Ur-Energy - First Mover Advantage for US Uranium Producer

• Strong attendance and positive sentiment at the World Nuclear Fuel Markets conference
• Utilities expecting to need more uranium in the near future, open to various contract terms
• Demand for nuclear energy increasing, including from data centers located near plants
• Supply gap likely to persist as uranium miners face challenges ramping up production
• Ur-Energy well-positioned as a U.S. producer with permits and ability to expand

Why Uranium Demand is Primed to Surge

The global energy landscape is undergoing a transformation, with increasing recognition of the crucial role nuclear power must play in achieving carbon reduction goals. As countries turn to nuclear as a reliable, clean energy source, the demand for uranium is set to surge in the coming years. Against this backdrop, uranium mining companies are poised to benefit, but not all are equally positioned to capitalize on the opportunity. U.S.-based Ur-Energy stands out as a producer ready to help fill the impending uranium supply gap.

Positive Sentiment in the Industry

Ur-Energy CEO John Cash recently attended the Atlanta World Nuclear Fuel Markets conference, which saw record attendance. Cash noted the excitement and positive outlook across the industry, from utilities to investors to mining companies.

This optimism is well-founded, as nuclear utilities express near-term plans to secure additional uranium supply.

"Many of them are telling us that they're going to need more pounds in the not-too-distant future; they'll be coming out with additional RFPs," Cash stated.

Importantly, utilities appear open to various contracting arrangements, including contracts without price ceilings - a notable shift that bodes well for uranium miners.

Growing Demand from Multiple Angles

The bull case for uranium extends beyond the traditional nuclear power plant customers. Cash highlighted the emergence of data centers as a significant new source of demand for nuclear energy. Located in close proximity to nuclear plants, these data centers are already providing a boost to utilities' bottom lines.

"We had a couple of utilities that were very explicit and said they are already seeing tremendous benefit from data centers that they're supplying energy to," Cash explained. "The demand for electricity from those data centers is immense, absolutely immense. And that demand is already here today."

Data centers are attracted to nuclear energy because it offers clean, reliable baseload power at a reasonable cost. This trend is expected to accelerate, benefiting both utilities and uranium suppliers. Additionally, developing small modular reactors (SMRs) will likely open up new markets and use cases, further bolstering uranium demand.

Interview with Chief Executive Officer, John Cash

The Supply Gap Challenge

While uranium demand is undoubtedly on an upward trajectory, miners' ability to keep pace remains in question. Cash emphasized the small number of uranium companies globally and the smaller subset moving aggressively towards production. He sees the supply gap taking longer than expected to fill as miners grapple with the challenges of ramping up.

"Ramping up these days is not easy," Cash noted. "I feel a bit sorry for some of my peers just now getting started." Labor shortages, rig availability, supply chain issues, cost inflation, and technical hurdles all present obstacles that could constrain supply additions.

Ur-Energy's Advantages

Against this backdrop, Ur-Energy is well-positioned to help bridge the uranium supply deficit. The company has two fully permitted projects in Wyoming: Lost Creek, which is already operating, and Shirley Basin, currently under development. Together, these projects give Ur-Energy licensed capacity of 2.2 million pounds per year.

Importantly, Ur-Energy has a large land package around Lost Creek, including several pipeline-connectable and truck-able satellite projects. Permitting these as satellites to Lost Creek could accelerate their development timelines to 3-4 years, compared to the 5-15 years a greenfield project might take. This gives Ur-Energy a key advantage in quickly bringing on new production as the market demands it.

The Investment Thesis for Ur-Energy

• Leverage to rising uranium prices as a U.S. producer with 2.2M lbs/yr of licensed capacity
• Ability to expand Lost Creek production via satellite deposits with shorter permitting timelines
• 6 existing sales contracts providing revenue certainty and optionality on future contracts
• Low-cost ISR production with industry-leading low carbon emissions
• Exposure to growing U.S. uranium demand and potential purchasing preferences/requirements

The stars are aligning for a sustained uranium market uplift, driven by nuclear energy's critical role in decarbonization and the emergence of new demand sources like data centers and SMRs. However, a supply-side response will likely lag, putting upward pressure on uranium prices. As an established, permitted U.S. producer with organic growth options, Ur-Energy is strongly leveraged to benefit from uranium's impending bull market.

Macro Thematic Analysis

The world is waking up to the necessity of nuclear power in the clean energy transition. This realization, combined with new demand drivers, has set the stage for a uranium bull market of potentially historic proportions.

"Full steam ahead right now for the nuclear industry," summarized Ur-Energy CEO John Cash after the recent World Nuclear Fuel Markets conference. His statement captures the essence of the broader thematic: nuclear energy is back in vogue, and uranium is along for the ride.

Nuclear has earned its seat at the clean energy table by providing the always-on, carbon-free backbone that weather-dependent renewables simply cannot. The energy crisis and ambitious decarbonization goals have only highlighted its indispensable nature. With the rise of energy-hungry data centers choosing to locate near nuclear plants, a powerful new demand driver has emerged.

The kicker is that utilities are welcoming these data center neighbors with open arms, as they provide a steady revenue stream and smoother reactor operations. This symbiotic relationship is poised to accelerate nuclear demand and, by extension, uranium consumption.

Yet, for all the well-justified uranium optimism, the question remains: can supply keep up? That looks like a tall order, even with higher incentive prices. But therein lies the opportunity. The longer supply lags demand, the higher uranium prices are likely to go, and the more outsized the rewards for those miners able to deliver the critical fuel.

In this environment, uranium investors will likely be well served by focusing on producers, not just developers. Companies like Ur-Energy, with permitted projects, an operating track record, and a line of sight on growth, could be among the biggest winners in uranium's unfolding bull market.