Item 7. Management’s Discussion and Analysis
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
Business Overview
The following discussion is designed to provide information that we believe necessary for an understanding of our financial condition, changes in financial condition and results of our operations. The following discussion and analysis should be read in conjunction with the accompanying audited consolidated financial statements and related notes. The financial statements have been prepared in accordance with US GAAP.
Industry and Market Update
Recognition of the critical role nuclear energy plays in providing baseload power for decarbonization has been complemented more recently as energy security has become a universal priority. Energy security includes not only the heightened concern over Russian supply, but other areas of geopolitical unrest. Throughout 2024, both U.S. and non-U.S. utilities increasingly sought non-Russian supplies when negotiating uranium term sales agreements. This change of supply priority reflects the concern over existing and possible additional sanctions as well as the prospect that Russia of its own volition will refuse to export committed nuclear fuels to the U.S. In either circumstance, the utilities remain at significant risk as the West has limited capacity to backfill such supply disruption, regardless of cause.
In the U.S., the ban on Russian imports of nuclear fuels, signed into law earlier in the year, became effective in August 2024. While allowing certain waivers until January 1, 2028, the prohibitions on imports continue through 2040. The ban will help to secure the U.S. nuclear fuel supply chain and advance domestic uranium recovery operations.
The effects of geopolitical tensions beyond Russia will continue to have a role in the nuclear fuel cycle industries. The true scope and possible long-standing impact of China in the nuclear market remains undefined.
The nuclear markets have been favorably affected in many ways through greater acceptance of nuclear energy. Recently, technology and other industries operating data centers (in what is now simply being referred to as “big data”) have realized the opportunities which exist to maintain carbon free baseload electricity while supporting the immense electric demand generated by these centers. The Electric Power Research Institute’s May 28, 2024, white paper titled Powering Intelligence, suggests that data centers are expected to consume as much as 9.1% of U.S. electricity generation by 2030 compared with an estimated 4% today. It is further estimated that, globally, data centers will drive electricity demand in many regions. Projections suggest that 2026 electricity consumption for data centers alone will be the equivalent of the electricity consumption of Japan.
Several significant power purchase agreements have been announced in recent months, including the largest-ever purchase agreement by Constellation Energy to power data centers owned by Microsoft for 835 megawatts of electricity. This agreement will result in the restart of the Three Mile Island Unit 1 nuclear reactor in Pennsylvania. While contributing 835 megawatts of carbon-free electricity to the grid, this historic project will create 3,400 jobs and offset approximately 61 million metric tons of CO 2 emissions over 20 years. Still others in big data, including Google and Amazon, have announced plans to utilize nuclear energy to satisfy these rapidly growing electrical needs.
The U.S. Department of Energy (DOE) has been progressing its requests for proposals under both its high-assay, low-enriched uranium (HALEU) and low-enriched uranium (LEU) programs for which domestic uranium supply is preferred. In October 2024, the DOE announced it awarded contracts to Centrus Energy Corp., Orano SA, General Matter Inc. and Louisiana Energy Services (a URENCO company) to provide enrichment services to develop HALEU to fuel small modular nuclear reactors. The contracts for enrichment are worth up to $2.7 billion over the next ten years. These programs also reflect efforts by the U.S. to advance energy security; Russia has been the only potential commercial source of HALEU.
The Trump administration has prioritized several initiatives including Executive Orders to increase domestic energy and critical minerals production and strengthen American leadership in Artificial Intelligence (“AI”). AI infrastructure has energy needs that are multiples of traditional data centers. In addition, the Trump administration has noted that it may implement tariffs on certain countries to strengthen border security and address trade deficits which may be beneficial for U.S. uranium producers that intend to supply U.S. utilities. Recently, U.S. Department of Energy Secretary Wright issued a secretarial order titled “ Unleashing the Golden Era of American Energy
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Dominance.” The order states, in part, “[t] he long-awaited American nuclear renaissance must launch during President Trump’s administration. As global energy demand continues to grow, America must lead the commercialization of affordable and abundant nuclear energy.” Also, in February 2025, the Trump administration, through an Executive Order, established the National Energy Dominance Council which has numerous goals including “bringing Small Modular Reactors online.”
