Wyoming Uranium to Power US Nuclear Grid for AI Data Centre Build Out

• Nuclear Fuels Corp is focusing on uranium exploration in Wyoming, with a large project called Kaycee.
• The company has a strategic relationship with enCore Energy, which provides technical expertise and a potential path to production.
• Wyoming offers advantages for uranium exploration and production, including faster permitting processes.
• The uranium market is experiencing a correction but fundamentals remain strong, with increasing demand expected.
• Nuclear Fuels has access to extensive historical data and is conducting an active drilling program to identify new resources.

The global energy landscape is transforming significantly, focusing increasingly on clean, reliable power sources. In this context, uranium and nuclear energy are regaining attention as critical components of a low-carbon energy mix.

The Uranium Market: Current State & Future Prospects

The uranium market has experienced significant volatility in recent years, but industry insiders argue that the fundamental supply-demand dynamics remain highly favorable for producers. William Sheriff, Executive Chairman of enCore Energy, provides context on the current market situation: What we're experiencing the last four months is the first correction since the uptick started in 2020, so the first correction arguably in 3-3.5 years of any significance. Sheriff says this correction coincides with typical summer market patterns in the resource sector. However, he emphasizes that this should be viewed as a temporary setback rather than a change in the overall positive trend for uranium.

Several factors are contributing to the bullish long-term outlook for uranium:

• Growing global demand for clean energy
• Limited new supply coming online
• Geopolitical tensions affecting traditional supply sources
• Increased interest from institutional investors

Sheriff argues that the current market represents "a multi-decade opportunity" rather than a short-term trading play. This perspective is crucial for investors considering entering the uranium sector, as it suggests the potential for sustained growth and returns over an extended period.

The Role of US Domestic Production

A key theme emerging in the uranium market is the renewed focus on domestic production in the United States. This trend is driven by energy security concerns and the desire to reduce reliance on foreign sources, particularly from geopolitically sensitive regions. Companies like Nuclear Fuels Corp and enCore Energy are positioning themselves to capitalize on this shift towards domestic production. Their focus on Wyoming, a state with a rich history of uranium mining and favorable regulatory environment, is particularly noteworthy.

Panel with Executive Chairman of enCore Energy, William Sheriff & Chief Executive Officer of Nuclear Fuels, Greg Huffman

Wyoming: The Epicenter of US Uranium Exploration

Wyoming has emerged as a focal point for uranium exploration and production in the United States. The state offers several advantages for companies operating in this sector:

• Extensive uranium resources
• Well-established regulatory framework
• Faster permitting processes compared to other jurisdictions
• Infrastructure and expertise from historical mining activities

Greg Huffman, CEO of Nuclear Fuels Corp, highlights the significance of operating in Wyoming:

"Wyoming provides a huge amount of benefits when it comes to earlier-stage exploration if you want to see that through to production. We're looking at three to two to 3 years from discovery through to production. It's a very fast process with Wyoming being an agreement state with the NRC."

This accelerated timeline from discovery to production is a crucial advantage for investors, as it potentially allows for faster returns on investment compared to projects in other jurisdictions.

The Kaycee Project: A Unique Exploration Opportunity

Nuclear Fuels Corp's flagship Kaycee project in Wyoming exemplifies the potential of uranium exploration in the state. The project benefits from several key attributes:

• Large land package covering over 40 miles of potential mineralization
• Access to extensive historical data from over 4,000 drill holes
• Consolidated ownership, allowing for comprehensive exploration for the first time
• Potential for in-situ recovery (ISR) mining, a cost-effective and environmentally friendly extraction method

Bill Sheriff describes the scale and potential of the Kaycee project:

"Imagine a string of pearls on a necklace that only has four or five, maybe six of these pearls that are visible based on historic information, but the string or the trend has been well identified in terms of overall trend... Now imagine that string to be over 40 miles long. This is the scale that we're looking at."

This analogy provides investors with a vivid picture of the exploration potential at Kaycee. The company's strategy involves identifying and connecting these "pearls" of mineralization along the trend, potentially leading to the discovery of significant new uranium resources.

The Strategic Relationship between Nuclear Fuels & enCore Energy

A unique aspect of the Nuclear Fuels Corp story is its strategic relationship with enCore Energy. This partnership provides several advantages:

• Access to technical expertise from an established producer
• Potential fast-track to production through enCore's back-in rights
• Financial support and market credibility

The structure of this relationship is particularly favorable for Nuclear Fuels Corp shareholders. Bill Sheriff explains:

"There are very few companies, if any, whereby the parent company that kickstarted it has the opportunity to come in and fund the junior to production."

