-looking
statements prove incorrect, actual results may vary materially from
those described herein as intended, planned, anticipated, believed,
estimated or expected. The Company assumes no obligation to update
the information in this communication, except as required by law.
Additional information identifying risks and uncertainties is
contained in filings by the Company with the various securities
commissions which are available online at
www.sec.gov and www.sedarplus.ca.
Forward-looking statements are provided for the purpose of
providing information about the current expectations, beliefs and
plans of management. Such statements may not be appropriate for
other purposes and readers should not place undue reliance on these
forward-looking statements, that speak only as of the date hereof,
as there can be no assurance that the plans, intentions or
expectations upon which they are based will occur. Such
information, although considered reasonable by management at the
time of preparation, may prove to be incorrect and actual results
may differ materially from those anticipated. Forward-looking
statements contained in this news release are expressly qualified
by this cautionary statement.
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SOURCE enCore Energy Corp.