EnCore Energy's U.S. Uranium Ambitions

• Encore Energy is dedicated to in-situ production of uranium from sandstone uranium deposits in the U.S., focusing solely on the domestic energy market.
• There are rumors about Encore writing down the value of Alta Mesa by $120 million, but Bill Sheriff clarifies that the value has been allocated to various aspects of the acquisition, not as a lump sum.
• Despite a static market and challenges in gaining notice, Encore positions itself as a uranium producer rather than a miner, leveraging its unique in-situ production process.
• The company has aggressive production plans, targeting a 3 million pound/year run rate within 3 years, potentially expanding further with strategic mergers and acquisitions.
• Sheriff touches on the global uranium market dynamics, indicating potential supply constraints from Kazakhstan and the shifting focus of major producers towards China, highlighting the importance of domestic production in the U.S.

How this emerging U.S. uranium producer could provide impressive returns for investors seeking domestic energy security

EnCore Energy is a uranium exploration and production company focused entirely on assets within the United States. Based in Corpus Christi, Texas, the company has positioned itself to become a major domestic uranium supplier through the acquisition and advancement of low-cost in-situ recovery (ISR) projects.

Led by industry veteran William Sheriff, EnCore Energy has quietly accumulated a strong portfolio of production-ready assets, including the Rosita and Kingsville Dome plants in Texas and the Alta Mesa project in New Mexico. The company aims to reach 3 million pounds of annual uranium production within the next 3 years, ramping up to 5 million pounds in subsequent years.

Major Acquisitions Solidify Position

Over the past few years, EnCore has been highly acquisitive, consolidating a dominant land position across Texas and New Mexico. The company now controls approximately 30% of U.S. ISR uranium production capacity.

In particular, the $120 million Alta Mesa acquisition stands out given the project's size, low costs and multi-decade potential. EnCore was able to acquire the asset at a significant discount to the estimated net asset value of $240-250 million. Alta Mesa comes with a substantial upside, as only 10% of identified resource areas have been drilled to date.

Production Ramp-Up On Track

EnCore Energy has set aggressive timelines to restart production at its Texas plants and commence operations at Alta Mesa. Despite inflationary pressures and supply chain issues, the company appears on track to meet these targets.

At Rosita, refurbishment activities are underway with uranium production expected in the second half of 2023. Meanwhile, drilling is accelerating at Alta Mesa ahead of a projected startup in early 2024. Hitting these milestones on time and within budget will be a strong positive catalyst for EnCore.

Potential Cost Advantages

As an ISR operator focused entirely within the U.S., EnCore Energy could have significant cost advantages over peers. ISR is widely considered the lowest-cost uranium mining method. Additionally, the warm climate in Texas eliminates the need for insulation or buried plumbing. EnCore Energy estimates its U.S. production costs will be meaningfully below global averages.

Strong Management Pedigree

EnCore Energy is led by a management team with extensive uranium development experience. CEO William Sheriff previously built Energy Metals Corporation into a top U.S. uranium producer prior to its acquisition by Uranium One. His deep industry expertise enhances the company’s credibility and prospects for successful execution.

U.S. Security of Supply Needs

Nuclear utilities within the U.S. currently import over 90% of their uranium needs. However, there is bipartisan support to establish a domestic uranium reserve and incentivize domestic production. As the leading U.S. focused uranium company, EnCore Energy is well-positioned to capitalize on procurement quotas or other measures aimed at strengthening American energy security.

Takeaway for Investors

With production restarting imminently and a clear path to much larger output ahead, EnCore Energy offers investors unique exposure to the coming U.S. uranium resurgence. As domestic nuclear growth accelerates amid energy security concerns, EnCore's assets and capabilities are poised to deliver outsized returns. For investors seeking leveraged exposure to rising uranium prices and America's nuclear ambitions, EnCore may be the ultimate pick-and-shovel play.

The Investment Thesis for EnCore Energy

Focused entirely on the U.S. market, which has major uranium supply/demand deficits and a strong long-term outlook for nuclear power. Being a pure-play U.S. uranium company positions EnCore well to benefit from expected growth in domestic demand.

• Near-term production and cash flow. With the Rosita plant starting up in late 2023 and Alta Mesa in 2024, EnCore will soon transition from developer to producer status. This should unlock significant value as they prove up resources and ramp up low-cost production.
• Significant leverage to rising uranium prices. As a future producer capable of delivering large volumes of uranium into a supply-constrained market, EnCore offers high torque to the uranium price. Even moderate price increases could boost profit margins dramatically.
• Potential for lower costs than peers. By focusing on ISR assets in warm climate Texas, EnCore anticipates industry-leading production costs. This gives the company resilience against price volatility.
• Strong and proven management team led by CEO William Sheriff, who has successfully built uranium production companies before. His experience reduces execution risk.
• Opportunity to consolidate assets in a fragmented industry. EnCore has the project pipeline and balance sheet to continue acquiring synergistic U.S. uranium assets at attractive valuations.

EnCore Energy's pure-play U.S. focus, near-term low-cost production capability, leverage to rising prices, and experienced team make it an exciting investment vehicle for profiting from the coming domestic nuclear renaissance. As EnCore executes and scales up output, its upside potential is very strong.