Ur-Energy's Proven Low-Cost Production Positioned for Uranium Bull Market

• Ur-Energy is a Wyoming-focused ISR uranium producer that has been producing for over 10 years from its Lost Creek mine
• The company is looking to ramp up production at Lost Creek and bring its second mine, Shirley Basin, online in the next few years
• Lost Creek is licensed for 1.2M lbs/yr production, with the processing plant permitted for 2.2M lbs/yr to allow for toll processing
• Ur-Energy sees ongoing uranium price strength driven by growing demand and limited supply, creating opportunities for the company
• The company remains disciplined in its growth plans, focused on developing economic projects rather than growth at any cost

Ur-Energy's Clear Growth Path

With the uranium market heating up in recent years, investors are taking a close look at the companies best positioned to capitalize on strengthening fundamentals. One company that stands out is Ur-Energy, an established in-situ recovery (ISR) uranium producer focused on Wyoming. The company has been producing from its flagship Lost Creek mine for over a decade and is now looking to ramp up output while advancing its second major project, Shirley Basin, towards production.

A key differentiator for Ur-Energy is its status as a proven producer in a market where many companies remain in the exploration and development phase. Lost Creek has been in operation since 2013, demonstrating the technical capabilities of the Ur-Energy team. "We built it out in 2012 and 2013, started it in August of 2013, had some really good, exceptional production, very low cost from that mine," explains CEO John Cash.

While production was allowed to decline in the weak post-Fukushima market, Lost Creek has responded well as Ur-Energy has moved to ramp it back up to capitalize on improving uranium prices.

"Early last year, the uranium market really began to improve. As it did, we were able to sign up more long-term contracts with major utilities and as we signed up those contracts, they gave us the faith to go out and start hiring, start drilling and start ramping production back up," says Cash.

Interview with Chief Executive Officer, John Cash

Scalable Production

A major positive for Ur-Energy is the scalability of production at Lost Creek. The mine is licensed for 1.2 million pounds per year, while the processing plant is permitted for 2.2 million pounds per year. This excess capacity is intentional, allowing the company to process uranium from its other projects like Shirley Basin or even toll process material for other producers in the area.

Providing important flexibility as the company looks to grow its production, Cash elaborated on the strategy:

"We have always intended to toll process either from one of our other facilities like Shirley Basin or from competitors and so that's why we overbuilt and over licensed that plant."

Shirley Basin, The Next Leg of Growth

Beyond Lost Creek, Ur-Energy is advancing its Shirley Basin project as the next source of production. Shirley Basin is fully permitted and ready for construction. The only gating factor is additional contracts to support the economics.

"As we're able to layer in more sales contracts and we believe we've got a home for that production, that will be our decision point to build out Shirley Basin and get it into production," outlines Cash. Management is taking a prudent approach, ensuring it has sales contracts in place before committing the capital to move forward with the project.

Margin Focus

A key theme that comes up repeatedly when discussing Ur-Energy is the management team's focus on margin and economics. The company is taking a disciplined approach to growth, focusing on low-cost scalable pounds rather than growth for growth's sake.

"We've had a lot of opportunity on the M&A front to go out and make acquisition of projects that would probably be break-evens of you know $85, $90, maybe some of them even $100 a pound - they're not in the market today despite a hot market," Cash explains.

"We are interested in growing the company through greenfield work of our own assets, especially at Lost Creek. We have a lot of room to grow there."

This disciplined mindset should serve investors well. By focusing on economic pounds, Ur-Energy will be well positioned to deliver profits even if uranium prices pull back from current levels.

Supply-Demand Fundamentals Remain Compelling

Underpinning the Ur-Energy story is a strong uranium market driven by compelling supply-demand fundamentals. Demand continues to grow, with China alone building around 10 new reactors per year. Meanwhile, supplies remain constrained as mines have been slow to ramp up. This has created a growing gap between supply and demand.

While Ur-Energy is bullish on the uranium price, the company is not simply waiting for higher prices to drive growth. It is proactively signing long-term contracts with utilities to lock in attractive rates and provide the cash flow to support production increases. This allows the company to benefit from strong spot prices while providing downside protection.

The Investment Thesis for Ur-Energy

• Proven low-cost ISR uranium producer in stable U.S. jurisdiction
• Scalable production at Lost Creek with excess licensed capacity
• Shirley Basin provides clear path to further growth once contracts support development
• Disciplined management team focused on margin over growth at any cost
• Exposure to rising uranium prices via uncontracted production and long-term contracts
• Consider for uranium exposure as supply-demand fundamentals drive prices higher

With two low-cost scalable mines in Wyoming, a proven management team, and a disciplined focus on economic production, Ur-Energy is well positioned to capitalize on the strong uranium market. As the company ramps up production at Lost Creek and advances Shirley Basin, investors stand to benefit from its unique mix of near-term growth and long-term optionality. With uranium prices expected to continue rising faster than inflation due to growing structural supply deficits, Ur-Energy provides an appealing way to gain exposure to the improving uranium fundamentals.

Uranium Insights

The uranium market appears to be in the early innings of a major bull market driven by a growing structural supply deficit. Demand is rising, led by rapid reactor buildouts in China and elsewhere. Meanwhile, supplies remain constrained as mines have been slow to respond to higher prices after a prolonged bear market. This has created an unsustainable gap between supply and demand.

"We expect to see in the long run - now I'm not talking about the near term or the intermediate term, you know next three or four years, but in the longer term - we expect to see the price of uranium continue to go up faster than inflation because there's more and more demand."

This captures the crux of the macro opportunity in the uranium space. For investors, the key is finding companies with exposure to rising prices that can deliver that exposure at a low cost. Ur-Energy fits that bill with its scalable, low-cost mines in Wyoming. As a proven producer, it stands out from many competitors still in the exploration and development stage. With a disciplined management team, clear growth path, and compelling valuation, Ur-Energy is an intriguing way to play the uranium bull market.