Internationally, support for nuclear power continues to grow with strong support in Spain, Belgium and Switzerland to keep their reactors on-line. There is also a movement within Germany to restart shuttered reactors given the high cost of renewable energy. Many other countries which historically have not been home to nuclear power are considering or moving toward legalizing nuclear power with the goal of building conventional or small modular reactors.
The volatility in the spot market continued throughout 2024. Following earlier increases in uranium market pricing in 2022 and 2023, pricing throughout 2024 retracted. After passing the $100 per pound U 3 O 8 milestone in early 2024, the spot price gradually declined throughout the year to end in the low $70s. In early 2025, spot pricing further retracted to the mid-$60s.
Conversely, after beginning 2024 at $68 per pound, term market prices gradually increased throughout the year to end at $80.50 per pound U 3 O 8 . Term prices thus far in 2025 have remained steady.
2024 Developments
Lost Creek Property – Great Divide Basin, Wyoming
Status of Lost Creek
Since commencement of operations at Lost Creek in 2013 through December 31, 2024, we have captured more than 3.0 million pounds of U 3 O 8 .
Ramp up continued at Lost Creek in 2024 with six header houses coming online. Most recently, Header House (HH) 2-12 came online in late January 2025 and HH 2-13 was brought online in late March 2025. The average production solution head grade in Q4 2024 was 66.2 mg/L. We captured approximately 81,771 pounds U 3 O 8 in Q4 2024, and a total of 265,746 pounds U 3 O 8 in 2024. We drummed 74,006 pounds U 3 O 8 in Q4 2024 and a total of 249,209 pounds U 3 O 8 in 2024. Pounds captured increased from 103,487 pounds in 2023 to 265,746 pounds in 2024.
Lost Creek Operations
In 2024, wellfield delineation and development continued in MU2, in what is referred to as Phase 2 within MU1 and, most recently, in MU5. All remaining planned production areas of MU2 are expected to come online during 2025 with HHs 2-12 and 2-13 online in Q1 and HHs 2-14 and 2-15 expected to begin operation in Q2 2025. HH 2-14 is onsite and set on its foundation, with construction underway (basement piping, pipeline, electrical connections, etc.). During the latter half of 2025, we anticipate bringing several header houses online in MU1 Phase 2 as we advance toward full plant capacity production. The first of those header houses (1-14 and 1-15) are awaiting delivery to Lost Creek, and 1-16 is being assembled in our Casper construction facility.
We completed the additional deep disposal well at Lost Creek in 2024 H1 and, following receipt of all regulatory approvals, began operations of the well in early Q4 2024. The deep well is operating as anticipated to complement the other wastewater disposal systems at Lost Creek.
The restart at Lost Creek has encountered challenges. Commissioning new production areas and recommissioning plant operations, not unexpectedly, come with unique start-up issues. The recovery of U 3 O 8 in MU2 and the restart of plant operations have been no exception. As the plant was being recommissioned, we encountered equipment issues that temporarily stalled plant throughput.
During 2024, we continued to encounter staffing issues, including lower than preferred retention rates, which affected our ability to thoroughly train our teams. Lost Creek’s staff of approximately 75 onsite and six staff members in Casper, is largely complete, and, more recently, we are experiencing stronger retention, which facilitates more thorough training. As our growing core staff have more time on the job, we are seeing steady improvement in production activities.
Our drill contractors now have 21 drill rigs at Lost Creek, with the most recent addition mobilized in February 2025. We anticipate that this number is sufficient for Lost Creek drill programs in 2025, including our planned exploration program.
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We continue to benefit from our advance ordering and recycling of equipment at Lost Creek while supply chain issues continue. All construction materials are ordered for planned operations months in advance. Parts and materials are always in various stages of delivery depending on availability. We will continue to supplement purchases with recycled materials as necessary.
