[Music] thank you I'm Charlotte McLeod with the investing News Network and here today with me is John Cash CEO of UR energy just a reminder before we get started that if you enjoy this interview make sure you subscribe to our Channel John thank you so much for joining me today it's great to see you uh hi Charlotte it's nice to meet you online and looking forward to our conversation I think it'll be a fun one our audience really enjoys hearing about the uranium space and there's definitely a lot to


talk about since it is our first time talking I thought the place I would start is to just ask you broadly where do you see the uranium cycle being at this moment you know right now uh we are facing a pretty significant supply of shortage uh mine production is at a low point right now coming out of covet coming out of the impact from Fukushima and also we've been feeling the impact of a lot of state-owned Enterprises uh kind of flooding the market and so that really drove down prices for a long time and


really shut down a lot of production globally especially in the Western World the U.S Canada Australia even some of the African mines so uh we're starting to come out of that but there's a significant Supply uh shortfall compared to demand from reactors and that demand from reactors is really scheduled to grow uh considerably larger over the next few years as the world continues to move toward nuclear power whenever I speak to people in the uranium sector it becomes clear very quickly that there are a lot of positive


catalysts coming down the line what do you what would you identify as the top catalysts in your mind oh I think uh you know there are a couple of things that come to mind very quickly uh but I'll focus on green energy uh the world really has come to the recognition that nuclear power is carbon free at the same time they're coming to the recognition that while Renewables have uh certainly great things about them they also have significant downfalls uh namely it can't be stored very effectively so in


circumstances where you want reliable base load carbon free energy really you've got two things you can go to you can go to nuclear or you can go to hydro and most of the dams that can be installed on Rivers have been installed already so that leaves you with nuclear power to really fill that green energy of Base load uh energy so that's where the world's going and that's why the world is really building out reactors in China Finland South Korea even here in the U.S in countless other countries


around the world okay I think that's a great point and another Catalyst I want to bring up is utilities Contracting which you started to mention as well so this is really important but it's a notoriously opaque process that people may not be able to know much about I wanted to ask what light you could shed on that considering that your energy is actually signing contracts with these entities no you're spot on it is a very opaque market and the utilities like it that way I think it makes them feel like they can work


with suppliers and get the best deal without the interference from the outside uh but right now it looks like there are really two markets that are developing there is a global market uh in a global price that's published and then there's also a western price and because we are a western producer in a very safe jurisdiction here in Wyoming USA we get a premium for our pounds so what we've seen in our Contracting is we're not getting the spot price we're not even getting the long-term price


we're getting a price that's above and beyond that because utilities and nuclear companies around the world they want that security of Supply there's so much uncertainty in the world right now that they're willing to pay for that certainty and we're able to provide that so yeah it's opaque but there are definitely two markets that have developed and we're glad to be on the upper end of that and enjoy really hot really high price contracts for production from Lost Creek


certainly and speaking about contracts that your energy has signed I believe you also have one with the US government for the Iranian Reserve I hope that we could talk a little bit about that and the importance of that Reserve in establishing the US in terms of supply chain security yeah so a number of years ago uh president Trump signed into law the uranium Reserve that was back in 2020 and the intent of that was to help create a bit of a backstop for U.S utilities uh just in case there is a global uh disruption of supply and keep


in mind this was before Russia invaded Ukraine so but this was kind of predicting that something like that could happen and ultimately could impact U.S utilities and the ability to keep a good supply of electricity to their customers so anyway the uh that act that bill it allocated 75 million dollars and the department of energy was charged with uh going out and buying pounds of your uranium and also buying conversion services from U.S providers and so we were successful in bidding into that program we sold a hundred thousand


pounds to the Department of energy earlier this year uh we got a price of 64.47 cents a pound which is an outstanding price we were very happy to get that we've since been paid for that uh unfortunately at this time that program it looks like it was a one-time purchase there's no more funding left in that program going forward however Congress is considering I don't know how seriously but there is discussion on Capitol Hill about expanding that program for additional years so we're


