Ur-Energy: Operating Fundamentals Continue to Improve at Lost Creek

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On July 15, Ur-Energy (URG) provided an operational update for both Lost Creek and Shirley Basin. During the Q2/2025 quarter, the first U3O8 sales of 2025 were booked while a multi-year high of 112,033 lbs were dried and drummed. Given the addition of two more header houses in Mine Unit 2 (with more on the way over the course of the summer) along with flow rates routinely exceeding 3,400 gpm, production is expected to increase further in the months ahead. Due to the continued positive operational improvements at Lost Creek and coupled with the company's strong internal fundamentals (LT contracts, strong treasury and inventory) we increase our NAV8% objective going from 1.0x to 1.15x. Maintaining our $80 per lb LT uranium price, our 12-month price objective increases from $1.19 to $1.35 per share (rounded). Noting the recent +22% share price appreciation over the last week, our updated price objective equates to upside of 5% from the close.

The Q2/2025 period was a particularly strong quarter at Lost Creek as captured U3O8 amounted to 128,970 lbs, representing a multi-year high for the quarter. This latest production figure brought the 1H/2025 total to 203,449 lbs U3O8 produced. Just as notably, the quarter saw the first sales for the year as 165,000 lbs were sold at an average price of $63.20 per lb, thus generating revenues of $10.4M.

LOST CREEK OPERATIONS CONTINUE TO STABILIZE AND RAMP HIGHER

The strong quarterly production figures can largely be attributed to the addition of two header houses and a continued focus on maintenance and operational efficiency (upgrades to reverse osmosis systems and plant control systems along with the installation of new membranes for better wastewater treatment). That said, the wellfield flow rates routinely reached over 3,400 gpm by the end of June. This is a marked increase from the 2,700+ gpm achieved as per the Q1/2025 operational update. Additionally, the head grade increased during April and held steady at over 70 mg/l U3O8 during the months of May and June. Management expects production to increase further in the months ahead as additional header houses come online and plant capture rates improve. Together, these production factors yielded 203,449 lbs captured in 1H/2025, with 74,479 lbs attributable to Q1/2025 and 128,970 attributable to Q2/2025.

At quarter-end, finished inventory at the conversion facility stood at 315,607 lbs U3O8 while the in-process and drummed inventory at Lost Creek totaled approximately 55,000 lbs U3O8.

CONSTRUCTION CONTINUES AT SHIRLEY BASIN; PRODUCTION BY EARLY 2026

Construction at the fully permitted Shirley Basin Project continues on schedule with initial targeted production expected in early 2026. Key construction activities included:

• The compacted earthen pad for the satellite processing building and the ordering of major components is complete, including the metal building, ion exchange columns, ion exchange resin, and water treatment systems.

• The installation of production and injection wells in Mine Unit 1 continues, with initial drilling, casing and completion in the first three header houses of the unit.

• Work has begun to upgrade the electrical substation and other site-wide utilities.

• The installation of the modular main office complex, totaling approximately 10,000 square feet, is substantially complete.

• The installation of two evaporation ponds is approximately 75% complete.

Lastly, the construction of the foundation for the processing building is expected to commence later this month. Our production estimates for Lost Creek and Shirley Basin are below. With increasing confidence we maintain our FY/2025 Lost Creek production estimate of 513,000 lbs U3O8.

CONCLUSION & VALUATION

Ur-Energy maintains a strong contract book encompassing 5.84M lbs contracted for delivery between 2025-2033 (split between seven global nuclear purchasers). The contracts include pricing escalators and some market based pricing features. A total of 440,000 lbs are contracted for FY/2025. The company maintains an unrestricted cash position of $74.8M at Q1/2024 end. We estimate that the current cash and equivalent position, along with current uranium inventory (370,000 lbs) likely represents nearly 20% of current market capitalization. 

Given the continued positive operational improvements at Lost Creek and coupled with the company's strong internal fundamentals (LT contracts, strong treasury and inventory) we increase our NAV8% objective going from 1.0x to 1.15x. Maintaining our $80 per lb LT uranium price, our 12-month price objective increases from $1.19 to $1.35 per share (rounded). Noting the recent +22% share price appreciation over the last week, our updated price objective equates to upside of 5% from the close.