Ur-Energy Inc. ($URE)

Greetings. Welcome to the Ur-Energy Q1 2026 Conference Call and Webcast. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to [ Alex Ritchie ], General Counsel and Corporate Secretary. You may begin.

Thank you. Today's discussion includes forward-looking statements within the meaning of applicable securities laws. Forward-looking statements are based on management's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results to differ materially. We do not undertake to update or revise any forward-looking statements, except as required by law. Today's presentation includes a disclaimers relating to forward-looking statements, risk factors and projections, along with cautionary notes to investors. Please review these carefully together with the risk factors described in our Form 10-K and our other public filings with the SEC and Canadian securities regulators. I'll now turn the call over to our CEO and President, Matt Gili.

Thank you, Alex. On Slide 3, and thank you, everyone, for joining us today. In addition to Alex, joining me on the call are Roger Smith, our CFO; Steve Hatten, our Chief Operating Officer; Ryan Schierman, VP of Regulatory Affairs; and [ Jay Wally ], VP Finance. It is an exciting time to be a U.S. [indiscernible] producer. The nuclear and uranium market environment continues to strengthen and support our long-term growth strategy. Electricity demand growth driven by AI data center development is increasingly pushing the world towards nuclear energy for clean, reliable baseload. Nuclear momentum continues to build through reactor restarts, life extension programs and [indiscernible] development initiatives. Recently, countries such as South Korea, Taiwan and Japan, that depend on LNG imports, have increased efforts to restart their [indiscernible] nuclear generation in response to the closing of the Strait of Hormuz. And just a few weeks ago, [ Terra Power Brion ] on the first utility scale advanced nuclear power plant here in the state of Wyoming. At the same time, U.S. government policies and programs are supporting domestic nuclear fuel supply chains and regulatory reforms intend to accelerate nuclear deployment [indiscernible] the Department of Energy announced approximately $2.7 billion in contract awards to support the development of domestic low-enriched uranium and high [indiscernible] low-enriched uranium enrichment capacity. Long-term demand growth is expected to require significant new mine development. And while the nuclear industry is increasingly focused on the security rating supply, only about 4% of uranium deliveries to U.S. utilities in 2024 for U.S. origin. We believe these market tailwinds continue to highlight strategic importance of domestic union production. Now let's talk about we, Ur-Energy, are doing to contribute to the trans3formation of the nuclear industry. Slide 4. The first quarter of 2026 brought several meaningful operational wins as we continue executing on our uranium production growth strategy. At Lost Creek, we improved our operational performance, which reflects the work we've been doing to improve flow rates. We captured 110,000 pounds on resin during the first quarter. That is an increase of 41% over the last quarter and 48% more than the first quarter of 2025. We [indiscernible] package 96,000 pounds during the quarter and finished inventory at the conversion facility to more than 417,000 pounds, which is a 14% increase since year-end. We also continue to improve our cost profile at Lost Creek. The average [indiscernible] cash cost per ounce sold dropped 13% quarter-over-quarter to $37.5 per pound. This cost amount per pound includes [ Advalorum ] and severe. We sold 55,000 pounds during the quarter, which was in line with our committed delivery schedule. Note that our delivery schedule for 2026 is heavily weighted towards the second half of the year as we continue to ramp up at both mines. Our average sales price was $71 per pound, which is a 12% increase over the fourth quarter of 2025, as our sales this quarter were under newer contracts with more favorable pricing structure. We ended the quarter with $123 million of [indiscernible] cash. On Slide 5, Lost Creek. Looking forward to Lost Creek, we drummed over 57,000 in April. That's our highest monthly toll since we decided to ramp up operations in '23. Our production trend in Lost Creek continues to move in the right traction while we are still focused on getting better optimized -- we're still focused on better optimizing operations and increasing production rates. We've made some great strides ramping up production rates at Lost Creek. However, our flows continue to be impacted by fine particles from the host formation. To manage these fines, we are installing and commissioning a sand filter system that is on schedule to come online this quarter. Our 2026 production plans in the well field are focused on Phase 2 of the first mine unit, Mine Unit #1. These plans remain on