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 [Music] I'm Charlotte McLoud with investing news.com and here today with me is John Cash CEO of UR energy thank you so much for joining me today oh thank you it's good to talk again really good to have you here and we spoke I believe about 6 months ago a lot has happened since then in the iranium market and for your energy of course I think we'll start with the market and one of the things we were going over last time is you told us there were a lot of catalyst building in uranium and prices looked set to

increase definitely we've seen that and there's a lot of elements that play there but for you what do you think caused the price increase that we've seen yeah no certainly since the last time we spoke the price has come up dramatically seems like maybe it's plateaued a little bit here the last few days but Spot Price is Right Around 69 $70 a pound longterm price depending on what service you look at in the uh low to mid-60s so uh it's in a great place right now certainly our project is in

the money but I think what really uh kind of through kerosene on the fire you we have been talking a long time about geopolitics the risk to uranium Supply and I think the coup in ner really opened up everyone's eyes and said yeah we knew the risk was there uh we weren't quite expecting this particular scenario uh but you combine that with what's going on with Russia issues with getting material out of Kazakhstan and I think that was really just kind of the issue that everyone said okay we acques the

price does need to go higher uh to recognize the risk and even though nir only represents maybe four or five% of Global Production it's a critical four or five% so I think that's really was the impetus to really start moving uh the price of uranium up here a few weeks ago right and we've seen it move quite quickly which is a change from what's usually happening in the Iranian market did you expect such a quick increase and do you think that's sustainable you no I I didn't I I really

believe that the uranium price was going to move higher but I figured it was going to you know move up at a pace that would beat inflation by a few dollars a year uh but you know with politics and that Supply risk you never know what could impact things and that can really cause a rapid increase in the market as we've seen and so we'll continue to watch the geopolitics globally and that could have another dramatic impact on pric right and you know when it comes to prices I think a lot of investors right

now are really curious they're asking questions about how high prices could go but maybe maybe a better question to ask is what a long-term sustainable price looks like so curious to get your thoughts on on those couple of things you know that's a really good question and uh you know there are a lot of companies that want to start production up and try to fill that gap between supply and demand but when you take a look at those companies and projects and by my count there are maybe 19 projects

that the owners have said they would like to move toward production uh but mining uranium is a tough business and I suspect probably half of those projects won't be brought into production in the next few years and even the other half that are brought into production in the next few years probably most of them are two three four years out and uh even assuming they get up to 100% production it doesn't backfill that Supply Gap that that we've seen develop over the last few years so I think there's still a lot

of room for the price to move the price needs to move with respect to inflation alone let alone with the regard to supply demand issues so you know when we look at where could the price go I really think the long-term price needs to be uh in the 70s to 80s to sustain a production level uh with tier one and tier 2 assets that are necessary to to back bill that demand so I think that's where we're headed in in the future and I think that's where we have to stay to to sustain production at where it needs

to be okay and you know speaking about production so a big milestone for your energy I believe this past May was lost creep going into commercial production so we want to make sure to talk about that and what I was wondering is if you could give an update on the company's current sales contracts yeah sure so we made the decision earlier this year to rrap up production at our Lost Creek property uh based on the contract book we were able to sign up some contracts and we now have three really good solid

long-term contracts in place they are base price escalated uh the contract look starts this year so we've already been making deliveries into that first first contract and have some Revenue there from that but things really kick off next year where the contracts go up to £600,000 next year and then 700,000 the year after so all in the three contracts we have right now the total uh quantity is 3.75 million pounds over a six-year period and that should give us a revenue of around $220 million

on that contract book alone now it's interesting that that contract book is really nice it's real solid but it only represents about 25% of our licensed capacity so 3/4 of our licensed capacity we've not contracted out yet and as the price moves higher we look to layer in more contracts and we're looking to get more Market exposure with a solid floor to protect the company and right now it's a sellers market and we believe we're going to have some good success continuing to fill out that book over

the uh coming months right that's exactly what I was going to ask is putting the existing contracts into context compared to capacities so when you talk about that 25% is that for Lost Creek or is that also including Shirley Basin yeah that includes Shirley Basin so Lost Creek the mine there it has a license capacity of 1.2 million pounds per year and then at the Shirley Basin the capacity there is an additional 1 million pounds per year so Shirley Bas and we have not built it out yet but we have all the life

licenses and permits we need and we're really waiting on the market a little more and Contracting we'd like to layer in a few more contracts justify building out Shirley Basin and when we make that decision we're estimating it will take about two years to build it out and get initial production commercial production levels from that facility that seems like a long time but what we're seeing is supply chain matters uh specifically with electrical equipment so we think it's going to take a year to maybe as

