Ur-Energy (URG) Q2 2024 earnings summary

Executive summary

• Q2 2024 production increased 64% sequentially to 64,170 lbs at Lost Creek, with two shipments totaling 70,390 lbs and 75,000 lbs U3O8 sold at $61.65/lb; ending inventory was 74,625 lbs as of June 30.

• Cash position strengthened to $61.3 million at June 30, 2024, up $1.6 million from year-end 2023, and further boosted to $121.3 million after a $69 million equity raise in July/August.

• Lost Creek 2024 production guidance is at the lower end of 550,000–650,000 lbs, with 109,000 lbs produced in H1 and a ramp-up required in H2.

• Shirley Basin construction is on track, with all 120 monitor wells drilled, infrastructure upgrades underway, and major construction to begin in 2025; initial production expected in early 2026.

• Multi-year sales contracts total 5.7 million pounds through 2030, positioning the company to meet growing demand from leading nuclear utilities.

Financial highlights

• Q2 2024 sales were $4.65 million, with gross profit of $1.33–$1.5 million and a gross margin of 32–32.4%.

• Average cost per pound sold in H1 2024 was $41.69, with gross profit per pound at $19.96.

• Cash cost per pound drummed fell from $69 in Q1 to $48 in Q2, with a year-to-date average of $56 per pound.

• Operating costs for H1 2024 totaled $26–$27.9 million, mainly due to Lost Creek development and higher labor costs.

• 2024 sales projected at 570,000 lbs, with $33.1 million in revenue at an average price of $58–$61.65/lb.

Outlook and guidance

• 2024 production expected at the lower end of guidance; 2025 deliveries projected at 730,000 lbs under term contracts.

• Shirley Basin construction to accelerate in 2025, with initial production in early 2026.

• No additional equity raises or debt issuance anticipated unless for accretive M&A opportunities.

• Focus on increasing market-related contract exposure with floors and ceilings.

• Anticipates uranium market strengthening post-WNA meeting in September.