Lost Creek Regulatory Proceedings
The first two mine units at Lost Creek have all permits necessary for commercial level operations. We have received Wyoming Uranium Recovery Program (“URP”) approval of the amendment to the Lost Creek source material license to include recovery from the LC East Project (HJ and KM horizons) immediately adjacent to the Lost Creek Project and additional HJ horizons at the Lost Creek Project. This license approved access to six planned mine units in addition to the already licensed three mine units at Lost Creek. The approval also increased the license limit for annual plant production to 2.2 million pounds U 3 O 8 which includes wellfield production of up to 1.2 million pounds U 3 O 8 and confirmed toll processing up to one million pounds U 3 O 8 .
We anticipate the Wyoming Department of Environmental Quality (“WDEQ”), Land Quality Division (“LQD) will approve the LC East and KM horizon amendment during H1 2025. The amendment adds HJ and KM geological horizons within the area that is immediately adjacent to the existing permit and provides for an additional mine unit in the HJ geological horizon for the existing permitted area. Water Quality Division (“WQD”) continues to work with EPA toward the issuance of the required aquifer exemption for the expanded area. We anticipate that all approvals will be received on a timely basis for our current production plans.
Our request for extension of our Lost Creek source material license was submitted in 2021. The license renewal is in timely review and continues to proceed through the technical review with URP.
2024 Purchases and Sales of U 3 O 8 and Sales Projections for 2025
As projected, during 2024, we sold 570,000 pounds U 3 O 8 of which 395,000 pounds U 3 O 8 were sold in Q4 2024. We received sales proceeds of $33.1 million for the 570,000 pounds U 3 O 8 sold.
To establish a strong product inventory, we purchased 300,000 pounds U 3 O 8 in Q4 2024 at an average cost of $80.61. Additionally, we secured an inventory loan facility under which we borrowed 250,000 pounds U 3 O 8 in December 2024. These transactions facilitated a timely delivery into our sales commitments in Q4 2024. We anticipate that having these pounds in inventory will allow us to cover any further delays in production ramp up and to make deliveries when there is simply a shortfall due to the timing of scheduled delivery dates in a given delivery year.
We have reached agreement to defer the anticipated 2025 delivery of 300,000 pounds U 3 O 8 into 2026 H1, after which our sales in 2025 are projected to be 440,000 pounds U 3 O 8 into our sales agreements.
Sales Agreements
Beginning in 2022, we have secured seven multi-year sales agreements with global nuclear purchasers. Of these, we completed three new agreements in 2024, including a sales agreement signed in February 2024 for annual delivery of between 100,000 and 350,000 pounds U 3 O 8 over a five-year period beginning in 2026. The agreement includes the opportunity for the purchaser to add up to three additional annual deliveries of 300,000 pounds U 3 O 8 beginning in 2031. The pricing for the sales under this agreement is a combination of an escalated fixed price, which is well above the anticipated all-in costs of production, and market related pricing that is subject to an escalated floor and ceiling. The purchaser has the option of a small flex to the annual delivery.
In April 2024, we executed an additional sales agreement which calls for annual delivery commitments of up to 100,000 pounds U 3 O 8 in 2026 through 2029, a portion of which is based upon production milestones. Pricing is a combination of escalated fixed price, well above anticipated all-in costs of production, and a market-related pricing component that is subject to an escalated floor and ceiling. We have provided notice to the buyer of satisfaction of the milestones related to the 2026 and 2027 deliveries.
In November 2024, we completed an additional sales agreement which calls for deliveries of 100,000 pounds U 3 O 8 in each of 2029, 2032 and 2033, and a delivery of 150,000 pounds U 3 O 8 in 2030. Pricing is a combination of market related pricing subject to floor and ceiling parameters escalated annually, and a base escalated fixed price. Pricing is well above our anticipated all-in costs of production.