waiting to hear on that and we'll see if that comes to pass but our company although we participated in that initial phase of the program uh we don't rely on the U.S government that's not our business plan our business plan is to sell production to Global nuclear fuel companies utilities and so that's really our Focus we think it's a little bit dangerous to try to rely on government sales they're too sporadic not reliable so we're going to take the more commercial approach


that does make complete sense and another element that you started to talk about that I want to ask you about is the Russia Ukraine war so this is definitely drawing supply chain security into focused around the world not just in the US and it's really made people I think think about how much we rely on Russia for Uranium not just actual uranium but the processing side of it as well so can you talk a little bit about that and if we may start to see the US for example start to step away from


there because I don't believe we've quite seen that at this point yeah absolutely and one of your earlier questions you said you asked about what are the top things that really are driving the market and I talked about green energy but I could have just as easily said geopolitics especially Russia yeah Russia is a major minor not a refiner but a minor or a refiner of uranium so they do a lot of conversion and enrichment there a major Global supplier I've seen a number of different uh statistics on how much they provide


but roughly 40 percent of conversion and 40 percent of come out of you think okay no big deal if that Supply gets cut off the Western world would simply step in and backfill that and you know we'd be back up and running in no time we could rely on inventories in the interim but that's not the case at all the Western World simply does not have the physical infrastructure to replace a supply disruption if that were to happen so I think it would be a significant scramble to try to replace that infrastructure the enrichers maybe


have a bit of an upper hand on that because they could begin to overfeed uh in their process that would actually help us out because that means they would require more feedstock or more yellow cake to go into the the process so we would enjoy that um but the conversion Services I mean it's it's very limited here in the U.S currently today there are no converters up and running Now converdine is working on restarting their facility I think they intend to start very quickly uh but that is the only physical infrastructure


on the ground for conversion in the U.S and then in enrichment now your enco does have one plant down in New Mexico but that's the extent of enrichment in the U.S so uh if we wanted to build out more capacity in North America uh or in Europe it would take time and a lot of money it's doable it's been done before but it's not something that we can just flip the switch and have it in six months or a year and we're talking probably about several years and potentially billions of


dollars to build out that infrastructure so that puts the U.S utilities and European Utilities in a very difficult position no one really wants to do business with Russia at this point but we don't have good Alternatives right now uh Congress the U.S Congress is looking at cutting off that Supply they're talking about having a waiver process as part of that so if a utility can't get supplied somewhere else they could still go back to Russia uh kind of as a pressure relief valve if you will I


I don't know if that even works though I I don't think Vladimir Putin's gonna say on one hand okay you cut us off but oh you're desperate for pounds now are desperate for enrichment okay I'll help you out I don't think he's that nice of a guy so I don't know if that thought process is really going to work but anyway Congress is taking a hard look at it the U.S is trying to take some steps to move away from Russian Supply ultimately that can help us out as uranium miners I mean we're looking


forward to that happening uh morally we believe it's the right thing to do okay I think we should talk a little bit more about the company's plans right now to ramp up production because I'm pretty curious about that process and what you would want investors to know as you're going through it yeah so we've got uh two Flagship properties Lost Creek is the first one it's been in production now for nine years and that's the one we're looking at ramping up production because we've


been able to layer in some very good high-priced contracts to justify that startup but I would like to convey that uh we've only got 600 000 pounds under contract that's only about 25 percent of my plant capacity there I'm sure I had Lost Creek so we've got a lot more room there to grow and layer in additional contracts beyond that we can start Contracting at Shirley Basin our next property it's fully permitted but we haven't constructed it yet but that can be done very quickly at a very low


Capital cost so we're in a good position there to ramp up we've announced that we're drilling we're constructing and within a matter of weeks now we intend to bring in additional flow into our processing plant and begin to ramp up that production this year we'll produce about 200 000 pounds at Lost Creek it's not that much but that's what our contract book calls for next year we ramp up to six hundred thousand pounds and we'll stay at that level to fill the contract book for the next


five years there is an option to extend one of the contracts uh for an additional year beyond that so we've got in a really good base layer of revenues from those contracts that puts us in a really good spot and at the same time we've got a lot of room to grow that contract book as prices go higher and that's what we're looking for now layer in additional higher priced contracts I know price is always a tricky one but you know in uranium I think we do all agree the price is going to go higher