much as 18 months to get that equipment in place and then once we have it it'll only take about six months to build out that project and get it into production it's only a satellite facility the capital cost is relatively small only about $35 million uh so we're excited to jump into that we're just waiting to layer in some more contracts and as I mentioned earlier we think that's going to happen I know that's a forward-looking statement uh but we're very optimistic with the number of rfps

that have been coming out and we're going to have success going forward well and I'm glad you mentioned the the timeline there because it does illustrate that this can't happen overnight so that that is good to go into so talking a little bit more about Contracting you mentioned this is a sellers market so I was going to ask if you're starting to see any urgency among buyers and if you're approaching Contracting in a different way at all in this environment yeah absolutely uh you know

in September uh the W conference was in London a lot of people at attended that and that seemed to kick off another cycle of buying from the utilities since then we've received a number of rfbs and responded to a number of rfps uh from utilities around the world and we're expecting numerous more rfps uh between now and the end of the year uh we also have another Nei meeting coming up in Charlotte here in a couple of weeks and uh we think that that might be an opportunity for the utilities to to

gather a little uh information that they need and once they have that and discuss uh operations with mining companies we suspect that that'll put them back into the market and they'll be looking for more pounds so definitely has turned into a time with a lot of opportunity and where the price is headed and the lack of supply and it's very clear there's a lack of Supply uh yeah it really is a seller's market and we've been able to negotiate different terms than we've seen in the past so yeah it's

a good time to be working with the utilities and layering in contracts right and the other angle that I wanted to touch on when it comes to Contracting is are buyers willing to pay a premium right now for material from safer jurisdictions such as the us or are we heading into a scenario where really they will pay whatever amount for from anywhere yeah so no I think we're still seeing that premium for North American or safe jurisdictions um certainly our first three cont contracts when we signed

those they were considerably higher than the published price uh for the long-term price so we that made us very happy of course to be able to get that premium so going forward uh I think we're going to continue to see that premium uh that premium may fall off though as the price gets higher and higher as there's a greater and greater shortage going forward because the utilities are going to say hey we'll take those pounds from wherever we can get them uh but we'll see how that plays out okay you answered

exactly what I was getting at there so thank you for that so the other thing that I wanted to touch on when we're looking at l Creek going into commercial production so in that report you mentioned that there were challenges surrounding recruiting personnel and contractors I wondered if you could say more about that I was wondering if it's related to a skills shortage in the industry or or any other points you would add there yeah unfortunately this seems like a problem all over the world

we're hearing in Canada certainly a lot of uh companies here in the US uh even in Europe that finding that skilled labor and just hourly labor unskilled labor is quite challenging so it's not unique to Wyoming our unemployment rate here is right around 3% uh so we're competing with oil and gas and other mining companies here fortunately we've hired our staff uh we're fully staffed now uh we're still growing our contractor base and we've got little ways to go there but it was a struggle

and uh maintaining the staff now is uh one of our biggest challenges uh you know keeping people happy keeping them here uh so that there's not job hopping we're trying to avoid that and so yeah it is a challenge everywhere we go but seems like it's in our rear view mirror now and but we'll have to stay on top of it fingers crossed all right so you know one thing I've heard you talk about in other interviews I don't think we went over this last time is the company's interest in m&a so I wondered if you

could go into that a little bit I'm not sure if there's very much you can say but I'm curious about the criteria you might be looking for in terms of making potential Acquisitions yeah no certainly glad to talk about that of course we can't talk about any specific discussions or negotiations with the counterparties but now we're looking to grow the company through m&a uh should comment on Lost Creek we have a lot of opportunity there to grow the resource through exploration but we already have

a 14-year mind life so bringing in another million pounds through exploration really doesn't help the npv very much so we're looking to grow the company through m&a uh the criteria it's got to be a quality property and it likely needs to be a uranium property we are a uranium mining company that's all we do uh we prefer it to be in situe and it has to be in a good jurisdiction so I think we're perceived in the market as a value play and we certainly want to maintain that perception and that

reality going forward we don't want to make acquisition of properties that we can't put into production in the near term uh because of low grade or jurisdictional problems or permitting issues anything like that so we're after quality assets and that's a hard slog we've been looking hard for about 18 months now and uh we'll continue to look we'll continue to talk to other companies and see where we can do something that's a creative but so far that has not borne any fruit but that

doesn't mean we give up we'll keep looking and if we expand that to the uranium Market as a whole do you think this is an environment where we would see m&a across across the sector because I always think about it as being quite a small Market with not a lot of players so yeah how do you see that no you your spot on it is a very very small marketplace with very few players certainly there are a lot of micro companies uh Juniors that are trying to jump into the space because it's so

exciting we get inbounds probably on a weekly basis of hey do you want to sell that property or do you want to sell us that property and we can utilize that to start a new company and and those discussions don't go very far because we really don't want paper of a a you know micro cap a junior we're looking to produce our projects not sell them and so yeah a lot of people are jumping into the space so I think from that regard you probably will see a lot of m&a uh from the tier three maybe into the tier