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We have seven off take sales agreements with various global nuclear purchasers which provide for deliveries between 2025 and 2033 as follows:
Base Quantity
Year
(U 3 O 8 Pounds)
2025
440,000
2026
1,250,000
2027
1,150,000
2028
1,300,000
2029
800,000
2030
700,000
2031
—
2032
100,000
2033
100,000
5,840,000
Shirley Basin Project
Based on our contract book and the state of the market generally, early in 2024, we announced a “go” decision to begin buildout of our Shirley Basin in situ recovery facility in Carbon County, Wyoming. Thereafter, we initiated several work programs for the year which complemented our initial purchasing plan for long lead-time equipment which began in 2023.
Installation of 125 monitor wells at Shirley Basin was completed in 2024 including the 98 wells required for the first mine unit at Shirley Basin (SBMU1). Hydrologic testing for the SBMU1 newly installed monitor wells yielded excellent results that are consistent with historic test results. Twenty-five other monitor wells were installed to enhance operational readiness, including seven injection and production pattern test wells. Installation of downhole pumps in the monitor wells will begin in H1 2025 allowing baseline sampling to be completed. Installation of SB MU1 production wells will begin in Q2 2025 utilizing approximately six drill rigs. Construction of SBMU1 wellfield infrastructure ( e.g., pipelines, powerlines and field access roads) is expected to begin in Q2 2025. Fabrication of header houses in our Casper construction shop will commence mid-year as well.
Subsequent to year-end, we initiated production and injection testing of representative wells in Mine Unit 1 to facilitate better engineering of pumping and pipeline systems. The related analyses are ongoing. Tests to date indicate that flow rates are high. We expect flow rates will vary throughout the project but the production rates in the individual test pattern wells are within the range of 70 to 80 gpm. These rates are consistent with the high historic inflow of water into the underground workings at Shirley Basin in the early 1960s that drove innovation toward in situ mining at the project and resulted in the recovery of 1.5 million pounds of U 3 O 8 through ISR, before other mining methods were initiated.
The existing south access road to the site has been upgraded to an all-season road. Power supply to the satellite plant construction area has been completed and the line is energized. The septic system is installed. Construction of fifteen IX columns remains on target with delivery expected in Q3 2025. Our purchasing program for equipment and long-lead time items such as ion exchange resin continues, with an emphasis on continually reviewing and acting on purchases of long lead-time items such as electronic components. The local power company is upgrading and refurbishing the existing electrical substation with the goal of completing the upgrade in Q4 2025 prior to commencement of production operations. A backup trailer-mounted substation is available if the work is not timely completed.
Initial plans to construct new offices and shops were revised in favor of installing modular offices and utilizing existing buildings for shops. Renovations of existing site buildings which will be used for construction, maintenance and drill casing facilities are substantially complete. The office building layout has been approved the modular office space will be approximately 2,400 square feet. The building is anticipated to be delivered in Q3 2025. Additional modular office and facility buildings have been purchased and are on site at Shirley Basin.
Engineering related to the satellite plant, including the wastewater treatment system, is nearing completion and the selection process of construction contractors is well underway. We continue to expect construction at Shirley Basin to be complete in late 2025 with a pre-operation inspection by the State of Wyoming following soon after.
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Drilling and wellfield development is scheduled to begin in Q2 2025, with an anticipated six drill rigs onsite for the 2025 program. Delineation and exploration drilling were completed historically, and initial detailed wellfield, pipeline and header house layouts have been finalized. Procurement of equipment and materials required for trunkline piping from the wellfield to the plant site has begun and staff are installing the necessary monitor well sampling equipment to support that next phase of work.
We have begun hiring Shirley Basin management and construction and development staff. Additional staff will be hired along a planned schedule throughout the year in order to allow time for task and safety training.