what would your outlook be for 2023 or perhaps even beyond that longer term yeah you know it's really hard to predict I mean you've got two Dynamics going here you've got the basic uh fundamental Supply demand issues beyond that you've got the geopolitics we've talked about both of those uh you know when you look at just Supply demand fundamentals that alone I think you're going to see several dollars a year uh in the spot Market maybe uh two three four dollars a year increase year over


year going forward until Mine Supply is able to catch up and that's going to take a number of years to get there long-term pricing similar story I think you see two three four dollars a year increase for a few years while the miners uh try to catch up but that's ignoring the geopolitics if you throw the geopolitics in there in the worst case happens um and let's say those sanctions on Russia are enacted somehow that encapsulates uh Kazakhstan Uzbekistan Russia exerts its influence there then I


think you could see 2 20 30 40 dollars a pound increase within weeks that's impossible to predict um who knows what Vladimir Putin's going to do I'm not sure he knows what he's going to do tomorrow so but that that possibility is out there and people should be aware of it I you know I watched the news religiously uh watching what's happening happening in Ukraine watching what's happening in the U.S Congress in response to that um and just trying to get a sense of what's going to happen but but those are


the Dynamics at play but uh all systems right now look like go uh looks like the price is going to be moving higher I think consistently that's what the producers are predicting I think pretty reliably that's what the utilities are expecting as well and certainly if you look at some of the major trade press as well like ux Consulting they're looking at fairly significantly higher pricing going forward as well so I won't say it's unanimous but it's a pretty strong indication that pricing is moving higher


I think you're definitely right about that and I know investors are really hoping to see that as well there's a lot of people I get the sense that have been in uranium for quite a long time who may be feeling at this point a little impatient although we have actually seen over the last couple of years quite a bit of price growth what would you say to those people who want to see it move a little bit quicker yeah I mean obviously the the markets uh beyond our control I wish I could control it but I


can't but uh would just encourage those investors to hang in there uh when you're looking for companies to invest in in the uranium space look for those tried and true proven producers and uh I'd like to say you are energy we are one of those companies we've been producing for a long time we've got very low cost C1 cash cost around 16 a pound all in mine side around 33 dollars a pound we're seeing a little bit of inflationary pressure on those numbers but nothing too bad uh but we believe we


can compete with just about anybody in the world especially in the Western World so would just encourage those investors stick with us a little longer make sure you invest in good solid companies and I believe we take those boxes you know when it comes to uranium investors I do find that they tend to be quite well informed but I did want to ask if there are any misconceptions about uranium that you would want to dispel for people things like that that you have on your mind yeah I think there is some confusion


maybe especially with some retail investors who are not uh practiced and haven't been in the uranium space for very long that there really are two markets uh when it comes to uh buying and selling uranium uh one would be the spot price and everybody talks about the spot price but really spot price uh only represents about maybe 15 of total sales maybe 20 so it's a relatively small percentage of overall sales and it really doesn't represent the bigger Market uh but the long-term Contracting


that takes up 80 85 percent of the market that's where we play as a minor that's where a lot of the miners play is in that long-term Contracting certainly that's where a lot of the utilities play so uh for anyone watching the video today that's looking at getting in the space be aware there are two markets there is a spot price and a long-term price and the two markets have very different uses and very different sizes okay I think that's a really helpful point for people to remember that's all


I have for you today but before we wrap up I want to ask if there are any final thoughts you had on the market or points that you would leave people with about the company yeah you bet one other item I just would bring up very quickly is we are engaged in some research and development and would encourage the viewers to keep an eye on that our research and development really focuses on reducing our environmental footprint we're very serious about that but at the same time lowering our cost of


production so we have two ongoing projects right now that are focused on that and uh we're ramping up so we've had to avert our attention away from that to ramp up for a little while but as we get it through wrap up we'll take our attention back to research and development and we've got some great projects there that we hope to talk about some more in the coming weeks and months great that's great to hear well thank you so much for coming on to join me today to talk about uranium and about


your energy it was great to get your perspective on the market all right thank you Charlotte it's good to catch up with you of course and once again I'm Charlotte McLeod with the investing use Network and this is John trunch with your energy foreign