Executive Summary / Key Takeaways

• Ur-Energy is a US-based in situ recovery (ISR) uranium producer strategically positioned to benefit from growing domestic demand and geopolitical tailwinds favoring Western supply.
• The company is actively ramping up production at its Lost Creek mine and developing its second fully permitted project, Shirley Basin, aiming to nearly double its permitted annual production capacity to 2.2 million pounds U₃O₈.
• Recent financial results reflect ramp-up costs and non-cash adjustments, but the company maintains a strong cash position ($66.0 million unrestricted cash as of May 2, 2025) and is debt-free, providing financial flexibility for development plans.
• A solid multi-year contract book provides revenue visibility, with 2025 sales projected at 440,000 pounds U₃O₈ generating $27.1 million in revenue, and the company is seeking new market-related contracts to capture potential price upside.
• Key factors to watch include the successful execution of the Lost Creek ramp-up and Shirley Basin construction timelines, continued strength in uranium market fundamentals, and the impact of US government initiatives supporting domestic nuclear fuel production.

Setting the Scene: A US Uranium Producer's Moment

Ur-Energy Inc. stands as a dedicated US-based uranium mining company, focused on the acquisition, exploration, development, and production of uranium mineral resources, primarily within Wyoming's prolific Great Divide Basin. Its core business model centers on In Situ Recovery (ISR), a method that extracts uranium directly from the underground ore body through wells, offering distinct advantages over conventional hard rock mining.

The company's journey began in 2004, strategically building its asset base through acquisitions like the Lost Creek Project in 2005, which became its flagship operation and first ISR facility to commence production in 2013. This marked a pivotal shift from pure exploration to active production, establishing Ur-Energy as one of the few domestic uranium producers. The subsequent acquisition of Pathfinder Mines Corporation in 2013 added the Shirley Basin project, providing a second fully permitted development asset.

Ur-Energy's strategy has been shaped by the volatile uranium market, particularly the downturn following the Fukushima event. During challenging periods, the company strategically balanced its own production with market purchases to fulfill contracts, maintain cash flow, and build inventory, demonstrating adaptability. With improving market conditions and a strengthening contract book, the strategy has shifted towards ramping up production from its owned assets and developing new capacity.

The company's position is particularly relevant today amidst a global push for clean energy and increasing concerns over energy security and supply chain reliability, especially regarding uranium sourced from geopolitical rivals. As a domestic producer, Ur-Energy is uniquely positioned to potentially benefit from policies and utility procurement strategies favoring secure, Western-sourced nuclear fuel.

Technological Edge: ISR and the Pursuit of Efficiency

At the heart of Ur-Energy's operations is the In Situ Recovery (ISR) mining method. This technology involves injecting a mining solution (typically groundwater fortified with oxygen and carbon dioxide) into the permeable ore body to dissolve the uranium, which is then pumped to the surface for processing.

The tangible benefits of ISR are significant. It offers a lower environmental footprint compared to conventional mining, with minimal surface disturbance and no large open pits or tailings piles. Operationally, it can lead to lower operating costs due to reduced labor, energy, and material handling requirements. Historically, Lost Creek has demonstrated strong performance using ISR, achieving average recovery rates of 90%, significantly higher than the typical US industry average of 60% to 80%. This higher recovery rate directly translates to more efficient extraction of the resource.

Ur-Energy is also engaged in research and development initiatives aimed at further enhancing its ISR operations. These include developing a new well casing and installation technique, which Phase 1 field testing indicated could achieve a 75% reduction in drill rig time for injection wells. While Phase 2 testing has been temporarily delayed during the current ramp-up, the stated goal is to improve efficiency and reduce costs. Additionally, the company is working on an advanced water treatment and filtration system with the goal of recycling up to 99.8% of the water used, further reducing wastewater generation and environmental impact.

For investors, this technological differentiation is a key component of Ur-Energy's competitive moat. The inherent cost advantages and lower environmental profile of ISR, particularly with high recovery rates, contribute to potentially better margins and a more sustainable operation. Ongoing R&D, while facing temporary delays, signals a commitment to continuous improvement that could further reduce costs and enhance environmental performance in the future.

The Competitive Arena: Positioning in a Shifting Landscape

Ur-Energy operates within a competitive landscape dominated by a few larger global players and a handful of North American peers. Key competitors include Energy Fuels Inc. (UUUU), Uranium Energy Corp (UEC), and the global giant Cameco Corporation (CCJ).