Shirley Basin is fully permitted and licensed, with all major regulatory approvals for construction. The project has a licensed wellfield capacity of one million pounds U 3 O 8 per year. The Company plans three relatively shallow mining units at the project, where we plan to construct a satellite plant, from which loaded resin will be sent to Lost Creek for processing. The annual production of U 3 O 8 from wellfield production and toll processing of loaded resin or yellowcake slurry will not exceed two million pounds equivalent of dried U 3 O 8 product.
Corporate Developments
Equity Financing
On July 29, 2024, the Company closed an underwritten public offering of 57,150,000 common shares at a price of $1.05 per common share. The Company also granted the underwriters a 30-day option to purchase up to 8,572,500 additional common shares on the same terms. The option was exercised in full. Including the exercised option, Ur-Energy issued a total of 65,722,500 common shares. The gross proceeds to Ur-Energy from this offering were approximately $69.0 million. After fees and expenses of $3.8 million, net proceeds to the Company were approximately $65.2 million.
Prepayment of State Bond Loan
On February 29, 2024, we provided notice to Sweetwater County, Wyoming, the Wyoming State Treasurer and the Trustee of our intention to prepay all remaining amounts on the State Bond Loan on April 1, 2024. We completed the pre-payment of the remaining $4.4 million on our State Bond Loan on March 27, 2024.
Senior Management and Changes in Board Composition
In March 2024, we expanded our executive team with the appointment of Ryan Schierman as our Vice President Regulatory Affairs. Prior to joining Ur-Energy, Mr. Schierman held numerous positions in management, most recently at Fluor/Idaho Environmental Coalition, contractors to the U.S. Department of Energy, at the Idaho Cleanup Project. Mr. Schierman has also held several positions in the uranium recovery industry, gaining expertise in regulatory relations and compliance, licensing, and environmental health and safety. As the Wyoming Uranium Recovery Program Manager (2015-2020), Mr. Schierman was critical in assisting Wyoming to become the 38th US Nuclear Regulatory Commission Agreement State. Mr. Schierman earned a B.S. in Environmental Science from Brigham Young University, a M.Sc. in Health Physics from Idaho State University, and is a Certified Health Physicist.
In April 2024, we announced the appointment of John Paul Pressey and Elmer W. Dyke as new members of the Ur-Energy Board of Directors. And, following the Company’s Annual Meeting of Shareholders, June 6, 2024, founding Director James M. Franklin and Director, and former President and CEO, W. William Boberg both retired.
John Paul Pressey had a nearly three-decade long career in the assurance practice at PricewaterhouseCoopers LLP, with 16 years as a partner. With a Bachelor of Commerce degree from the University of Alberta, Mr. Pressey is a Chartered Professional Accountant with extensive experience working with U.S. and Canadian publicly traded companies in the mining industry, and other industries including manufacturing, utilities, and alternative energy. His experience includes acquisitions and capital markets transactions, working with clients to identify and implement practical business solutions to accounting, audit and financial issues. Mr. Pressey spent six years at PricewaterhouseCoopers as its Assurance Leader for British Columbia, overseeing all aspects of PricewaterhouseCoopers’s assurance results and operations for that Province.
Elmer Dyke has over 25 years’ experience in the commercial and government nuclear industry. Mr. Dyke has a Bachelor of Arts Degree in International Political Economy from Davidson College and served as a U.S. Army Officer for 13 years. Mr. Dyke’s professional career includes a tenure with the U.S. Department of State during which he directed international security programs, including nuclear nonproliferation and high technology projects and was detailed to the Departments of Defense and Commerce. Mr. Dyke has worked within global firms NAC International and Booz Allen Hamilton where he served as an expert on nuclear nonproliferation, strategy and
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nuclear fuel cycle. More recently, Mr. Dyke filled senior executive roles at Centrus Energy Corporation, a global nuclear fuel supplier and technical services provider. At Centrus Energy and in prior executive roles, Mr. Dyke led strategic planning and business development, financial performance, and risk management for the businesses. Currently, Mr. Dyke leads New Horizons Nuclear Associates, LLC, a global nuclear consulting firm he formed in 2021.