2 companies but probably not so much m&a between the tier one on uh that think those are well established companies and maybe a little bit in the tier two like I said but yeah we we'll see where the things go with the higher prices it definitely adds a lot of excitement brings a lot of new faces into the industry and a lot of opportunity for m&a like I say especially in the tier three very true and I think last last comment on activities at the company so during the time we spoke last you had

mentioned some R&D efforts that your energy is undertaking when it comes to lowering the comp's environmental footprint and production costs so I know you've been really busy with a lot of other angles but are there any updates that you would share there yeah perhaps one update uh we have the provisional patent now has been published for our well casing methodology so it is still provisional has not been approved but that is out there now and so we're happy that is moving its way through the

Government Review process as far as practical development R&D right now we have limited bandwidth uh so we're really focused on ramping up production at Lost Creek uh but as that moves along and we get deeper into that we get more pounds blowing through the plant we'll turn back to research and development and continue on with that well casing technology we're through phase one testing we need to move into phase two testing and we'll also pick back up on the water filtration uh methodologies

we're always looking to reduce Wastewater generation as you can imagine at a nuclear facility like ours it's a mine but still it is expensive and problematic to get rid of Wastewater so we're always looking to minimize the generation of Wastewater okay so that would be something to watch for now so going back to the beginning of this conversation we touched a little bit about what's going on in terms of supply and demand what's resulted in this recent price spike I wonder if there's anything else you

would highlight in terms of market dynamics at the moment there's there's a lot going on for investors to track so just key points that you're keeping an eye on at the moment yeah I mean for sure the the supply itself is not growing very quickly I mean for example camoo announced that they're going to be a little short on their production from two of their big mines uh I think that really highlights the challenges of uranium mining that's a tier one company and a tier one jurisdiction with some of

the best mines in the world and they have struggles and uh I think we're seeing that across the industry is it takes a while for that production to come up and meet that demand so we're going to be watching that Supply going forward can it really respond to Market demands and I think it's going to be slow in responding so I think that Gap that's there now is going to persist for at least a couple of years probably three years before we see that begin to close so keeping a close eye on that

definitely keeping a close eye on the US government and that relationship with Russia there is a legislation right now uh that is being considered uh that would cut off that Russian Supply if that happens I think we can see a little bit of a price bump from that and maybe more importantly than that is Kazakhstan because they're a direct competitor uh as a uranium minor and so we're watching the shipping issues coming out of Kazakhstan uh they're running into Insurance problems shipping product out

and going through Russia they've looked for alternate routes that those are not ideal I think they're functional but they're not ideal and they add cost so we're watching all of those things watching what happens in ner uh and around the world so yeah a lot to keep an eye on right now uh geopolitics production uh we're watching the ramp up of nuclear power that's really exciting so many reactors are being built right now and there's such an explosion of interest in small modular reactors on

top of that that could really add additional demand maybe not now but maybe five years out six seven years out uh that could be tremendous additional demand and so there's so much going on in the space right now I've been doing this for nearly 30 years by far this is the most exciting time that I've seen in my career yeah you know usually when I ask that question it's not one or two things it's five to 10 different things that we all need to be keeping an eye on so just to wrap it up I want to bring it back to

the investor angle so a lot of investors have been waiting for movement for quite a long time you mentioned this is a really exciting time so any any thoughts or advice for investors who want to navigate the market moving forward yeah sure you know I believe the Market's going to continue to improve over time I expect tremendous volatility based on news uh there's certainly a tug-of-war on the price right now seems like it's plateaued but I think it's got considerable more room to run so if you

want to jump into this space be patient uh you're going to have to be have nerves of Steel to tolerate some of the volatility uh but yeah there's some great players out there including Ur energy uh to invest in and we invite you to check us out and become a shareholder very good well thank you so much for sitting down today to learn about the market the company really good information thank you for that well thank you Charlotte of course and once again I'm Charlotte McLoud with investing news.com and this is John Cash

with you energy thank you for watching if you like this video make sure you subscribe to our Channel we'd also love to hear your thoughts so leave us a comment below we'll see you next [Music] time