Q2 2023 Ur-Energy Inc Earnings Call
Greetings and welcome to U R Energy, Inc, second quarter earnings and company update conference call.
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Western and answer session will follow the formal presentation.
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Please note this conference is being recorded.
I'll now turn the conference over to your host MS finished off the route you may begin.
Thank you for joining us for our teleconference and webcast. This afternoon.
We are required to draw the attention of all of our participants to the legal disclaimers contained in the factory and slide presentation, which apply equally to our oral presentation today.
On slide two you will find legal disclaimers with regard to forward looking statements risk factors and projections as well as other cautionary notes to investors.
We ask that you read and consider these disclaimers carefully before investing in our shares.
As well risk factors inherent in forward looking statements and projections are set forth and discussed in the company's annual report on Form 10-K filed on March six 2023, with the U S Securities and exchange on Edgar and with the Securities regulatory authorities in Canada on SEDAR.
I would now like to introduce and turn the webcast presentation over to our chairman and CEO John cash.
Good afternoon, everyone and welcome to the U R Energy second quarter 2023 earnings call. It has been an exciting quarter for the company as we have successfully initiated ramp up in our second mine unit at lost Creek.
And as demand for nuclear fuel and global geopolitical uncertainty continue to support the uranium price.
Have revamped our corporate presentation for the purposes of this call to focus more on our finances and geopolitical risks.
I hope you find it informative and useful.
The photos here are the ion exchange portion of the lost Creek plant and the first shipment of yellow taken the fall of 2013, we expect to get back to shipping uranium this fall.
We encourage participants to review the disclaimer presented here and our filings so you're aware of the risks associated with investing in the uranium industry in uranium mining in general and our projects.
U R energy has two flagship properties that are our primary focus.
<unk> Creek is our first operating and set your mind, Andy is in South Central Wyoming.
Shirley Basin is our second planned and set your mind also in Wyoming that is fully licensed and construction ready.
Lost Creek has been in operation now for almost exactly 10 years and has produced approximately $2 7 million pounds of you 308 through 2022.
As previously announced we have been ramping up production again with commercial operations beginning in header house to dashboard in may of this year.
Ramp up continues to progress and we have now established good head grade and flow from the first house, we intend to bring header house to Dash five online. This fall followed by additional houses through the end of this year.
The resource at lost Creek is $11 9 million pounds of measured and indicated resource and $6 6 million pounds of inferred resource.
As many of you are aware lost Creek is a well deserved reputation for being a low cost producer and we believe as we work our way through ramp up to commercial production that we will return to low costs.
I will talk more about production costs later.
Lost Creek is a 14 year mine life with significant opportunity for exploration.
We are aware of numerous ROHL brands that have not yet been explored.
The lost Creek mine is licensed and constructed to produce at a rate of $1 2 million pounds per year, while the processing plant is licensed and constructed to produce two 2 million pounds per year.
The Delta between these two figures was intentional because we have always planned on expanding operations through additional mines or processing for competitors.
It is our intent to bring loaded resin from the Shirley Basin mine. Once it is constructed to process at lost Creek. So we don't need to build out a full processing plants.
This will provide us significant capital savings.
Our next plan project as Shirley Basin, which has all the licenses and permits for construction and operating in place. The Shirley Basin mine is licensed at 1 million pounds per year and the plant has licensed at 2 million pounds per year. However, as mentioned, we don't intend to build out a full plant instead, our intent is to <unk>.
Build out a satellite facility and ship the RASM to lost Creek for processing.
This will allow us to build out much more quickly and with significantly less capital.
The resource at Shirley Basin is $8 8 million pounds of measured and indicated resource at a grade of zero point to three 8%.
Given dance historic drilling there are no inferred pounds.
Unlike lost Creek, there is little opportunity for expansion within our existing footprint and Shirley basin, because the mineralized body has been completely and thoroughly drill we don't see this necessarily as a disadvantage. We view this as a cost savings because we won't need to expand bonds for exploration and little Bill any.
<unk> drilling is required.
This allows us to go straight into production in fact, we have already planned every mining pattern header House Road and power line for the property based on existing drilling data.