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Results of Operations
Reconciliation of Non-GAAP measures with US GAAP financial statement presentation
The following tables include measures specific to U 3 O 8 sales, product cost, product profit, pounds sold, price per pound sold, cost per pound sold, and product profit per pound sold. These measures do not have standardized meanings within US GAAP or a defined basis of calculation. These measures are used by management to assess business performance and determine production and pricing strategies. They may also be used by certain investors to evaluate performance. The following two tables provide a reconciliation of U 3 O 8 price per pound sold and U 3 O 8 cost per pound sold to the consolidated financial statements.
U 3 O 8 Price per Pound Sold Calculation
Unit
2023
2024
Sales per financial statements
$000
17,679
33,706
Disposal fees
$000
(351)
(560)
U 3 O 8 sales
$000
17,328
33,146
U 3 O 8 pounds sold
lb
280,000
570,000
U 3 O 8 price per pound sold
$/lb
61.89
58.15
Sales per financial statements includes U 3 O 8 sales and disposal fees. Disposal fees received at Pathfinder’s Shirley Basin facility do not relate to the sale of U 3 O 8 and are excluded from the U 3 O 8 sales and U 3 O 8 price per pound sold measures.
U 3 O 8 Cost per Pound Sold Calculation
Unit
2023
2024
Cost of sales per financial statements
$000
19,365
42,679
Lower of cost or NRV adjustment
$000
(10,689)
(6,005)
U 3 O 8 product costs
$000
8,676
36,674
U 3 O 8 pounds sold
lb
280,000
570,000
U 3 O 8 cost per pound sold
$/lb
30.99
64.34
Cost of sales per the financial statements includes U 3 O 8 costs of sales and lower of cost or NRV adjustments. U 3 O 8 cost of sales includes ad valorem and severance taxes related to the extraction of uranium, all costs of wellfield and plant operations including the related depreciation and amortization of capitalized assets, reclamation, and mineral property costs, plus product distribution costs. These costs are also used to value inventory. The resulting inventoried cost per pound is compared to the NRV of the product, which is based on the estimated sales price of the product, net of any necessary costs to finish the product. Any inventory value in excess of the NRV is charged to cost of sales in the financial statements. NRV adjustments, if any, relate to U 3 O 8 inventories and do not relate to the sale of U 3 O 8 , and are excluded from the U 3 O 8 cost of sales and U 3 O 8 cost per pound sold measures.
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U 3 O 8 Product Sales
The following table provides information on our U 3 O 8 product sales.
Unit
2023
2024
U 3 O 8 Product Sales by Product Type
U 3 O 8 Product Sales
Produced
$000
13,670
16,646
Non-produced
$000
3,658
16,500
$000
17,328
33,146
U 3 O 8 Pounds Sold
Produced
lb
223,259
270,000
Non-produced
lb
56,741
300,000
lb
280,000
570,000
U 3 O 8 Price per Pounds Sold
Produced
$/lb
61.23
61.65
Non-produced
$/lb
64.47
55.00
$/lb
61.89
58.15
The Company made the decision to ramp up operations after securing new term contracts in 2022 with initial deliveries beginning in 2023. In 2023, we delivered 280,000 produced pounds into term contracts at an average price per pound sold of $61.89. In 2024, we delivered 570,000 pounds at an average price per pound sold of $58.15.
The higher 2023 price was influenced by the sale of 100,000 pounds into the U.S. Department of Energy (“DOE”) uranium reserve program at $64.47 per pound sold. The lower 2024 price resulted from making a delivery of 300,000 pounds at $55.00 per pound into a sales contract that was executed in 2022 when the long-term price was between $43 and $52 per pound.
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U 3 O 8 Product Costs
The following table provides information on our U 3 O 8 product costs.