Compared to larger players like CCJ, Ur-Energy operates on a significantly smaller scale. CCJ benefits from vast resources and economies of scale, often achieving greater efficiency through advanced technology and integrated operations. However, Ur-Energy's strength lies in its concentrated, fully permitted US asset base. This domestic focus provides potential advantages in navigating the US regulatory environment and positions the company favorably for domestic procurement initiatives, such as the US Uranium Reserve program or utility contracts prioritizing secure supply.

Against US-focused peers like UUUU and UEC, Ur-Energy's competitive position is nuanced. While UUUU has diversified into rare earth processing at its White Mesa mill, offering a different value proposition and potentially lower operating costs through scale and integration, Ur-Energy remains a pure-play uranium producer leveraging its ISR expertise. UEC also focuses on US ISR assets and has demonstrated agility in acquisitions. Ur-Energy's historical performance at Lost Creek showcased its capability as a low-cost producer when operating at higher volumes, with cash costs per pound produced around $24 in Q4 2018. While recent costs have been higher during the ramp-up phase, the goal is to return to lower costs as production increases.

Ur-Energy's ISR technology provides a cost advantage over conventional mining methods employed by some competitors. Its established permits and operational readiness at Lost Creek, coupled with the fully permitted Shirley Basin project, position it as a "pounds in the can" or near-term production story, contrasting with companies primarily holding "pounds in the ground" that require significant time and capital for development and permitting.

The company's customer base consists primarily of US nuclear utilities under multi-year sales agreements. Supplier dynamics, particularly for specialized equipment like industrial instrumentation and electrical components, remain a challenge with long lead times, impacting operational ramp-up and construction timelines. Ur-Energy strategically positions itself by emphasizing its reliable US-based supply, leveraging its permitted capacity, and seeking contract terms that provide both stability and exposure to potential market upside. The growing risk of a bifurcated East vs. West supply chain, where Kazakh production might increasingly flow East, further enhances the strategic value of reliable Western, and particularly US, supply sources like Ur-Energy.

Operational Momentum and Financial Performance

Ur-Energy is currently focused on ramping up production at its Lost Creek facility and advancing the development of Shirley Basin. In Q1 2025, the company drummed 83,066 pounds and shipped 106,301 pounds to the conversion facility. Subsequent to the quarter, an additional 35,287 pounds were shipped, bringing the inventory at the conversion facility to 403,827 pounds as of May 2, 2025. Operational improvements are being realized, with the wellfield flow rate at Lost Creek increasing by 44% since the beginning of March 2025, now routinely exceeding 2,800 gallons per minute. Head grade remains on target and is trending positively. The processing plant is becoming more consistent, with both dryers operating routinely.

The ramp-up has faced challenges, including those related to training new staff and optimizing plant efficiency, which impacted the speed of production increases in 2024. Supply chain issues, particularly for electrical equipment and instrumentation, also require long lead times (12-18 months), necessitating proactive ordering. However, the company has largely overcome immediate manpower issues at Lost Creek and is leveraging its experienced staff to train new hires. The Casper construction shop is supporting header house development for both Lost Creek and Shirley Basin.

Financial performance in Q1 2025 reflected the nature of the business cycle, with no product sales recorded during the quarter due to the timing of deliveries under contracts. Cost of sales totaled $2.60 million, primarily consisting of lower of cost or net realizable value (NRV) adjustments ($0.5 million for produced inventory, $2.1 million for non-produced inventory), influenced by the decrease in the average spot price during the quarter. Operating costs decreased by $1.9 million year-over-year to $13.24 million, mainly due to the completion of a deep disposal well at Lost Creek in Q1 2024, partially offset by increased wellfield development drilling at Lost Creek and the initiation of development costs at Shirley Basin in February 2025 ($0.62 million in Q1 2025).

The company reported a net income of $10.90 million in Q1 2025, a significant improvement from a $18.54 million loss in Q1 2024. This was largely driven by a $4.31 million mark-to-market gain on the inventory derivative obligation and warrant liability, compared to a $2.76 million loss in the prior year period. Interest income also increased due to higher cash balances and interest rates.

Liquidity remains a strength. As of March 31, 2025, cash and cash equivalents totaled $74.85 million, with restricted cash of $11.14 million, for a total of $85.99 million. Unrestricted cash stood at $66.0 million as of May 2, 2025. The company is debt-free as of March 2024, having fully repaid its Wyoming State Bond Loan.