Interestingly, we believe Shirley basin was the first commercial scale in since your uranium mine in the world in 1963, the owner ran an experimental and since you mine was able to recover well over 1 million pounds of uranium.
We have all the records from the test work and will rely on that data to assist and design of the facility.
The decision to build out and operate Shirley basin will be predicated on signing long term contracts that derisk the capital expenditure.
Sufficient contracts are in place we believe we can build out the facility and have it in commercial operations within 24 months.
We are very aware of supply chain limitations in our first step will be to identify long lead items and get them order we.
We expect that this will include electrical equipment, such as Transformers, and motor control centers and other industrial instrumentation.
Such as flow meters.
We previously announced the completion of our Casper combined services facility, which is adjacent to our company owned office I'm Happy to report that we have started building header houses in town, which will reduce travel time to and from the mine site, which will in turn improve safety reduce emissions and fuel costs.
These slides show the external and internal of header house <unk>, six which is slated for production this fall.
Those of you with a keen eye you may notice that we have changed the style of flow meters to a dramatically smaller system that is also much easier to wire in.
Let's talk about the broader nuclear space, including supply and demand fundamentals and geopolitical risk.
The demand for nuclear fuel is expected to grow significantly over the coming decades as more countries are moving to nuclear power for its carbon free attributes for energy independence.
<unk> gets about 20% of our electricity and 50% of our carbon free electricity from nuclear power.
Southern company, just broad global unit III and the commercial operation and unit four is expected to come online late this year or early next.
Beyond that as a result of the inflation reduction act. Many utilities are seeking reactor life extensions power upgrades and extended time between fueling outages in order to generate more electricity.
California's Governor Newsome is advocating for Diablo canyon to extend its operation and in an unprecedented move there is serious consideration of bringing the palisades reactor in Michigan back online.
Globally, the number of reactors on order and proposed is growing at a fast rate.
There is also a move to design and construct small modular reactors with the idea that construction costs can be reduced by factory building small reactors.
Several companies around the world, including New scale Rolls Royce and Terra power have jumped into the fray.
Of particular interest to Wyoming nights, Bill Gates company Terrapower in GE Hitachi nuclear energy launched the Natrium SME project with involvement by Berkshire Hathaway's specific court.
They have announced plans for their first unit to be installed near Kemmerer, Wyoming adjacent to an existing coal fired plant that is slated for a shutdown.
In a recent poll the nuclear energy Institute valve that their members expect to have approximately 300 small modular reactors operating in the U S by 2050.
For context. There members include some very serious utilities, such as Duke Southern company and constellation.
This may seem a bit optimistic, but even if just a fraction of these small reactors are realized the additional demand for uranium will be material.
Terrapower just announced their plans to build dozens of <unk> in England.
Globally, the acceptance of nuclear power is growing at an unprecedented rate China is certainly the elephant in the room with stated plans to construct a 150 reactors within the next 15 years.
China alone could be responsible for growing the current reactor fleet from 436.
The 585.
China currently has 24 reactors under construction and they just approved the siting of six more units.
I won't read through this slide but suffice it to say the numerous countries are making strong moves toward nuclear power.
The initial move toward nuclear power was based on a desire to reduce emissions, but post invasion of Ukraine. Many countries are moving toward nuclear for the energy security and uncertain times.
Support for nuclear power is growing in the U S. As an increasing number of environmental groups such as the nature Conservancy climate coalition clear path and many others throw their support behind nuclear power.
Support for nuclear power is also growing in the U S Congress as both parties in rare bipartisan alignment are pushing nuclear legislation to grow the nuclear utility fleet for environmental energy independence and National security reasons.
For example, Congress has already passed a bill establishing the U S uranium reserve and funded it at $75 million in D. O was charged with establishing this program and in December of last year issued U R energy a contract for 100000 pounds of uranium at a price of $64 47.
<unk>.
Also of great importance to the industry is the passage of the civil nuclear credit program and the inflation reduction Act, which together have breathed new life into the industry. This is perhaps the most significant legislation impacting the nuclear industry ever.
Looking at pending legislation two of our most staunch supporters our senator Brasso, a Republican from Wyoming, and Senator Manchin, a Democrat from West Virginia.
