enCore Energy: Permitting at Alta Mesa & Upper Spring Creek On-Track for Resumption of Growth in 2027
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enCore Energy (EU) provided an update on its permitting initiatives for three new production areas located in South Texas - namely Upper Spring Creek and Alta Mesa Production Area 8 (PAA-8) and the Alta Mesa Production Area 3 (PAA-3) extension. Now with an element of permitting certainty, we note that for much of this year, encore has been mired in permitting purgatory. The slower than expected permitting process has been what has plagued enCore's growth outlook, particularly given the disappointing production results as disclosed in Q2/2026 when 131,274 lbs U3O8 were extracted. With permitting on track and final authorizations expected between November to early January, all of the three new production areas are expected to contribute materially to production in 2027.
THE EXPECTED PERMITTIGN TIMELINE:
Specifically on the permitting front, the timeline is as follows:
Upper Spring Creek PAA-1 is in the final stage of permitting: the public comment period on the Final Draft Permit closed on October 19, 2026, and final TCEQ authorization is expected on or before November 13, 2026.
The Alta Mesa PAA-8 and PAA-3 extensions continue to work their way through TCEQ technical review. The wellfields remain on schedule with final permitting expected by the end of the year for the PAA-3 Extension and early in the new year for P-AA8.
Specifically for the PAA-3 extension and for PAA-8, given the legislative changes to the public notice and hearing procedures implemented on May 1, 2026, there will be no opportunity for a public hearing which could have otherwise delayed the process.
AS PRODUCTION STALLED, SHARES HAVE DECLINED MATERIALLY YTD
enCore shares have declined by nearly -70% YTD as production has stalled largely due to the permitting delays for the new production areas have impacted production estimates. The situation was most visible in Q2/2026 when uranium extraction totaled a mere 131,274 lbs compared to 317,613 lbs extracted in Q2/2025. In turn, the drop in extracted lbs prompted the need to purchase of 360,000 lbs which pushed costs up materially during the quarter: $75.54 per lb compared to a weighted average cost of $59.42 per lb in the same period 2025.
VALUATION & CONCLUSION
The permitting timeline for both Upper Spring Creek, Alta Mesa PAA-8 and the PAA-3 Extension has been critical given that the Alta Mesa Wellfield 3 Extension and the Upper Spring Creek wellfield supplying the Rosita CPP have been ready for operation for some time already. We note that production from these new areas are instrumental for enCore's production growth narrative to resume, particularly since Alta Mesa's Wellfield 7 is likely already depleted.
Additional guidance will be provided in the weeks ahead together with the release of the Q3/2026 results. That said, until the growth narrative resumes in 2027, we note that material workforce reductions as announced in July are expected to generate significant savings as of Q3/2026 and beyond. enCore Energy maintains plenty in treasury with total liquidity of ~$90M at quarter-end and uranium inventory amounting to over 203,000 lbs. Still anchored by a $100/lb LT uranium price, after factoring in corporate adjustments, we maintain our target NAV multiple of 1.10x NAV8%. We maintain our 12-month price objective of $2.00 per share (rounded). This equates to upside of +156% from the most recent close (October 27). Shares of enCore Energy currently trade at a 0.31x P/NAV multiple.
