The Month in U Inventory: Both Spot and Term Move Higher in August

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Spot uranium made significant gains during the month of August, adding +4% and settling near the highs of the month at $89.75 per lb (Numerco) given an August range between $86.20-$90.75 per lb. Also of note during the month was that the term price added $2 to reach $96 per lb, representing an increase of nearly +11% YTD. Though term pricing has been supported by stronger year on year 1H/2026 contracting (32.5M lbs vs 27.0M lbs) we note however that term volumes remain below the past 5-year average. That said, the Sprott Physical Uranium Trust (U-U, U.UN) did not add to inventory during the month as the figure remained just under the 81.7M lb U3O8 level. The current inventory figure represents a notable ~4.4x increase to the 18.3M lbs held nearly four years ago when the Trust was launched, post Uranium Participation Corp. acquisition. Yellowcake PLC (YCA) announced that on August 11, it took delivery of nearly 1.161M lbs U3O8 from Kazatomprom. The inventory is being held at the Orano storage facilities in France. The transaction was previously announced and is part of the 2026 uranium purchase Framework Agreement with Kazatomprom. At a purchase price of $86.15 per lb, the total consideration amounted to $100.0M. Domestically, as reported by the EIA, U.S. uranium production in Q2/2026 amounted to 1.087M lbs representing a 4.7% sequential increase from Q1/2026. A total of 867,422 lbs was sourced from White Mesa (Energy Fuels), followed by 129,444 lbs from Lost Creek (Ur-Energy) and 44,813 lbs from Alta Mesa (enCore Energy). The 1.087M lbs of domestic quarterly production represents a multi year high.

On the corporate front, Ur-Energy (URG) reported a record 140,873 lbs U3O8 drummed at Lost Creek in Q2. Flow rates continued to improve as a sand filtration system was installed and brought online last month. Sales for the quarter under contracted deliveries totaled 215,000 lbs of U3O8 as projected. This generated $14.4M in product sales revenue (average realized price of $66.85 per lb) while the cash cost per lbs sold remained low at $40.20 per lb, compared to the $37.51 reached Q1/2026. Just as importantly, Ur-Energy management stated that plant infrastructure and processes are in place at Shirley Basin to transport uranium-loaded resin to Lost Creek and launch full production operations only two and a half years after the build out decision. The first shipment is expected imminently. This is a quick ramp period given that initial extraction operations only began this past April. That said, while conducting only limited operations, the company succeeded in capturing 10,634 lbs of U3O8 at the Shirley Basin plant during the Q2/2026 period. Since the Shirley Basin ISR Project was initially acquired in 2013 (via the Pathfinder Mines acquisition), the announced ramp-up milestone marks Ur-Energy's second successful ISR mine brought online from early development. With a Measured & Indicated resource of 8.8M lbs U3O8, Shirley Basin's estimated LOM is 9 years (spread over three shallow mine units) while the plant has a capacity for 1.0M lbs per year.

It was a different Q2 for enCore Energy (EU) as uranium extraction was materially lower at 131,274 lbs in Q2/2026 compared to 317,613 lbs extracted in Q2/2025. The drop in extracted lbs prompted the spot purchase of 360,000 lbs which pushed up costs materially during the quarter: $75.54 per lb compared to a weighted average cost of $59.42 per lb in the same period 2025. Though the Alta Mesa Wellfield 3 Extension and the Upper Spring Creek wellfield supplying the Rosita CPP are ready for operation, the needed permits are still outstanding. Costs for the Wellfield Extension and for Upper Spring Creek have been fully expensed however permit receipt for each is only anticipated for Q4/2026. Note that Alta Mesa's Wellfield 7 is scheduled to end recovery operations later in Q3/2026 due to anticipated depletion as the end of its natural life approaches. Final permits for Wellfield 8 are anticipated by the end of Q1/2027.

Sprott Physical Uranium Trust (U.UN-T, U.U-T): 2-Yr Performance:  

Earlier in the year the Iran war and the the recent AI driven market downturn reversed earlier P/NAV premium valuations seen earlier in the year, to steep discounts. The Trust reached a -12.3% discount to end the month of July. Recall that the Trust was at par to NAV at the start of March (pre-war) and even reached a premium of +9% in late January. Though no inventory was added during the month, the current 81.697M lb inventory figure represents a notable 4.4x increase to the 18.3M lbs held ~four years ago when the Trust was launched, post Uranium Participation Corp. acquisition.

Valuation: Given current pricing and FX, SPUT's discount to NAV decreased from last months discount of -12.3% to the current -7.0% discount with the Trust now trading at a 0.93x P/NAVPU relative to its intrinsic value of $29.92. Note that following a slight valuation premium in September 2023, the valuation discount has largely been maintained, apart from a brief period this January. The current -7.0% discount ranks far from the -15.0% discount last seen in February 2023. Note that a premium of +9% was achieved before the sell-off at the onset of the Iran war. Given our LT $100/lb price objective for the spot and a constant CAD/USD exchange rate, our 0.95x NAVPU valuation of $32.00 (rounded) per unit is being maintained. For further context, the current -7.0% discount to NAVPU is relative to +26% premium in September 2021 and -18.1% discount from July 2022. YTD shares in U.UN have advanced by +3.7%

Yellow Cake PLC (YCA-L): 2-Yr Performance:

Valuation: Given the most recent spot U3O8 quote at $89.75 per lb (or £66.42 per lb), YCA is trading at 0.89x P/NAVPU, or at a -10.9% discount given the current 1.0x NAVPU intrinsic value of £656.42. Given our LT $100/lb price objective for the spot and a constant GBP/USD foreign exchange rate, our 0.80x NAVPU valuation of £710 (rounded) is maintained. As per YTD performance, shares of the Yellow Cake have declined by -1.2%. The corresponding sensitivities to FX and the spot price are below:

Recall that under the Kazatomprom Framework Agreement (KFA), Yellow Cake maintains the option to purchase up to $100M of U3O8 each year for a period of nine years, starting from the company's IPO in 2018. That said, it is our view that geo-politics will continue to weigh on Kazakh sourced uranium, and in general on all companies with exposure to Kazakhstan, (despite current transport routes which completely bypass Russia). Kazatomprom has maintained its FY/2026 production guidance of 28,250 tU (mid-point) however longer term production will be impacted given that commissioning for the TQZ acid plant is expected to commence much later - now seen sometime between Q3/2027 and Q1/2028.