A few days ago Senators Brasso imagine introduced the nuclear fuel Security Act as part of the National Defense Authorization Act or the N D E E.
The Senate passed a bill by a vote of 96% to three and a strong indication of rare bipartisan support.
The Bill is designed to expedite domestic production of Halo merge the U S uranium and American assured fuel supply and encourage domestic production of uranium.
The Bill is still needs to work its way through the house and across the President's desk.
There is also pending legislation to cut up low enriched uranium imports from Russia.
We expect this bill to be considered this fall while nearly everyone agrees, it's a bad idea to be supporting Russia by purchasing nuclear fuel from them. There is concern that western suppliers will be unable to build a gap created by sanctions. So it is unclear. If this legislation will pass.
The White House has also provided great support for the nuclear power industry and believes it will be difficult to reach our carbon emission goals without this critical baseload source of power.
It is impossible to having meaningful discussion about uranium supply and demand without touching on geopolitics, while Russia doesn't mind much uranium they dominate global processing in the form of conversion and enrichment.
About 46% of primary supply is mined in Kazakhstan, a former Soviet state that still has close ties with Russia and.
In fact, Russia has partial ownership of some of the largest uranium mines in Kazakhstan.
As the next slide we will show the Western World has limited ability to replace Russias processing or Kazakhstan mine supplies.
This is why the U S and European countries have been unwilling to date, the sanction low enriched uranium coming from Russia.
To better.
Quantify the supply risk I performed an unscientific review of uranium company websites in the World Nuclear Association online database. This table summarizes my findings there are only 15 countries in the world that produce uranium and of those most production comes from the top seven or eight countries.
Now about 76% of mine production is controlled by state owned enterprises, such as Iran, Though because Adam prom and rose Adam.
Unfortunately, a large percentage of production comes from countries that are aligned with the east instead of the west which significantly adds to supply chain risk.
The second table on the slide attempts to show the percentage of production that is eastern versus western aligned.
These are simply my estimates from an optimistic and pessimistic view.
I'm not a geopolitical scientists so I encourage you to run the numbers based on your own knowledge.
Of important note to uranium investors in my opinion, we have only one peer in the uranium mining space and that is chemical.
I am unaware of any other publicly traded companies with significant exposure to uranium prices that are currently mining uranium at a commercial level.
I am excluding because Adam prom, because only 15% of their shares are publicly traded and BHP because of their relative exposure to uranium mining at Olympic dam is minimal compared to the value they realize from other commodities.
Of course this conclusion may change soon if other companies initiate production.
By my estimates again based on an unscientific analysis. There are about 12 potentially serious companies, who have announced plans to begin mining uranium within the next five years.
Of those 12, perhaps three of projects of this scale.
Technical certainty and jurisdictions necessary to succeed.
The other nine will likely face significant challenges due to the known technical problems economics.
Local opposition and our scale.
Some of these nine may succeed, but theyre path is difficult.
A point to take away is that uranium mining as hard in the western World will have a hard time responding in a timely manner to a supply crunch.
Or even the most advanced institute projects that had been mothballed it will likely take about a year, Jeff Saleable company mine pounds in their inventory because they will need to hire staff and contractors train them ramp up production.
Phil plant circuits make deliveries and wafer assay at the conversion facility before making a sale.
By then a hot spot market may have evaporated.
To support the risked hypothesis, let's consider the top 10, producing mines of 'twenty two.
And the respective risks to production and sales to the west.
Most recently the cooling the share has raised concerns about production from the Sameer mine, which produces about 4% to 5% of the world's uranium.
Many long term followers of the uranium space will remember the cigar lake floods of 2006 and 2008.
Shipping logistics have become problematic for Russian L EU and Kazakh uranium due to a severe lack of carriers and insurance providers.
And this brings us back to the United States, where mine production over the past few years has been virtually nonexistent.
Not enough to run even one of our 94 reactors at.
U R energy, we are working to change that situation as we ramp up production at lost Creek.
Lost Creek is a scalable mine with the opportunity to grow the existing resource by exploring on 35000 acres of contiguous land.
As I mentioned earlier lost Creek has a reputation for being a low cost producer due to several factors, including fantastic average recovery rates of 90%, which is much higher than the U S industry average of 60% to 80%.
