enCore Energy Provides 5 Year Uranium Contracting Strategy Outlook

Rhea-AI Summary

enCore Energy Corp. (NASDAQ: EU) has revealed its 5-year uranium contracting strategy, highlighting seven contracts with U.S. nuclear power plants and one legacy contract with a uranium trading company. The strategy balances revenue stability with spot price exposure through base escalated, un-hedged spot, and collared contracts. Contracted deliveries start at 190,000 lbs U3O8 in Q4-2024, reaching 955,000 lbs by 2029. Estimated revenues range from $11-17M in Q4-2024 to $87-105M in 2029, varying with uranium spot prices between $60-120/lb. The projections assume full utilization of delivery flexibilities and contract extensions.

Positive

• Secured 7 contracts with U.S. nuclear power plants plus 1 legacy contract
• Growing delivery volumes from 190,000 lbs in Q4-2024 to 955,000 lbs in 2029
• Potential revenue growth from $11M to $105M depending on spot prices
• Strategy maintains upside exposure while securing base revenue

Negative

• Revenue heavily dependent on uranium spot price fluctuations
• Actual deliveries may vary significantly on quarterly basis

Insights

Financial Analyst

This uranium contracting strategy reveals significant revenue visibility and growth potential for enCore Energy. The company has secured 8 contracts with a mix of U.S. nuclear plants and trading firms, incorporating a sophisticated blend of base escalated, spot and collared pricing mechanisms. The contracted delivery volumes show steady growth from 190,000 lbs in Q4 2024 to 955,000 lbs in 2029.

The revenue projections demonstrate strong upside potential in various uranium price scenarios. At a $60/lb baseline, annual revenues grow from $11M in Q4 2024 to $87M in 2029. In a bullish $120/lb scenario, revenues could reach $105M by 2029. Importantly, these figures exclude potential spot market sales of non-contracted production, suggesting additional upside.

The strategy effectively balances predictable cash flows with market exposure through price collars and spot-linked contracts, providing downside protection while maintaining upside participation in uranium's price appreciation.

Market Research Analyst

The contracting strategy positions enCore advantageously in the uranium market revival. With nuclear energy gaining prominence in clean energy transitions, securing long-term supply contracts with U.S. utilities demonstrates strong market positioning. The progressive increase in contracted volumes from 190,000 lbs to 955,000 lbs suggests growing production capacity and market confidence.

The diverse contract structure, including base escalated and collared pricing, provides strategic flexibility while ensuring stable cash flows. The price sensitivity analysis from $60 to $120/lb shows significant revenue leverage to uranium prices, particularly in early years. This structure allows enCore to capitalize on potential market upside while maintaining operational stability through guaranteed minimum prices.

NASDAQ:EU
TSXV:EU
www.encoreuranium.com

DALLAS, Nov. 4, 2024 /PRNewswire/ - enCore Energy Corp. (NASDAQ: EU) (TSXV: EU) (the "Company" or "enCore"), a uranium producer and America's Clean Energy Company™, today provides the Company's contracting strategy ("Contracting Strategy") and 5 year forward outlook regarding its uranium sales agreements.  As of October 31, 2024, the Company has executed seven (7) contracts to supply uranium to nuclear power plants in the United States and holds one (1) legacy contract with a uranium trading company.  Our Contracting Strategy Outlook represents our annual contracted sales only. This Contracting Strategy provides enCore with significant exposure to future spot uranium prices on a percentage of our future planned production. The Company's Contracting Strategy has achieved the objective of establishing a base level of revenue while retaining significant exposure to upside price action. 

The Contracting Strategy provides a balance of multiple customers using a blend of base escalated, un-hedged spot and collared contracts (spot related with floor prices and ceiling prices).  While strict confidentiality clauses prevent the exact nature of each contract, the table below provides guidance as to:

• Annual total contracted delivery quantities, including firm and optional deliveries;
  
  
• Estimated contracted sales revenue including sensitivities to spot price volatility. 

The projections assume that all uranium delivery flexibilities and optional contract extensions are fully utilized by the customer using current pricing of uranium without inflation adjustment. The estimated revenue does not include inflation-adjustments to price collars, base escalated prices, nor fees associated with deliveries.  This forecast is limited to contracted quantities only and do not include non-contracted produced uranium that could be sold into the spot market for any given year, and thus the table below only reflects a portion of expected total revenue.  Annual revenues are shown in aggregate quantities, and actual deliveries will happen throughout a given year according to customer timing, and as a result, the actual deliveries will vary significantly on a quarterly basis in any given year.

YEAR		URANIUM SPOT PRICE ($/lbs. U3O8)				Contracted Deliveries (lbs. U3O8) 1
		$60	$80	$100	$120
Q4-2024	millions	$11	$13	$15	$17	190,000
2025	millions	$44	$53	$61	$69	740,000
2026	millions	$56	$68	$80	$91	920,000
2027	millions	$57	$68	$78	$86	925,000
2028	millions	$72	$79	$84	$88	750,000
2029	millions	$87	$94	$101	$105	955,000

1 Projected Contract Deliveries assume that customer optional delivery flexibility and optional contract extensions are fully executed by the Customer.

The Company intends to provide updates to the Contracting Strategy and the 5-year forward-looking revenue projection in the 4^th quarter of each year providing transparency and notes that this is not intended to account for the Company's total production or revenue for any given year.

Paul Goranson, Chief Executive Officer, stated: "enCore has been working with existing and potential customers since 2021 to establish a set of uranium supply agreements to create a base committed demand for a portion of our planned uranium production. Each of these sales agreements have varied delivery and pricing mechanisms that fit enCore's requirements and enCore's customer's requirements. As the uranium markets have strengthened, we have been able to secure better terms with the execution of each new sales agreement."

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 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, 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.sedar.com. 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.

FAQ

What is enCore Energy's (EU) projected uranium delivery volume for 2025?

enCore Energy projects contracted uranium deliveries of 740,000 lbs U3O8 for 2025.

How much revenue could enCore Energy (EU) generate in 2029 at $100/lb uranium?

At a uranium spot price of $100/lb, enCore Energy projects revenue of $101 million in 2029.

What is enCore Energy's (EU) initial contracted delivery volume for Q4-2024?

enCore Energy's initial contracted delivery volume for Q4-2024 is 190,000 lbs U3O8.

How many uranium supply contracts does enCore Energy (EU) currently have?

enCore Energy has seven contracts with U.S. nuclear power plants and one legacy contract with a uranium trading company.