schedule, with the new [indiscernible] continuing to come online. We continue to prepare for the next mine unit, Mine Unit 5, to come online in 2027. Again, while production is trending in the right direction, we believe the specific initiatives that are underway position Lost Creek for stronger production performance as the year progresses. Slide 6, Shirley Basin operations. The company reached a major milestone in April when we commenced initial mining operations at our Shirley Basin mine. After Wyoming regulators completed their inspection, we brought our first [ Hedrohouse ] online, and we are now capturing uranium on resin from production solutions. Construction and wellfield development activities is truly based and accelerated and have progressed significantly during the first quarter. By the end of the quarter, we had pilot drilled 540 production injection wells. [indiscernible] 312 of these wells and instructed 5 header houses. We have been operating 8 drills in line with our production needs. Shirley Basin is a satellite facility. We will be transporting uranium loaded resin to Lost Creek for final processing and packaging. So our next major milestone is to start moving resin to Lost Creek. At this point, the infrastructure at Shirley Basin is substantially complete. Subject to our additional and final regulatory approval, we expect to start to see shipments in the summer. This integrated operating model enhances efficiency supports production scalability and should substantially increase our year indium production. Shirley Basin is a historically significant uranium district that played an important role in the early development of ISR Mining in Wyoming, and we are on track to bring this back into commercial production soon. Slide 10, our Wyoming ISR growth portfolio. Beyond our operating projects, we continue exploration activities across our Wyoming project portfolio that will support development decisions. At our Lost Soldier project, we commenced aquifer testing in April and plan to start baseline environmental study this year. We are going to have an updated technical report, including economics, completed by year-end. There are 4,000 historied of Lost Soldier LosSoldier and is Lost Creek. So the project has strong potential to be a future satellite operation that leverages our existing infrastructure. We also completed 33 exploration [indiscernible] at our North Hadsell project before the seasonal [indiscernible] restriction started in March. The results include 13 ore grade intercepts [indiscernible] potential for stack rollfront ISR system with up to 8 individual roles. Looking ahead, we also have plans to begin a drill program of approximately 120 holes at our Lost Creek South property later this summer with the goal to further extend Lost Creek into new mine unit. And on Slide 8, closing. We ended the second quarter with $123 million in cash, over 417,000 pounds of uranium in the inventory at the conversion facility,and momentum building on both of our operating mines. As we move through 2026, our priorities remain focused. We continue to increase flow rates and optimizing operations at Lost Creek, achieved commercial production this summer at Shirley Basin, followed by production ramp-up, continue to advance our Wyoming exploration portfolio towards development decisions, continue to improve our safety culture and performance, which has already seen significant improvement and meet our 2026 uranium sales agreement commitment from existing inventory and production. On that point, our production plans still support our potential to meet these commitments after commencing shipments from Shirley Basin, bringing the sand fielders online Loss Creek and our other initiatives to continue to increase production. As I mentioned, a substantial majority of our deliveries are scheduled for later in the year. We are capturing uranium at Shirley Basin and are posed to having 2 ISR uranium mines [indiscernible] production. We are improving our production momentum. We are advancing our Wyoming ISR project pipeline, and we have a strong balance sheet. We are also bullish on the need for a larger supply of U.S.-produced uranium for an expanding nuclear industry. As one of the few U.S. uranium mining companies that is actually producing uranium, we believe Ur-Energy is well positioned to help meet the growing demand. And with that, I'll turn the call back to the operator to open it up to Q&A.

[Operator Instructions] Your first question for today is from Heiko Ihle with H.C. Wainwright..

Matt and team, nice little conference of overview or you just gave. Can you give a bit of color on what you're seeing in conversations with your utility partners given the current geopolitical risk sectors that we're just seeing around the world? I mean I assume that conversations, the i[indiscernible] is quite positive, but maybe you want to provide the audience with a bit of color on what you're seeing in the actual market.

