Ur-Energy Ramps Up Production Amid Uranium Supply Challenges

• Ur-Energy is ramping up production at its Lost Creek facility in Wyoming, with improving operational metrics, and preparing to bring its second mine, Shirley Basin, online by early 2026.
• The company has secured seven contracts worth approximately 5.84 million pounds over the next few years, primarily with US utilities and at favorable pricing terms that include inflation escalation.
• Ur-Energy faced challenges with production costs in 2024 but reported in Q1 2025 that flow rates have improved significantly, now producing at around 400,000 pounds annualized with continued positive trends.
• The company estimates production costs of approximately $45/lb at Lost Creek and $50/lb at Shirley Basin as they achieve economies of scale, with both operations having break-even prices well below the current long-term uranium price of $80/lb.
• CEO John Cash believes the uranium market remains in a supply deficit, with many promised projects unlikely to materialize, potentially requiring another $10-20/lb price increase to incentivize sufficient new production.

In a uranium market characterized by tight supply, Ur-Energy Inc. stands out as one of the few active producers in North America. In a recent interview, CEO John Cash provided insights into the company's production ramp-up, contract portfolio, and outlook for the uranium market. As a US-based producer at a time of geopolitical uncertainty and potential trade restrictions, Ur-Energy's position carries particular significance for investors monitoring the uranium sector.

Operational Status & Production Ramp-Up

Ur-Energy has been producing uranium at its Lost Creek mine in Wyoming since 2013, though it scaled back operations when uranium prices declined around 2018. The company is now ramping up production at Lost Creek while simultaneously developing its second Wyoming mine, Shirley Basin, which is expected to be operational by early 2026.

"We're very excited about our second mine that we're in the process of building out right now, also here in Wyoming. It's called Shirley Basin. So that should be done with construction very late this year and online by early next year that will take our licensed mine capacity up to 2.2 million pounds per year." 

The company has faced challenges in its production ramp-up during 2024, primarily related to training new staff and achieving operational efficiencies. However, Q1 2025 brought significant improvements as the company reported in a recent press release.

"Happy to say and many people have probably already seen the press release that we put out a few days ago on Q1. We're working our way out of that. Flow rates have come up dramatically. We are producing consistently now at a rate of around 400,000 pounds on an annualized basis. That's dramatically better than where we left 2024 production."

The CEO attributed the improved performance to increasing staff experience and confidence. With 19 drill rigs operating at Lost Creek and two more now at Shirley Basin (with plans to add four more rigs at Shirley Basin later this summer), the company is positioning itself for continued production growth.

Contract Portfolio & Market Dynamics

Ur-Energy has secured seven contracts worth approximately 5.84 million pounds over the next few years, primarily with US utilities. These contracts generally include base pricing with escalation for inflation, providing some protection against rising costs.

"Right now we've got seven contracts in place worth about 5.84 million pounds over the next few years. The vast majority of that is base price with escalation. So as inflation goes up, the price of that sales contract goes up."

For 2025, the company's contract commitments total 440,000 pounds, increasing to over 1.2 million pounds in 2026. Cash expressed growing confidence in the company's ability to meet these commitments through increased production rather than purchasing uranium on the market.

The CEO emphasized the distinction between spot and term markets, noting that most legitimate producers focus on term contracts rather than the thinly traded spot market:

"Legitimate producers, they sell into the term market. They don't focus on the spot. The spot market is incredibly thinly traded especially over the last few months, and utilities, they spend most of their money buying in the term market."

While the spot price has been under pressure, currently trading below $70/lb, the long-term price remains robust at around $80/lb. Cash noted that Ur-Energy's break-even price is "around 45 as we get ramped up in production at Lost Creek, around 50 at Shirley," providing healthy margins at current term prices.

Shirley Basin Development Progress

The development of Ur-Energy's second mine, Shirley Basin, appears to be proceeding according to schedule. The company has already completed significant portions of the construction work, taking advantage of a mild winter that allowed continuous operations.

"We've done so much last year and early this year was a very good winter. So we were able to work through most of the winter out there without plowing the roads. And so we've got several of the buildings refurbished. We have done compaction now, nearly finished with that for the foundation of the satellite plant. Roads are in, power lines are in, monitor wells are in." 

The company has also made progress in staffing the new operation, with most senior managers and about 10 hourly staff already on site. Cash indicated they plan to hire approximately 40-50 more hourly staff by late summer or early fall to ensure proper training before production begins.

Ur-Energy plans to truck loaded resin from Shirley Basin to Lost Creek for final processing, allowing the company to leverage its existing infrastructure. Cash noted that the "back end of the plant is up and running. It is ready to receive those pounds from Shirley Basin."

Interview with Chairman, President & CEO, John Cash

Production Costs & Efficiency Improvements

A key focus for Ur-Energy has been reducing production costs through operational improvements and achieving economies of scale. The company reported losses per pound of $6.19 in 2024, compared to a profit of nearly $31/lb in 2023. Cash explained this disparity as largely due to low production volumes in 2024 and the need to purchase uranium at higher market prices to fulfill contracts.

Looking forward, Cash outlined expected production costs:

"For Lost Creek as we ramp up production and flow there, we're looking at $45 or so a pound all-in cost. For Shirley Basin, we're still looking at around $50."