Unit
2023
2024
U 3 O 8 Product Cost by Product Type
U 3 O 8 Product Cost
Ad valorem and severance taxes
$000
132
287
Cash costs
$000
4,153
10,908
Non-cash costs
$000
1,976
2,719
Produced
$000
6,261
13,914
Non-produced
$000
2,415
22,760
$000
8,676
36,674
U 3 O 8 Pounds Sold
Produced
lb
223,259
270,000
Non-produced
lb
56,741
300,000
lb
280,000
570,000
U 3 O 8 Cost per Pound Sold
Ad valorem and severance taxes
$/lb
0.59
1.06
Cash costs
$/lb
18.60
40.40
Non-cash costs
$/lb
8.85
10.07
Produced
$/lb
28.04
51.53
Non-produced
$/lb
42.56
75.87
$/lb
30.99
64.34
In 2023, we delivered 280,000 produced pounds into term contracts at an average U 3 O 8 cost per pound sold of $30.99. In 2024, we delivered 570,000 pounds at an average U 3 O 8 cost per pound sold of $64.34.
The 2023 sales consisted of 223,259 produced pounds and 56,741 non-produced pounds. The average cost per produced pound sold in 2023 was $28.04. The pounds had been produced years earlier at a lower average cost per pound when the mine was operating at higher, pre-ramp up, production levels. The previously produced pounds were carried in inventory until sold in 2023. During 2022, we purchased 40,000 pounds at $49.50 per pound, which increased the average cost per non-produced pound to $42.56 when we sold the pounds in 2023.
The 2024 sales consisted of 270,000 produced pounds and 300,000 non-produced pounds. The produced pounds were captured and drummed during the ramp up period at a higher average cost per pound when the mine operated at lower, ramp up, production levels. During 2024, we purchased 300,000 pounds and borrowed 250,000 pounds at an average cost of $75.87 per pound to meet 2024 delivery requirements and to establish a sufficient base inventory position for 2025. We delivered 300,000 of the 550,000 non-produced pounds into a term contract in 2024, leaving 250,000 non-produced pounds in ending inventory available for 2025 delivery requirements, if needed, or to be sold into the spot market if it is advantageous to do so.
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U 3 O 8 Product Profit and Loss
The following table provides information on our U 3 O 8 product profit and loss.
Unit
2023
2024
U 3 O 8 Product Profit (Loss) by Product Type
U 3 O 8 Product Sales
Produced
$000
13,670
16,646
Non-produced
$000
3,658
16,500
$000
17,328
33,146
U 3 O 8 Product Cost
Produced
$000
6,261
13,914
Non-produced
$000
2,415
22,760
$000
8,676
36,674
U 3 O 8 Product Profit (Loss)
Produced
$000
7,409
2,732
Non-produced
$000
1,243
(6,260)
$000
8,652
(3,528)
U 3 O 8 Pounds Sold
Produced
lb
223,259
270,000
Non-produced
lb
56,741
300,000
lb
280,000
570,000
U 3 O 8 Price per Pound Sold
Produced
$/lb
61.23
61.65
Non-produced
$/lb
64.47
55.00
$/lb
61.89
58.15
U 3 O 8 Cost per Pound Sold
Produced
$/lb
28.04
51.53
Non-produced
$/lb
42.56
75.87
$/lb
30.99
64.34
U 3 O 8 Profit (Loss) per Pound Sold
Produced
$/lb
33.19
10.12
Non-produced
$/lb
21.91
(20.87)
$/lb
30.90
(6.19)
U 3 O 8 Profit (Loss) Margin per Pound Sold
Produced
54.2%
16.4%
Non-produced
34.0%
(37.9)%
49.9%
(10.6)%
In 2023, the average price per pound sold was $61.89 and the average cost per pound sold was $30.99, which resulted in an average profit per pound sold of $30.90 and an average profit margin of nearly 50%. As noted above, the average price and cost per pound sold were better than those received and paid in 2024 due to the higher priced DOE sale and lower cost pre-ramp up inventory sold in 2023.