Also the royalty burden at lost Creek average is less than 1%, which is much better than many other U S projects that are encumbered with royalties of 3% to 8% or in some cases, even higher.
The map on this slide shows the lost Creek project in Blue surrounded by additional projects we control in Green.
The topography and this area is relatively flat so it will be technically feasible to pipeline additional resources into the processing plant at lost Creek.
We are currently mining within the H J geologic horizons.
However resources have been characterized in the F G and km horizons.
And mineralization has been identified in the L M and in Horizons, but has not been characterized adequately to determine if it can be brought into compliance resources.
In the future we plan to explore known roll fronts in each of these horizons.
This table shows actual statistics from lost Creek for the years 2014 to 2019 and shows that our cash costs have been as low as $16 27 per pound when we optimize our economies of scale.
While inflation will likely prevent us from reaching these cost again, we believe we can stay relatively close to these values going forward with all in mine site costs of around $34 per pound.
Additional economic analysis for both our lost Creek and Shirley Basin projects can be found in our September 2022 reports, which are linked on our company website.
Ramp up is in full swing with header house to dash for in full production.
House to Dash five is in construction and we plan to bring it online in September and follow that up with additional header houses this year.
Also of significance, we have just completed casing deep disposal wells five and completion work and testing will commence in the coming days.
It will likely take several months to receive permission to use the well under the existing UIC class one permit with the state of Wyoming.
Ramp up has been made possible by good planning to overcome numerous supply chain issues. We believe we have everything ordered or on hand for the next several header houses we have been fortunate to retain several of our most experienced personnel who are now training our new staff.
We still have a few positions open but that is not interfering with production.
When you are in in situ miner is it's easy to talk about Green energy since we are the tip of the spear.
The uranium resources that we plan to recover at lost Creek, and Shirley basin, when compared to coal fired power will offset approximately 312 million metric tons of Cotwo, which is the equivalent of taking $67 5 million cars off the road for a year.
We are taking additional steps to lighten our environmental footprint through the use of the new Casper shop, using an since you're mining, which has a minimal and temporary impact on the land service and by recycling water.
We have already reduced our water consumption by recycling about 99, 3% of the water, we use and we have a goal of recycling up to 99, 8% of the water we use by deploying advanced novel technologies that we're developing.
Research and development has always been a priority for U R energy and the top four bullets highlight some of the successes we've already had.
But we aren't resting on our laurels, we have embarked on developing a well casing and installation technique.
As one field testing demonstrates a 75% reduction in our drill rig time for injection wells.
We have had to delay phase two testing due to limited bandwidth during ramp up but hope to get back to testing well development and injection capacity in the near future.
As mentioned on the previous slide we are also working on an advanced water treatment and filtration system to reduce wastewater generation.
Turning to our Q2 financials.
As of August 3rd we had $63 $7 million of cash with the remaining inventory of 223790 pounds. We.
We expect to ship, our first load of Yellowcake since ramping back up in Q4.
We are fortunate to work in Wyoming, where there is strong public and government support.
Many of you will recall that we received a $34 million loan from the state at 575% interest.
As of early August the remaining principal on the loan is $7 $1 million and we.
To make the final payment in October of next year.
We have three multi year contracts in place with average pricing of about $62 per pound, which will result in revenue of about $220 million keep in mind that each contract has a small flex that may result, in slightly higher or lower deliveries, depending on the buyer's needs.
Our 2023, we expect to deliver an additional 180000 pounds into contracts for total 2023 revenue of $17 3 million.
In 2023, we expect the gross profit margin to be above 40%.
In subsequent years the contract book ranges from 600 to 700000 pounds per year.
Through 2028.
This represents only about 32% of our licensed mine capacity. So we have a lot of room to layer in additional sales contracts that prices continue to improve which we believe is likely.
In addition to revenue from the sale of uranium. We are also seeing small, but not insignificant revenues from interest income and waste disposal fees, which we expect to continue in the near future.
Our shares outstanding totaled $264 7 million with a market cap of around $278 million.
We maintain a strong cash position of $63 7 million.
Our share registry contains some of the most sophisticated names in uranium space, which we believe is validation of our company and projects.