This arrangement provides Nuclear Fuels Corp. with a clear path to potential production, addressing a key risk often associated with junior exploration companies.

Nuclear Fuels Corp is engaged in an active exploration program at the Kaycee project. Key elements of this strategy include:

• Utilizing historical data to guide new drilling
• Employing modern exploration techniques and technologies
• Focusing on areas with potential for ISR-amenable resources
• Maintaining a flexible, results-driven approach to target generation

Investors should monitor the company's ongoing drilling program for regular updates, as positive results could be significant catalysts for the stock.

The Broader Uranium Market Outlook

While the near-term focus for companies like Nuclear Fuels is on exploration and resource definition, the broader uranium market dynamics provide an important context for investors. Bill Sheriff offers a perspective on the current state of the market and its future potential:

"The fundamentals of the industry are intact, robust, and nothing has come along that's done anything other than enhance the need of it. When you start looking at AI and those sorts of things, we aren't talking about 10 or 20% needed in the electrical grid. We're talking about 100, 200, 300% increase on the electrical grid."

This outlook suggests that even if some projections for nuclear energy growth prove optimistic, the overall trend remains strongly positive for uranium demand. Key factors supporting this bullish view include:

• Growing global recognition of nuclear energy's role in addressing climate change
• Increasing electricity demand, particularly from emerging technologies like AI and electric vehicles
• Limited new uranium supply coming online in the near term
• Potential supply disruptions from geopolitical tensions

The uranium sector presents a compelling investment opportunity, driven by strong fundamentals and growing recognition of nuclear energy's role in a low-carbon future. Companies like Nuclear Fuels Corp, with its strategic relationship with enCore Energy and focus on the favorable Wyoming jurisdiction, offer investors exposure to this potential upside. As with any resource investment, thorough due diligence is essential. However, the uranium sector warrants serious consideration for investors seeking exposure to the clean energy transition and potential long-term growth.

The Investment Thesis for 'Nuclear Fuels and enCore Energy

• Exposure to uranium, a critical component of clean energy transition
• Strategic focus on Wyoming, a top-tier jurisdiction for uranium exploration and production
• Unique relationship between Nuclear Fuels (exploration) and enCore Energy (production expertise)
• Large-scale exploration potential at Nuclear Fuels' Kaycee project
• Clear pathway to potential production through enCore's back-in rights
• Active exploration program with regular news flow expected
• Management team with a proven track record in the uranium sector

The uranium sector presents a compelling long-term investment opportunity, driven by growing clean energy demand and limited new supply. Companies like Nuclear Fuels Corp and enCore Energy are well-positioned to capitalize on this trend, with a strategic focus on domestic US production in favorable jurisdictions like Wyoming.

While risks exist, the potential for significant resource discovery and development, coupled with a clear pathway to production, makes this an intriguing sector for investors seeking exposure to the energy transition. As with any resource investment, thorough due diligence and a long-term perspective are essential.

Macro Thematic Analysis

The uranium market is at an inflection point, driven by macro factors reshaping the global energy landscape. The imperative to reduce carbon emissions and combat climate change has led to reevaluating nuclear energy's role in the clean energy mix. This shift is occurring against a backdrop of increasing global electricity demand, fueled by population growth, urbanization, and the proliferation of energy-intensive technologies like artificial intelligence and electric vehicles.

Geopolitical tensions, particularly involving major uranium-producing countries like Russia and Kazakhstan, have heightened concerns about energy security. This has led to a renewed focus on domestic production in countries like the United States, creating opportunities for companies operating in stable jurisdictions. The supply side of the uranium market remains constrained, with years of low prices leading to underinvestment in new projects. As existing mines deplete and demand grows, a looming supply gap could increase prices in the coming years.

Institutional investors increasingly recognise the potential in the uranium sector, with generalist funds starting to allocate capital to uranium equities. This trend could accelerate as ESG considerations evolve to recognize nuclear energy's role in decarbonization. However, challenges remain. Public perception of nuclear energy is still mixed in many countries, and regulatory hurdles can slow the development of new projects. The long lead times for nuclear power plant construction also mean that demand growth may be gradual rather than explosive.

"This Market's got a lot more legs, and this is more of a career-type opportunity if you're in the industry, whereas the other was a trading opportunity."