Uranium Energy 2026 Q4 Earnings Call

Please go ahead. Thank you, operator, and good morning, everyone.

A presentation accompanying today's call is available on our website. Some of the commentary today will include forward-looking statements, and I would encourage everyone to review the cautionary language on slide 2 of the presentation. In addition, during today's call, we will be discussing certain non-GAAP financial measures. Please refer to our presentation for additional information. With that, let's begin with the highlights of a transformational year for UEC. 12 months ago, we produced uranium from only one mine in one state. Today, we produce from two mines in two states and are well underway in building a third at Ludeman. Fiscal 2026 established UEC as a multi-mine American uranium producer.

Just as important, in a single year, we demonstrated that we can grow our operating team, which now stands at more than 250 people, double our drill rig count to 40, and continue to build and commission new mines, all while executing a differentiated strategy of vertical integration from mining through refining and conversion. I want to take a moment to recognize our people. Behind every number you will hear today are teams in Wyoming and Texas who hired and trained new operators, built and brought new header houses online, recommissioned the Hobson plant, and started up Burke Hollow, the largest new in situ recovery uranium mine to come online in the U.S. in over a decade, and one that began as our own discovery. This is what rebuilding America's uranium industry looks like. Skilled, well-paying jobs in the rural communities where we operate.

To our team and to those communities, thank you. On our last call, we said new header houses would lift production and that the rise in cost per pound seen in the third quarter was temporary. This proved true as we delivered. Fourth quarter production rose 157%, total cost per pound fell by 33%, and our unhedged strategy resulted in what we believe is the highest realized price among publicly traded uranium producers. The foundation of our competitive advantage includes the largest uranium resource base in the U.S., arguably the largest ever assembled in this country, combined with $753 million in liquid assets and no debt. Fiscal 2026 was the year we built the platform. Fiscal 2027 is the year we start to scale it with an unparalleled combination of workforce, drill rigs, in-ground resources, and balance sheet strength. Turning to operations. Combined, Christensen Ranch and Burke Hollow produced nearly 83,000 pounds of precipitated uranium and dried and drummed U3O8 in the fourth quarter, up 157% from the third quarter at a cash cost of about $30 per pound and a total cost of about $36.50 per pound.

At Christensen Ranch, production doubled to more than 65,000 pounds as the three new header houses in Wellfield 11 ran for a full quarter. Cash costs fell to about $28 per pound and total costs to about $36 per pound, a 35% reduction in total cost per pound in a single quarter as higher volumes moved through the same plant. At Burke Hollow, our first full quarter delivered more than 17,000 pounds at a cash cost of about $36 per pound and a total cost of just under $40 per pound.

This first phase was limited to a small section of the first production area to establish a playbook of key operating parameters ahead of expansion across the full well field. For the full fiscal year, our first full year of production, we produced more than 229,000 pounds at a cash cost of about $34 and a total cost of $39.94 per pound. Since commissioning, we have produced about 359,000 pounds. These production numbers are precipitated uranium and dried and drummed U3O8. Beyond Christensen Ranch and Burke Hollow, our development pipeline advanced on every front, which I will cover shortly. On the financial side, our unhedged strategy has not changed. In a market facing a structural supply deficit, we seek to maintain exposure to pricing upside for our shareholders rather than lock it into contracts signed at legacy prices.

This year, we sold 400,000 pounds at a weighted average realized price of $93.13 per pound, which we believe is the highest among publicly traded uranium producers, generating revenue of $37.3 million and gross profit of $16.9 million. That revenue reflects a deliberate choice. We ended the year holding 1.26 million pounds of uranium in inventory, worth about $109 million at current market prices, nearly three times this year's revenue, plus the roughly 359,000 pounds produced and held at our Irigaray and Hobson plants. We could have sold far more, and we chose not to. Our strategy is to hold inventory into a tightening market and sell into strength for the benefit of our shareholders. Our balance sheet is what gives us the relatively unique luxury of having that choice. We have $753 million in liquid assets, including $495 million in cash and no debt.

We are never a forced seller. Turning to the tightening U.S. market, several forces are converging as we head into next year. At the end of 2027, the waivers under the U.S. ban on Russian uranium imports expire, and the ban takes full effect. The United States is now in a race to stand up domestic mining, conversion, and enrichment capacity. New enrichment capacity only works with a reliable supply of U3O8 and UF6 behind it. At the same time, the U.S. government's own requirements are growing. The U.S. Department of Energy, through the National Nuclear Security Administration, issued a request for information on domestic capability to supply unobligated U.S. origin uranium and conversion services through the 2040s, 4 million pounds of U3O8 and 1,500 metric tons of uranium as UF6 each year, with delivery starting as soon as 2030.

In August, the U.S. Army selected five developers to build nuclear microreactors at military installations with more than 20 expected under its Janus Program, all requiring unobligated U.S. origin uranium and conversion services. Those needs cannot be met from allied nations. Unobligated supply can only come from U.S. sources, U.S. mines, U.S. technology, and U.S. conversion. Conversion is arguably the biggest bottleneck in the entire nuclear fuel supply chain. In our response to the National Nuclear Security Administration, we made it clear that UEC is positioned to fully support its uranium requirements as our production in Texas and Wyoming ramps up, and through our refining and conversion subsidiary to provide the conversion services it needs. No other company in the United States is building a solution from the mine through conversion.

These demand signals confirm why we are building United States Uranium Refining and Conversion Corp., extending UEC beyond mining into the next stage of the fuel cycle. This year, working with our engineering partner, Fluor, URNC finalized its regulatory engagement strategy and began preparing its license application to the Nuclear Regulatory Commission. We are advancing toward a Class 4 cost estimate, which we expect to be ready in mid-2027. Site selection continues to move forward. Behind this progress is a team that has grown to 63 individuals in less than a year, comprised of process engineers, chemists, nuclear fuel specialists, construction professionals, and other subject matter experts. There is currently only one operating conversion facility in the United States. It was built in the 1950s. Building the next one is a once-in-a-generation project, and you can feel the passion our team brings to it.

URNC will be U.S. technology so that its output can qualify as unobligated U.S. origin supply for the U.S. government. To protect that, URNC has put a technology control plan in place for export-controlled information, and our team has completed comprehensive training in this regard. Turning to our uranium assets, our current operating platform is built on two production hubs in Wyoming and South Texas, each with a central processing plant fed by satellite mines. This is supported by two major development projects we are advancing: the Sweetwater hub in Wyoming and Roughrider in Saskatchewan. At Christensen Ranch, the Wellfield 11 header houses performed as expected. As previously reported, three new header houses in Wellfield 11 began production late in the third fiscal quarter.

Four additional header houses were constructed and tested as of the end of the fourth fiscal quarter, bringing the total to five that were awaiting regulatory approval for startup at such time. Just yesterday afternoon, we received final approval for four of these. Our team expects to start production at these header houses in the coming weeks. At Ludeman, our next mine feeding Irigaray, wells for the first well field are being installed and tested for mechanical integrity. Engineering for the satellite ion exchange plant is advancing. We have ordered long lead time equipment, completed the plant pad engineering, and selected our construction contractor. The power line route is set, with surveys expected to be completed in the first quarter of fiscal 2027.