We have outstanding liquidity and great analyst coverage in both the U S and Canada.
As we reached the end of the presentation I would like to just hit on a few of the highlights once more.
First we remain cached up so we can see our way through ramp up and into steady revenues. We also have a ready to sell inventory of 224000 pounds that can be sold into contracts.
Our goal is to ramp up law streak to full production and build out and ramp up Shirley basin is long term contracts justify.
We believe it's a great time to invest in the uranium space with so many market catalyst in motion catalysts that you are energy is well positioned to seize on.
Thank you for your time, we will turn out to the Q&A portion of the webcast.
At this time, we'll be conducting a question and answer session, we will be taking questions through the phone lines first.
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One moment, while we poll for questions.
Your first.
Question is coming from Heiko Ely from H C. Wainwright Your line is live.
Hey, there thanks for taking my questions Hope you guys are doing well.
Hey, Heiko, that's good to hear from you.
Always a pleasure you went through this tangentially in your prepared remarks, a little bit ago, but I'll try to take this step forward or there was a sentence in your release that intrigued me make it really happy and I'm just now quota here real quick you state that your energy continues growing our long term sales book as the market continues to improve ramp of production.
<unk> la screen oblique Shirley basin, none of it as a particular surprise, but given that a lot of uranium sales stemmed from places that have meaningfully meaningfully meaningfully increased geopolitical risk factors over the last two years.
We at least anticipate there to be a dual market in the longer term north American uranium solves for a very meaningful premium.
At least when looking at comparable valuations that trend appears to have started already.
Building on all of that what are your thoughts on how all of this will play out over the next few years and what measures such as long term offtake similar agreements you think the firm will undergo to benefit from these factors. Please.
Heiko, it's a good question and certainly something that is in the front of our thoughts and we're seeing that we're seeing a bifurcated market already I mean, we've already to a limited degree announced the sales price on those contracts that we've gotten and you can see that the average well above our existing spot or.
Long term prices. So we're already seeing that bifurcation in the market and it looks like western production U S. Production is worth several dollars a pound more than.
Uh huh.
Production from areas that may be exposed to more geopolitical risk and so we look forward to seeing that more as we go forward and I would comment to HEICO that not only are we getting a lot of inbounds from U S. Utilities, we are seeing increasing interest from other global players.
Because it's not just an issue for the U S. Everyone around the world recognizes the geopolitical risk and Theyre looking for diversification.
For many years the price of uranium was very low utilities were struggling with profitability.
And so they were willing to go for the lowest price no matter. The geopolitical risks they felt like they had to do that but now, especially the U S utilities are moving into profitability because of the inflation reduction Act and other actions that Congress has taken and as they move into that profitability. They are much more interest.
Did and diversifying that portfolio of offtake agreements to reduce the risks. So yes, heiko I think we're going to continue to see that it may be.
Creasing, we so we'll see what happens in new share, we'll see what happens with Russia, Ukraine, We will see a Kazakhstan gets embroiled in that in any way via sanctions or Russia.
Russia strong arming.
That nation as well, so we'll see what happens.
Fair enough next question is a lot shorter I'm looking at the U S. You uranium reserve how scalable is this.
Uh huh.
Given.
Sue, but theres going to be some sort of import restrictions in some capacity at least for some origin nations how much do you think your firm could ultimately sell into this program over the next five or 10 years. I mean, you gave some shorter term estimates, but work with me to the next decade, if you could.
Yeah, let's start with the legislation itself the previous uranium reserve that was approved by <unk>. During the Trump administration passed by Congress signed into law by Trump.
The funding of that has expired that was $75 million, we were able to grab a good piece of that we sold 100000 pounds into that uranium reserve.
<unk> hundred $64.47, a pound may delivery early this year and have been paid for that but at this point funding under that program.
There is no more funding.
Having said all of that Senator Brasso.
Senator Manchin Senator rice, they all work together Republicans and Democrats alike to get legislation passed and as an amendment to the M. D. A a national defense authorization Act that called for combining the uranium reserve with the American assured fuel supply.
So that was passed by a very large margin.
It still needs to go through a couple of more layers of approval through Congress and across the desk at the White House.