The CEO emphasized the importance of economies of scale in driving down costs:

"There are a lot of fixed cost in any mining operation, in situ mines are no different. So we need to overcome those fixed costs, things like land holdings, insurance, electricity, all of those things, regulatory oversight which is not insignificant in the nuclear industry, those are all fixed. So it doesn't matter if you produce one pound a year or a million pounds a year, those costs don't change."

The company monitors several key performance indicators daily, including cost per pound, pounds produced, flow rates per well, total flows, number of header houses online, and percent recovery in the plant. Cash expressed satisfaction with the current head grade at Lost Creek, noting it "continues to be pretty high... that's been pretty common and sustainable at Lost Creek all the way since 2013."

Geopolitical Environment & Regulatory Developments

As a US-based uranium producer, Ur-Energy occupies a potentially advantageous position in the current geopolitical environment, which includes discussions of tariffs and Section 232 investigations into critical minerals.

Cash indicated that potential tariffs would have minimal impact on Ur-Energy: 

"Fortunately as a US producer it has very little impact on us. We're producing here in the US. We're largely selling to US utilities, a little bit to utilities in Europe, but nearly 100% are here in the US."

Regarding the recent Section 232 investigation for critical minerals, which explicitly includes uranium, Cash observed this was "a bit of a shock to industry" but could potentially lead to supportive measures for domestic producers. The Department of Commerce must complete its investigation by approximately October 12, 2025, after which the administration will have 90 days to determine what action, if any, to take.

Cash referenced the previous Section 232 investigation for uranium, which resulted in the development of a uranium reserve that benefited Ur-Energy through government purchases at favorable prices. He suggested that the current investigation might yield similar supportive measures for the domestic industry.

Ur-Energy appears to be turning a corner operationally after facing challenges in its production ramp-up. With improving flow rates at Lost Creek and the Shirley Basin mine on track for production in early 2026, the company is positioning itself to fulfill its contract commitments without needing to purchase uranium on the market.

The company's status as a US producer with established production, favorable long-term contracts, and a second mine coming online potentially gives it a strategic advantage in the current geopolitical environment. However, challenges remain in achieving and maintaining the production levels and cost efficiencies necessary to maximize profitability in a market that, while improved from historical lows, still may require higher prices to incentivize adequate new supply.

For investors, Ur-Energy represents one of the few pure-play uranium producers with current production and clear growth plans in a jurisdiction with strong nuclear infrastructure and increasing policy support for domestic uranium production.

The Investment Thesis for Ur-Energy

• Producing Status: One of the few active uranium producers in North America, with actual production experience since 2013
• Growth Trajectory: Production ramping up at Lost Creek and second mine (Shirley Basin) expected online by early 2026, potentially doubling capacity
• Contract Security: Seven contracts in place worth 5.84 million pounds over the next few years, primarily with inflation-protected pricing
• Domestic Advantage: As a US producer selling primarily to US utilities, largely insulated from potential tariffs or trade restrictions
• Economic Viability: Break-even costs of approximately $45-50/lb versus term prices of $80/lb providing healthy margins
• Supply Security: Potential beneficiary of government policy supporting domestic uranium production, including possible Section 232 measures
• Experienced Management: Team with proven ability to build and operate ISR uranium facilities
• Macro Tailwind: Positioned in a market with persistent supply deficits that may require higher prices to incentivize adequate new production

Ur-Energy appears to be turning a corner operationally after facing challenges in its production ramp-up. With improving flow rates at Lost Creek and the Shirley Basin mine on track for production in early 2026, the company is positioning itself to fulfill its contract commitments without needing to purchase uranium on the market.

The company's status as a US producer with established production, favorable long-term contracts, and a second mine coming online potentially gives it a strategic advantage in the current geopolitical environment. However, challenges remain in achieving and maintaining the production levels and cost efficiencies necessary to maximize profitability in a market that, while improved from historical lows, still may require higher prices to incentivize adequate new supply.

For investors, Ur-Energy represents one of the few pure-play uranium producers with current production and clear growth plans in a jurisdiction with strong nuclear infrastructure and increasing policy support for domestic uranium production.

Uranium Market Outlook

The global uranium market continues to face structural supply challenges despite rising prices. With long-term contract prices holding at approximately $80/lb, the market signals remain insufficient to stimulate the development of many new projects required to meet growing demand. As John Cash noted, 

"We've got a lot of companies out there making grandiose promises about what they can do. I don't think a lot of them are going to be successful."

The hesitancy of established producers like Cameco to rapidly expand production, despite favorable prices, highlights the persistent challenges in bringing new supply online. Regulatory hurdles, skilled labor shortages, and the technical complexities of uranium mining continue to constrain supply growth.

Meanwhile, nuclear power is experiencing renewed interest globally as a reliable, carbon-free baseload energy source. Small modular reactors (SMRs) and advanced reactor designs represent potential new demand sources, while existing reactors continue to require stable fuel supplies.

The Section 232 investigation into critical minerals, including uranium, reflects growing recognition of the strategic importance of domestic uranium production. This policy focus could create additional support mechanisms for US producers like Ur-Energy. Encapsulating the fundamental disconnect between projected and realistic uranium supply in the coming years, Cash observed, 

"I think we're in for a bit of a shock. As you say, the supply is not as advertised. There's not as many pounds advanced at all."

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