Operating activities generated $2.8 million in Q1 2025, while investing activities used $3.8 million, primarily for Shirley Basin construction and equipment.

Outlook and Strategic Path Forward

Ur-Energy's outlook is centered on increasing production, developing its second mine, and capitalizing on favorable market conditions. For 2025, the company projects total sales of 440,000 pounds of U₃O₈ at an average price of $61.56 per pound, expecting to realize revenues of $27.10 million. These deliveries are committed to two customers under contracts negotiated in 2022 and 2023. Deliveries are scheduled for Q2, Q3, and Q4 2025.

The ramp-up at Lost Creek is expected to continue throughout 2025, with additional header houses coming online and flow rates increasing. The goal is to reach and sustain steady-state higher production levels cost-effectively. As production increases and shipments continue, the cost per pound in inventory is expected to decrease.

Development at the Shirley Basin Project is on target for an early 2026 mine startup. Construction activities are progressing, including road upgrades, monitor well installation, power and communication systems, and earthwork for the satellite plant foundation. The satellite plant, designed to process up to 1 million pounds U₃O₈ annually, is expected to cost approximately $24.5 million in capital and $16.3 million in pre-operational wellfield development. The company anticipates spending approximately $34.0 million at Shirley Basin in 2025, funded by operating cash flow and cash on hand. The satellite approach leverages the existing processing capacity at Lost Creek, minimizing initial capital outlay.

Ur-Energy's contract book currently includes seven multi-year agreements anticipating sales of approximately 5.84 million pounds U₃O₈ between 2025 and 2033. The company is actively seeking new contracts, with a preference for market-related pricing components (floors and ceilings) to benefit from potential future price increases. The current contract book represents only a portion of the company's licensed capacity, leaving significant room for future sales agreements.

Beyond Lost Creek and Shirley Basin, the company holds other prospective properties and plans to restart exploration programs in 2025 to identify additional mineral resources and supplement future production. This includes renewed analysis of projects like Lost Soldier.

The broader market outlook remains positive, driven by growing global support for nuclear energy as a carbon-free baseload power source, the construction of new conventional reactors and Small Modular Reactors (SMRs), life extensions for existing reactors, and increasing energy security concerns leading utilities to seek reliable, non-Eastern supply. Recent US government actions, such as the ban on Russian LEU imports and emergency permitting procedures for domestic energy projects, signal strong support for the domestic nuclear fuel cycle.

Risks and Challenges

Despite the positive outlook, several risks could impact Ur-Energy's plans. Operational execution risk remains, particularly in successfully completing the ramp-up at Lost Creek to targeted production levels and achieving expected cost efficiencies. Supply chain challenges, especially for critical equipment, could cause delays or cost overruns. While manpower issues at Lost Creek are improving, retaining and training staff, particularly for the Shirley Basin ramp-up, could pose challenges.

Regulatory risks, although mitigated by the company's fully permitted status at its key projects, can still impact timelines for expansions or new permits. Commodity price volatility is inherent in the uranium market, and while current prices are favorable, significant declines could impact profitability, especially for uncontracted production. Geopolitical risks, while currently acting as a tailwind for Western producers, could also disrupt the market in unpredictable ways.

Competition from other producers, both domestic and international, could affect market share and pricing power. The successful and timely buildout of Shirley Basin is critical, and any delays or cost increases could impact the company's financial position and growth trajectory.

Conclusion

Ur-Energy is strategically positioned as a leading US ISR uranium producer at a time when domestic supply security and nuclear energy are gaining prominence. The core investment thesis rests on the successful ramp-up of the Lost Creek mine, the timely and cost-effective development of the Shirley Basin project, and the company's ability to leverage its permitted capacity and reliable US supply to secure favorable long-term contracts in a strengthening market.

While operational ramp-up and supply chain challenges present execution risks, the company's strong cash position, debt-free balance sheet, and existing contract book provide a solid foundation. The projected 2025 sales revenue offers near-term financial visibility, and the development of Shirley Basin is set to significantly increase future production capacity. As global demand for secure, carbon-free nuclear fuel continues to grow, Ur-Energy's domestic ISR assets and technological approach offer a compelling opportunity to capture market share and enhance shareholder value, provided it can effectively navigate the complexities of operational execution and market dynamics.