If thats passed it will combine those two.
We're hopeful that the Doe will get additional funding and that will be able to participate in that so until funding is allocated and that program has stood up it's hard to really speculate about our abilities to participate in it but.
But having said all that if it is passed and funded we would love to be able to sell more pounds into the uranium reserve.
We have a lot of capacity remaining at lost Creek.
And 100% of our capacity remaining at Shirley Basin that has not spoken for so we have significant ability to continue to ramp up production at lost Creek, and especially at Shirley Basin going forward, we would love to sell a portion of those pounds to the U S government.
That's helpful. Thank you so much I'll get back in queue.
Alright, thank you.
Thank you. Your next question is coming from Mike Kozak from Cantor Fitzgerald. Your line is live.
Hey, John Thanks for hosting the call just a couple of questions from me first do you think commercial production and then when I say that I mean at the call. It 600000 pound per year run rate do you think that's an achievable milestone at lost Creek by year end of this year.
So we're definitely working towards that our objective for this calendar year is to produce enough to sell into our contracts and we're moving toward that we still have a ways to go to ramp up to get to 600000 pounds for next year.
But is it possible, yes, absolutely possible.
We're not there yet and we got a little ways to go but it's only August we have a lot of summer left in moving into fall and we're keeping Steve Hatten, our chief operating officer very busy ramping up so yes, it's absolutely possible for us to do that but again our goal is not to produce 600000 this year.
Correct, Yeah produce roughly 180000 this year, but moving into next year move into that 600000 pound a year range.
It is important for us to get to economies of scale and Thats why we want to ramp up to that level and continue to move north of that as we were able to sign in additional sales contracts.
That's great. Thank you and that kind of dovetails into my second question, which was you added the 100000 pounds a year to the contract book in Q2.
My question was what what level of contract coverage.
Would you want to see before you kind of fully commit to the call. It one to $1 2 million pound per year full licensed run rate at lost Creek do you want to get like the fully a million pounds of your contracted or you know 75% of that 80% of that how should I think think about that coverage.
So it's always our objective to match production at lost Creek, and ultimately a truly basin with our contract book. So if we're contracted out at 900000, that's what we want to hit we'll probably try to give ourselves a little bit of buffer there, maybe 5%, 10% 15% buffer.
That way, if we run into any challenges regulatory wildlife you name. It that we've got a little bit of inventory that we can rely on and we like having that overage, but really we're just going to try to hit that contract number fairly closely going forward and that's also true as we move into Shirley basin.
He'd like to sell.
Secondly, maxed out production at lost Creek, and then begin to contract out for production of truly and justify the ramp up there as well.
Okay very good thanks for that I'll I'll hop back in queue.
Alright, good to hear from you.
Thank you. Your next question is coming from Joseph Reagor from Roth M. K M. Your line is live.
Hey, John and team thanks for taking the questions.
Most of what I wanted to touch on was already hit on by the previous two.
Colors, but.
There's you know there's news out about by the administration, making basically a moratorium on mining on a massive amount of land in Arizona.
You know how do you guys look at decisions like that by.
The U S government, where on one hand, they want this clean energy transition, but on the other hand, they don't want.
Conventional mining and does it not the benefit you because youre not a conventional minor in your mind or does it hurt you because theyre anti mining.
Well certainly it was a the wrong move.
The area that's been removed from uranium mining is not in the Grand Canyon I think that is a it's a complete miss statement that you hear a lot in the news that its Grand Canyon is not Grand Canyon, It's an area outside the Grand Canyon.
But I would also point out that our existing claims will have to be honored they're grandfathered in so the companies that are there and have well established claims you won't affect their rights directly.
However, I suspect it will make things a little more challenging trying to work within an area like that and with that designation, so but certainly the wrong move it is frustrating.
Where we have such a tremendous support for nuclear energy.
From Republicans and Democrats and the White House.
But when it comes to the fuel end of things there tends to be less support because it involves a mining.
Glad to say, we're not working in that area. We have never worked in that area. It's not our intention to move into that vicinity, where there's such opposition and would further add that we're realizing the institute technology.
So the impact of the land that we have is is minimal and it's 100% reversible.