Absolutely. I go -- okay. So what we are seeing is a lot of activity from U.S. utilities in this -- in the first quarter regarding contracting future uranium supply. Now of course -- I mean, of course, you would expect that, right? We're also seeing -- I'm trying to be very careful. I don't want to ever disclose anything confidential. We're starting to see a lot more interest in securing supply over price negotiations. I wouldn't -- kind of in summary, I go, without divulging anything confidential. There is a lot of energy right now regarding utilities looking to secure future supply. And of course, for utility, future supply is generally starts like 3 years out. But we're starting to see there's a lot of interest. We get a lot of inbound RFPs. We're very careful and choosy about what we respond to because we don't want to overcommit. We've got a very well-crafted commitment forecast, and we like to keep pounds extra so that we have the ability to be flexible in the future. But it is very strong out there right now regarding utilities looking to accounts.

Fair enough. And then just for our model, how much has been -- money has been spent at Shirley Basin year-to-date? And maybe if you want to give a bit of color on the rest of the year quarter-by-quarter, please?

Absolutely. So what I have, I'm going to answer quickly, and then I'm going to pass over to Roger to fill in the details. The entire commitment for Shirley Basin for capital this year remains at $25.5 million.

So that's unchanged?

Yes, it's unchanged. The total capital commitment for the water treatment upgrades at Lost Creek is now forecasted between $25 million and $33 million. What we did there is we've expedited and brought forward the building of those samples, which is critical to us meeting our production goals. And we have incurred a slight increase in expense by bringing those sand filters forward. Steve can go through that in more detail, but we are -- we're now at the stage the sand titers are installed on a pad plant. We're piping in the sand filters and we have the aggregate ready for installation. Steve, anything else you want to touch on that?

No, I don't think so. Just now, Heiko, that we will be focusing and we are focusing on the very detailed engineering for the Lost Creek work, working already with the construction team as well and getting procurement done as quickly as possible so we can really advance hard construction at Lost Creek this summer. But Shirley is moving along steadily. Most of the main [indiscernible] and any of the things that you see on our site show you that, So we feel good about that. Roger, did you have any further color on the quantity at Shirley Basin we spent in the first quarter?

Yes, just a bit. Thanks for the question. During Q1, we spent approximately $11 million of that $25.5 million of CapEx for this year. So we have probably just under $15 million yet to spend on Shirley Basin CapEx throughout the year.

Thanks, Roger. And thanks, Hieko, for the question. And does that cover what you're looking for?

It does. But you want to guess a little bit on a quarterly basis, like a little bit more color?

Well, I'd be -- I don't want to get -- look, it's going to -- Shirley Basin construction is heavily weighted towards the first half of the year, further quarters because we're in the very final stages of construction.

Your next question is from Anthony Taglieri with Canaccord Genuity.

Maybe just on Lost Creek. So noting the 57,000 pounds drummed in April, should we expect this to be linear for the rest of the Q2? Is there any reason why production in May and June might be a bit lower than April?

Well, again, I'm being very careful with putting out future guidance. I will say that in April, we actually exceeded our internal plans for production for the month of April. So April was a really good month. You talked about in -- I would look at more linear from a quarter-to-quarter standpoint instead a month-by-month standpoint, taking out are -- getting us -- with Shirley Basin getting us to that 1.3 million pounds.

Okay. Great. So maybe just as a follow-up for Shirley Basin. How has that start-up in versus expectations? Maybe some commentary there would be great. And what still needs to happen there from a regulatory point of view to begin shipping loaded resins to Lost Creek? And when you see summer months, is that sort of like a mid-June time line?

Okay. So I'm going to answer the first question and then hand it over to Ryan. So look, we were -- our internal plan was that we would have the ability to add [indiscernible] and start liberating uranium by the end of April, and we were able to get that time line. So we were actually a few days a week or 2 ahead of schedule. That's progressing very well on track. We're very excited about what we're seeing so far at Shirley Basin. Ryan, can you give more color into what is that final regulatory approval?

Yes. So final regulatory approval is a preoperational inspection. What this is, is just the verification that infrastructure and our programs are in place to safely do what we said we were going to. At this point, we don't believe we have anything that would preclude us from passing through that inspection. We've been preparing for it. And it's been on our radar. It's a regular part of business. Nothing out of the norm for us on that.

