enCore Energy - US Uranium Pure-Play Opportunity to Capitalize on Improving Domestic Market Fundamentals

• enCore Energy is a US-based uranium producer with 3 production facility plants with 2 currently in production in South Texas using in-situ recovery (ISR) methods
• The company is now generating revenue and has an aggressive growth plan to ramp up production to 400,000-500,000 lbs this 2024 and higher over the next few years
• enCore has signed uranium supply contracts with 6 US nuclear utilities so far, with deliveries spread out over the next several years
• The goal is to reach production of 3 million pounds per year by end of 2026 by bringing on additional production capacity in Texas
• enCore sees opportunity in the US uranium market given the geopolitical concerns around imports and utilities' desire for domestic supply

About enCore Energy

enCore Energy Corp (NASDAQ: EU, TSXV:EU) presents a compelling opportunity as a growing US-based uranium producer. The company has achieved a significant milestone by bringing two production facilities online in South Texas within the past year, positioning it to capitalize on the robust long-term fundamentals of the domestic uranium market.

The Company operates multiple production facilities and is committed to providing clean, reliable, and affordable fuel for nuclear energy. enCore's experienced team, consists of industry experts with extensive knowledge in In-Situ Recovery (ISR) uranium operations and the nuclear fuel cycle, exclusively utilizing ISR technology for uranium extraction. With a successful track record in South Texas, enCore Energy has future projects in the pipeline, including the Dewey-Burdock project in South Dakota and the Gas Hills project in Wyoming. The company also holds other assets, such as significant New Mexico resources, non-core assets, and proprietary databases. enCore Energy emphasizes the importance of working with local communities and indigenous governments to create positive impact from their corporate developments.

Interview with Executive Chairman, William Sheriff

Production Ramp-Up Underway

enCore's two producing assets, the Rosita and Alta Mesa ISR projects, are now generating revenue - Rosita came online in 2023, and Alta Mesa in 2024. Executive Chairman Bill Sheriff highlighted the accomplishment in a recent interview, stating:

"Bringing on two of those [production facilities] within eight months, essentially on time from what was promised, quite a monumental feat. Now we're set to enjoy the revenue stream for both of those, including a pretty aggressive growth plan."

The near-term focus is on steadily increasing production levels at the two facilities. At Rosita, this will involve adding new satellite well-fields over time to feed the central processing plant. Alta Mesa has more flexibility to scale up by connecting additional wells to its existing trunk line system.

Sheriff outlined the production targets, "At Alta Mesa, you're going to see just more or less a gradual increase. We're looking at probably 400,000 or 500,000 pounds this year. Next year, we'd certainly like to see that go up, if not even beyond that would be our objective."

Longer-term, enCore's goal is to reach total production of 3 million pounds per year within a 3-year timeframe. This would involve maxing out capacity at the two South Texas plants and potentially recommissioning a third facility in the region.

Contracts with US Utilities

A key differentiator for enCore is its revenue visibility, with uranium supply contracts already in place with a number of major US nuclear utilities. Sheriff confirmed the company has signed six contracts so far, in addition to a legacy contract with a trading company. All future contracts are expected to be with utilities.

"The contracts that we've signed, and I believe there's six of them now, have been with US nuclear utilities. Typically what we like to see is 30-day pay-up on receipt," Sheriff explained.

Contract volumes are heavily weighted to the next two years as production ramps up. Beyond that, enCore will have increasing uncommitted production available to sell into new contracts or on the spot market.

US-Focused Strategy

enCore is laser-focused on the US uranium market, which it sees as the most attractive globally, despite some near-term softness. The company expects domestic utilities to emphasize securing US supply over the long run, regardless of how the current geopolitical tensions play out.

"[US utilities'] best approach, regardless of how any of those geopolitical issues turn out, is going to be an emphasis on acquiring domestic supply... We think we're in the right place at the right time, selling to the right customer group," Sheriff noted.

This US-centric strategy allows enCore to maintain a streamlined operation without getting distracted by the global competitive landscape. Management keeps an eye on market developments but dedicates its time to delivering on targets.

Growth Potential

While focused on its existing asset base, enCore sees potential to grow its production profile even further over time. Its Wyoming assets could add incremental production of 1 million pounds each down the road with additional permitting and development.

The company also remains open to accretive M&A opportunities, though it will be highly selective. Sheriff pointed to enCore's track record of value-adding transactions and emphasized it would only pursue deals that enhance its production timeline or volumes.

"We clearly like M&A but at the same time, we aren't going to get bigger just for getting bigger's sake. It has to be accretive to us in terms of our timeline for pounds into the market or our number of pounds in terms of actual production," he explained.

Strengthened Financial Position

enCore is well funded to deliver on its growth plans thanks to its improved balance sheet and revenue generation. A recent transaction with Boss Energy allowed the company to reduce debt while still maintaining a 100% interest in its core assets.

This financial flexibility allows enCore to systematically invest in expanding production without being dependent on the external market. Sheriff highlighted the benefits on the recent earnings call: "It definitely helps when you sleep a bit at night, you got choices, you got options."

Conclusion

enCore Energy offers investors exposure to a growing, US-focused uranium producer with a clear path to increased production and cash flow. The company's long-term contracts with utilities provide downside protection while allowing significant upside participation as it expands capacity. With a strong financial position and experienced management team, enCore is well positioned to emerge as the leading US ISR uranium producer in the years to come.

The Investment Thesis for enCore Energy

• Rapid production growth from a current base of 400-500K lbs/yr to a targeted 3M lbs/yr within 3 years
• Exposure to higher US uranium prices via long-term contracts with inflation protection
• 100% US-focused strategy to benefit from utilities' desire for reliable domestic supply
• Proven management team with track record of execution
• Clean balance sheet with flexibility to internally fund growth or pursue accretive M&A
• Significant resource base with additional upside potential in Wyoming and through exploration

enCore Energy offers a unique way to gain exposure to the strengthening US uranium market fundamentals as a pure-play domestic producer. The company's transformation over the past year to a revenue-generating producer with visible growth ahead makes it stand out from the competition. For investors bullish on the long-term outlook for nuclear power, enCore presents a high-torque opportunity with a straightforward path to creating shareholder value.

Macro Thematic Analysis

The outlook for the uranium market has improved significantly over the past few years on the back of tightening supply/demand fundamentals and growing policy support for nuclear power. Demand is expected to increase steadily in the coming decades as countries look to nuclear as a reliable, zero-carbon baseload power source to complement intermittent renewable energy. At the same time, supply is constrained following years of low prices that led to mine shutdowns and a lack of investment in new capacity.

In the US, these macro tailwinds are amplified by rising concerns around energy security and the geopolitical risks associated with import reliance. The US is the world's largest consumer of nuclear power but domestically produces less than 5% of its uranium needs. Recent trade actions and proposed legislation aim to address this by supporting the development of a robust domestic supply chain.

As Bill Sheriff put it, "We think it's the right place and the right time, and selling to the right customer group, and that's why we're focused 100% in the US."

This creates a highly positive backdrop for US uranium producers like enCore Energy. As a US-focused ISR producer with the ability to scale up low-cost production, the company is ideally positioned to benefit from the expected increase in contracting activity from US utilities in the coming years.