enCore Energy: Production Ramp-Up Slows at Alta Mesa; Dewey Burdock Advancing

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On May 14 enCore Energy (EU) released its financial and operational results for the Q1/2026 period. Though net income of $0.03 per share represented a marked change from the $0.13 loss per share from Q1/2025, more telling were the operational results from Alta Mesa. Though light on detail from enCore Energy, disclosure from 30% JV partner Boss Energy (BOE-AU) painted a picture of disappointing quarterly production as 97,000 lbs of U3O8 was drummed, representing a decrease of 32% versus the previous 143,000 lbs U3O8 drummed in Q4/2025 (both production figures at 100%).

During the quarter, enCore made delivery of 270,000 lbs of U3O8 into sales contracts at an average price of $67.78 per lb. This represents a slight monetary increase relative to the 290,000 lbs delivered in Q1/2025, at an average price of $62.89 per lb. That said, during the quarter the weighted average cost of delivered U3O8 was $68.02 per lb compared to a weighted average cost of $62.97 per lb in the Q1/2025 period.

On the operational front, U3O8 extraction amounted to 90,000 lbs during the Q1/2026 period (extraction cost $46.43 per lb), representing an increase of approximately 22% from the 73,711 lbs extracted in Q1/2025 (extraction cost of $45.62 per lb). The sequential production figures were more disappointing seeing as 97,000 lbs were drummed this past quarter, compared to the 143,000 lbs (100% basis) drummed in Q4/2025. The decrease was attributed to the timing of permitting in Texas for administrative reasons. As such, this resulted in delays to new wellfields coming online. Specifically, Wellfield 7 is currently operating with additional modules coming onine in the quarter. Continued drilling and module development is planned to continue throughout the year. The Wellfield 3 extension development has continued with additional wells having been installed. Owing to the slower permitting timeline at Alta Mesa we've adjusted our FY/2026 production estimates slightly lower while largely maintaining our LT estimates.

DEWEY BURDOCK: THE NEXT LEG OF ISR URANIUM PRODUCTION GROWTH

At the Dewey Burdock Project located in South Dakota, permitting activities and development planning continue to progress. enCore continues to work with federal and state regulators to complete the necessary approvals for the project. Based on the current status of the permitting process and development planning, enCore expects construction activities to commence within the next 18 months, following completion of the remaining regulatory requirements. 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 represents 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%.

VALUATION & CONCLUSION

The company has plenty in treasury with total liquidity of ~$85M at quarter-end and uranium inventory amounting to nearly 154,000 lbs. Despite the disappointing development hiccups at Alta Mesa, we remain encouraged by the developments at Dewey Burdock which represents the next material value driver for the company. Still anchored by a $100/lb LT uranium price, we decrease our target NAV multiple, going from 1.20x to 1.15x NAV8%. As such, our derived 12-month price objective is reduced from $3.55 per share previously, to $3.30 currently (rounded). This equates to upside of +103% from the most recent close (May 14). Shares of enCore Energy currently trade at a 0.57x P/NAV multiple.