And so just throw those two items out there, but no. It is really frustrating that the white house took that step certainly it's not good for some of our U S competitors are in the long run.
But hopefully with the additional education in time, maybe we can bring to the white house around to supporting mining more robustly, but Joe I. Appreciate that question. It's a very appropriate question given that just happened a few days ago.
Thanks for the color there I'm kind of building on the back of that.
You got a lot on your plate with the ramp up at lost Creek.
Got Shirley basin after that.
Looking further out what did you guys move on to more U.
U S potential expansion, maybe lost soldier or something like that or would you guys look to maybe potentially acquire something but not in the U S. Maybe in Canada.
Where you know it seems like there's a little bit more understanding that you need the mining too.
Yeah, I think the answer on both is yes, we are looking to expand operations beyond lost Creek and Shirley Basin.
We do have a number of exploration properties and development properties that we hold in our portfolio.
I think it would behoove us to continue to take a hard look at lost Creek, we have a number of properties surrounding it where we have known mineralization and resource and tremendous opportunity to grow that resource.
Over the years, we've done a lot of exploration in that in those areas.
Every program, we have been successful at finding significant additional resources and bringing them into compliance.
So before we go too far away from lost Creek and spend a lot of money.
Buying another project in the U S, especially are an exploration project I think we have a lot of green pasture and our immediate vicinity that we need to work on.
Having said that we control that already that's not going to go anywhere.
If and when opportunities come up to grow resources in the U S, Canada or other first world countries, where they are safe jurisdictions, where they have well established regulatory regimes to regulate mining.
And they they have quality resources that we believe we can mine profitably now or in the near term. We're certainly interested in that and that's certainly on the table and we will take a hard look at that.
We've been very disciplined.
At the beginning of this company our board has been very disciplined when it comes to M&A.
The only properties we've ever picked up are the ones that we felt like we could progress to economic production and we're going to remain disciplined when it comes to that.
So hopefully that answers your question Joe.
Yeah. Thank you for the well thought out answer there that covers my questions I'll turn it over.
Alright, thank you.
Thank you. Your next question is coming from Chris Thompson from Pi Financial Your line is live.
Hey, Chris you can go ahead.
And Chris Thompson Your line is live.
At this time, we will be taking questions through the webcast. If you are listening to the webcast you can submit questions by clicking on the ask a question button on the left of your screen type.
Type your question into the box and hit the send button to submit your question I will now hand, the floor over to our host for the webcast questions.
Alright, we must have done a good job in the presentation not seeing any questions come up on the web portion.
Give it another few seconds here to see if anybody wants to type in any questions there.
Okay I've got a question here are you open to market related contracts as well.
That's an interesting question and it's something that we struggle with internally all the time.
First three contracts that we have in place are effectively based price with an escalation in each of them that SM.
Essentially attempts to mimic inflation, we're really happy with those contracts because they've locked in some good revenues going forward and we know exactly what they're going to be a very close there is a flex involved but we know very close to what the revenue is going to be so we like those however, going for forward we recognize that.
The market prices are improving.
We're a little bit hesitant to lock in long term contracts in a rising market. So yes, we would be very interested to entertain contracts that have a market related provision going forward.
And so our conversations with utilities some of them like the base escalated some like market related some like combinations of them. So it depends on the utility we're in discussions with but really to more directly answer. Your question. Yes, we are interested in market related contracts going forward.
Alright, there are any other questions out there.
Alright.
By operating the system correctly I'm not seeing any additional questions.
So with that we will just begin to wrap things up here.
<unk>, everyone listening in and as you guys. All know I'm very easy to get a hold up so feel free to the email me or give me a call directly if you have any further questions that you didn't think of during the conference call here, we'd be glad to pick up the conversation, but just like to highlight right now that we are extremely well positioned.
Happy with where we are in the ramp up things are progressing we have a ways to go before we get to that 600000 pound Mark that we've talked about but we are well on our way in and moving forward.
So many catalysts right now in the uranium space and U R energy were cashed up we're ready to seize on those catalyst as they evolved so with that I'll return the balance of the afternoon to everyone. I Hope you enjoy the rest of your day and thank you again for participating.
Thank you. This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.