enCore Energy: Dewey Burdock Advancing Quickly Through the Permitting Stage

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enCore Energy (EU) announced over the last few days that the Dewey Burdock Project is advancing quickly in the permitting process given recent milestone authorizations and positive decisions granted by both the Nuclear Regulatory Commission (NRC) and from the Bureau of Land Management (BLM).  

POSITIVE PROGRESS ON THE BLM AND NRC FRONTS

As announced on June 22, the NRC issued an Environmental Assessment which was followed with a finding of No Significant Impact in support of the Dewey Burdock Uranium Project’s 20-year Source Materials License, currently in Timely Renewal status. With the Finding of No Significant Impact, the NRC has stated that it will renew the Dewey Burdock license if the NRC concludes that enCore, through its wholly-owned subsidiary Powertech USA, Inc., has demonstrated it will continue to meet NRC safety requirements for construction and operation of an ISR facility. This announcement was preceded by a June 18 BLM decision which authorized the Dewey Burdock Project to commence construction of infrastructure on portions of the project’s BLM-managed public lands within the larger Dewey Burdock Project. All that remains from the NRC at this point is the safety evaluation review to renew the NRC Source Materials License.

DEWEY BURDOCK: THE NEXT LEG OF ISR URANIUM PRODUCTION GROWTH

Recall that this past September, the Project was approved for inclusion in the Fast-41 Program by the U.S. Federal Permitting Improvement Steering Council. Under the Executive Order, the Permitting Council identifies priority infrastructure and critical mineral projects to receive accelerated permitting review. Dewey Burdock's inclusion into the Fast-41 Program represented the first South Dakota ISR uranium Project named to receive accelerated permitting review. The Project previously received its Source and Byproduct Materials License SUA-1600 on April 8, 2014, from the NRC.

According to a recent S-K 1300 Technical Report (effective date October 8, 2024), given 17.1M lbs of Measured & Indicated resource (along with 712,624M lbs Inferred), Dewey Burdock not only represents one of the larger domestic US projects but it also represents one of the very few projects that is both ISR amenable and currently advancing rapidly with an eye to construction within ~18 months.

Located approximately 75 miles from Cameco's (CCJ, CCO-TSX) Crowe Butte ISR facility, recall that the 2024 Dewey Burdock Technical Report estimated a 26 year operation capable of producing an average of 750,000 lbs U3O8 per year, over LOM. Production is seen as from a Central Processing Plant (CPP) with both ion exchange recovery trains and yellowcake processing facilities. Using an average sales price of $86.34 per lb and an estimated initial capex of $264.2M, an after-tax Project NPV8% was estimated at $133.6M with an after-tax IRR of 33%. Our company-wide production estimates are below:

VALUATION & CONCLUSION

The recently announced regulatory approvals represent the latest positive steps along the journey to get the Dewey Burdock Project fully approved and construction ready. The NRC safety evaluation review is the final step in the process to renew the NRC Source Materials License. enCore has provided all information and material under the existing NRC license for consideration of this final step. Management previously stated that it expects construction activities to commence within the next ~18 months. enCore Energy maintains plenty in treasury with total liquidity of ~$110M at quarter-end and uranium inventory amounting to nearly 154,000 lbs. Anchored by a $100/lb LT uranium price and a target NAV multiple of 1.15x NAV8%, our derived 12-month price objective is maintained at $3.30 per share (rounded). This equates to upside of +116% from the most recent close (June 22). Shares of enCore Energy currently trade at a 0.54x P/NAV multiple.