And when we say when we expect to do that, again, being careful, careful, but your original assumption was fairly on track of when we expect the timing.

Your next question for today is from Jeff Grampp with Northland Capital Markets.

Matt, so outside of the wastewater and some of the kind of upgrades to address the fines issue, it sounds like there's some other general optimization initiatives at Lost Creek that you guys are evaluating or implementing. I was just hoping to get a little more detail on what some of those other projects are? And are these kind of cost optimization, production optimization or any other details you can share?

Okay. So the other main business improvement activities at Lost Creek are not capital improvements at all, but they're really -- they're procedural and operational improvements. And they're specifically regarding our maintenance systems, just getting a well-built, well-articulated and well-executed maintenance program for the plant itself as well as bringing in procurement, getting -- we beefed up our procurement team and getting it aligned with maintenance so that your parts are there when you need them and your kits are ready when you need to do maintenance. Those are the 2 other initiatives, the primary initiatives at Lost Creek regarding beefing up operation.

Got it. Great. Appreciate that. My follow-up on the exploration side, specifically looking at Lost Soldier, I noted you guys are looking at kind of some pre-permitting activities, technical report coming later this year. Is the technical report, would you say kind of a prerequisite, if you will, in getting some positive data there to kind of, I guess, more fully look at a full-blown kind of permitting exercise? Or how comfortable are you guys kind of trying to accelerate potentially permitting and getting that to production relative to technical report and more kind of technical evaluation internally?

Yes. I understand your question, Jeff. It's a really good question. Look, we are progressing along with the technical report of Lost Soldier, and we will do the work to the standard we always do the work, which is extremely high standard with economics. We have initiated or are in the process of initiating the baseline surveys as the beginning of our permitting because we feel very comfortable in spending that money before we finalize the technical report to make a construction decision. It's a modest spend at this time, but it is prudent, and it will accelerate the permitting process should we make a positive investment decision at the end of this year.

Got it. And in general, I'm not trying to hold you to too specific time line, but is, I don't know, 2, 3 years a good kind of rule of thumb for permitting a project like that? Or am I one way or another? I would say 3 to 5 years is a fair estimate.

Your next question for today is from Joseph Reagor with ROTH Capital Partners.

Most of my questions have already been touched on, but a couple of other kind of fine-tuning things. Matt, in your prepared remarks, you commented on contracts being second half weighted. Is that just because Q1 was so light that even if we put the rest of them evenly across the year, then it's going to be second half weighted? Or even over the remaining 3 quarters, is it still second half weighted?

Yes. I mean so it's weighted in the second half of the year. You know how lumpy our delivery contracts are. And that's one of the consequences of the way that we contract is it comes in real lumpy. We focused our delivery commitments for the second half of the year to -- let's be fair, to match our production profile for ramp-up, Joe. And that's -- so I would -- we would -- we don't -- we put out some guidance in the 10-Q to show the delivery commitments by quarter. They're weighted to the second half to match our production ramp up. Joe, does that kind of answer the question you're looking for?

Yes. Yes. No, that's fair. And then just in general, as you think about kind of how Lost Creek has performed since it restarted, there's been a number of challenges or hurdles as we've gone along from hiring to getting enough header houses built. But do you feel that the underlying resource has performed as expected, and this is simply a matter of you got to get enough header houses built so that you can operating so you can get production up to nameplate? Or is there anything that has underperformed kind of under the hood that we haven't talked about yet?

