Ur-Energy: Micro-Cap Uranium Leverage

Ur-Energy uses in-situ recovery (ISR) mining — the lowest-cost uranium extraction method. Instead of traditional open-pit or underground mining, ISR pumps oxygenated water through the ore body to dissolve uranium, then extracts it at the surface. Key advantages: (1) Lower capex ($30-40M per facility vs. $500M+ for conventional mines). (2) Lower operating costs ($25-35/lb vs. $40-50/lb for conventional). (3) Smaller environmental footprint — no tailings, minimal surface disruption. (4) Faster permitting in Wyoming's mining-friendly regulatory environment. Lost Creek currently produces ~600K lbs U3O8/year with capacity for 1M lbs. Revenue model: mix of long-term contracts (floor price protection) and spot sales (upside capture).

TTM Revenue: $48M. Production cost: ~$28/lb (all-in sustaining). Average realized price: ~$72/lb (blended contract + spot). Gross margin: ~61%. Operating income: $14M. Cash: $32M, minimal debt. Capex: $8M/year (maintenance). Shirley Basin development capex: ~$35M over 2 years (funded from cash flow). Key sensitivity: every $10/lb move in uranium price adds ~$6M to annual EBITDA. At $100/lb spot (consensus target for 2027), URG's EBITDA roughly doubles.

US uranium producers include Uranium Energy Corp (UEC, $2.5B market cap), Energy Fuels (UUUU, $1.8B), and enCore Energy (EU, $600M). URG is the smallest pure-play ISR producer — which means it has the most operating leverage to uranium prices. UEC is larger and more diversified (Texas + Wyoming operations). Energy Fuels has rare earth optionality. enCore is still ramping production. URG's advantage: it's already producing at low cost with expansion permitted. The disadvantage: single-asset concentration at Lost Creek (until Shirley Basin comes online).

Near-term catalysts: (1) Uranium price breakout above $100/lb — driven by utility restocking and supply deficits (Kazatomprom production cuts, Niger political instability). (2) Shirley Basin construction start in H2 2026 — de-risks the growth story. (3) New long-term contracts at higher prices — URG's existing contracts were signed at $55-60/lb; new contracts would be $80-90/lb. (4) US nuclear energy policy tailwinds — bipartisan support for SMRs and existing fleet extensions. (5) Potential M&A target — larger producers may look to acquire permitted ISR capacity.

• Uranium price volatility — a drop below $60/lb would significantly compress margins and delay Shirley Basin
• Single-asset risk — Lost Creek is the only producing property; any operational disruption halts all revenue
• Permitting risk on Shirley Basin — while largely permitted, final approvals could face delays
• Dilution risk — if uranium prices drop, URG may need to raise equity to fund Shirley Basin development
• Geopolitical risk — changes in Russian uranium import policies could flood the US market with cheap supply