Okay. Very, very good question, Joe. All right. So at Lost Creek, and this is reflected in our updated technical report earlier this year. Lost Creek has demonstrated the ability to produce uranium as an ore body. The resource is very solid. We've updated that resource, and we're very confident in that resource. And to the point, we actually added almost 4 million pounds into that. So the resource itself and the ability to get uranium into solution has been very well documented at Lost Street. What -- and there were challenges in the startup and there were -- labor was tight and drill rigs were tight and all those things, and we've worked our way through all those. The thing that is hindering us from increasing ramp-up even further right now is those fines that are coming in from the well field. It's important to note, our hypothesis right now, those fines aren't really present in the ore body. What they are, they appear to be iron mineralization that is being liberated by the kind of the same process with the oxygen that we're adding into the [ Lxivian ] oxygen we're adding into the solution is also oxidizing some iron mineralization. We refer to colloquially as orange grunge that comes out on top of our resin columns. So we really see -- while we didn't anticipate needing prefilter into the plant before, -- we now have -- we're installing the sand filters so that we have -- we're prefiltering all of the solution coming into the plant as well as on all the header houses, we've installed -- all the new header houses for Mine Unit 1, we have installed filtration at the discharge of the production wells as well. So I mean, in summary, very confident in the resource at Lost Creek. And it's demonstrated, it's proven itself multiple times as being there and being very, very amenable to what we do. So again, very confident in the resource itself. I don't have something that's hidden that you -- I don't think you know about and really see the solution to the fines as being the next major change and inflection point in the production ramp-up curve at Lost Creek.

Good to hear. I just had to ask, obviously.

Your next question for today is from Soundarya Iyer with B. Riley Securities.

Matt and team, congratulations on the quarter. So I just have 2 questions. Starting with the realized price, you realized about $71 a pound on Q1 sales, which was a meaningful step-up from last quarter and last year. So how should we think about the blended realization as we go into the second half of 2026?

Yes. Very good questions,. Yes, look, we've disclosed this in the 10-Q as well. We are -- we have committed to deliver 1.3 million pounds for the year, and that we expect that realized price from that 1.3 million pounds to be $83.2 million. So that tells you what the blended. You do that math and you see what the blended price is for the year. The 71 that we received in the first quarter was a good contract, relatively better than some of the other contracts we're delivering into this year.

Got it. That's helpful. And then on just the macro front, the U.S. uranium, we have just a handful of producers with permitted ISR sites. How are you thinking about the M&A landscape right now or going into -- going through 2026? What's the appetite for organic growth or inorganic growth in this industry today?

Okay. So very proven question. Look, I believe that all the CEOs you talk to are going to tell you that we are in a period that appears to be amenable -- I'm being very careful in my words here, appears to be amenable to consolidation. And so it's a very exciting time to be a uranium producer in the United States. There is opportunity for consolidation. And we at Ur-Energy are very well placed to participate in that consolidation. We are producing today. We're located in our corporate headquarters are in Casper, Wyoming, and we have a very healthy balance sheet with the cash necessary to utilize for high-quality opportunities should they arise..

I will now hand the floor over to Valerie to moderate webcast questions.

Thank you. Our first question, we touched on this earlier, can you describe some of the terms on the long-term contracts that you've signed recently?

Well, I don't -- we don't disclose that. I mean what I can tell you is that the present appetite for long-term contracts right now. And really regurgitating what [ Cameco ] talks about quite a bit. You see your term price, your term price is in the low 90s right now, and that's -- all these prices being escalated typically around 3%. But you're seeing term price being around low 90s, you're starting -- you see almost all contracts now include a portion of the delivery that is market related with floors and ceilings. The floors and ceilings typically run kind of in the -- right now, in the kind of 80% as the floor and towards -- 20% is the ceiling. Each one of these contracts is different. Each one of these contracts has its own nuance. And I'm really just [indiscernible] taking what you've heard [indiscernible] at [ Cameco ] disclosed. So I'm being a little careful, but that's generally the industry trend right now.

Okay. There are no more questions from the webcast.

All right. Thank you,

There are no further questions from the phone lines. I will now hand the floor back to management for closing remarks.

Thank you, everyone, for participating in the call today. Really a very strong quarter from the standpoint of the ramp-up at Lost Creek and Shirley Basin. We're very proud of the activities we've completed. We're very, very energized by what we're seeing going forward. We look forward to 2026 to be a real inflection year for Ur-Energy, and we're proud to be part of the U.S. nuclear fuel cycle. So thank you, everyone, for joining today.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.