In 2024, the average price per pound sold was $58.15 and the average cost per pound sold was $64.34, which resulted in an average loss per pound sold of $6.19 and an average loss margin of about 11%. The loss was driven by the sale of non-produced pounds, which were
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purchased and borrowed at an average cost of $75.87 per pound. The non-produced pounds were delivered into a sales contract that was executed in 2022 when the long-term price was between $43 and $52 per pound.
U 3 O 8 Production and Ending Inventory
The following table provides information on our production and ending inventory of U 3 O 8 pounds.
Unit
2023
2024
U 3 O 8 Production
Pounds captured
lb
103,487
265,746
Pounds drummed
lb
22,278
249,209
Pounds shipped
lb
—
239,849
Non-produced pounds purchased or borrowed
lb
—
550,000
U 3 O 8 Ending Inventory
Pounds
In-process inventory
lb
82,033
39,169
Plant inventory
lb
22,278
33,919
Conversion inventory - produced
lb
43,790
12,239
Conversion inventory - non-produced
lb
—
250,000
lb
148,101
335,327
Value
In-process inventory
$000
—
42
Plant inventory
$000
1,343
1,840
Conversion inventory - produced
$000
1,228
704
Conversion inventory - non-produced
$000
—
18,158
$000
2,571
20,744
Cost per Pound
In-process inventory
$/lb
—
1.07
Plant inventory
$/lb
60.28
54.25
Conversion inventory:
Ad valorem and severance tax
$/lb
0.59
1.57
Cash cost
$/lb
18.60
46.83
Non-cash cost
$/lb
8.85
9.12
Conversion inventory - produced
$/lb
28.04
57.52
Conversion inventory - non-produced
$/lb
-
72.63
$/lb
28.04
71.93
Wellfield production at Lost Creek resumed in 2023 Q2 and 103,487 pounds were captured during the year. Pounds captured increased to 265,746 pounds in 2024 as mining activities accelerated.
Plant production at Lost Creek resumed in 2023 Q3 and 22,278 pounds U 3 O 8 were drummed during the year. Pounds drummed increased to 249,209 pounds in 2024 as plant activities ramped up.
There were no shipments in 2023. The first shipment was completed on February 27, 2024 when 35,445 pounds were delivered to the conversion facility. Pounds shipped increased to 239,849 pounds in 2024.
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While pounds captured, drummed, and shipped each increased in 2024 as compared to 2023, the increase was below our initial guidance. The ability to secure drill rigs needed to develop our wellfields and recruit a sustainable workforce proved more time consuming than anticipated. Low dryer production also limited our ability to capture pounds within the plant due to uranium storage limitations within the plant.
We currently have 21 drill rigs turning at Lost Creek, which is sufficient to meet our present development requirements and planned 2025 exploration efforts. The Casper construction shop is functioning well and is capable of meeting our current header house development needs. At present, we are essentially fully staffed at Lost Creek. Significant repairs on Dryer #1 were completed in 2024 Q4 allowing us take Dryer #2 down in Q1 2025 for maintenance, which we anticipate will be complete in coming weeks.
We ended the year with 39,169 in-process pounds, 33,919 drummed pounds, and 262,239 pounds at the conversion facility, including 250,000 purchased pounds.
Because production rates were low during the initial ramp up period, the cost per pound to produce inventory exceeded its NRV. The NRV adjustments to produced inventory decreased from $10.7 million in 2023 to $3.5 million in 2024. Total NRV adjustments in 2024, including $2.5 million of non-produced inventory NRV adjustments, were $6.0 million.
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Quarterly U 3 O 8 Product Profit and Loss, and Production, and Ending Inventory
The following two tables provide information on our quarterly U 3 O 8 product profit and loss, production, and ending inventory.
Unit
2024 Q1
2024 Q2
2024 Q3
2024 Q4
2024
U 3 O 8 Product Profit (Loss) by Product Type
U 3 O 8 Product Sales
Produced
$000
—
4,624
6,165
5,857
16,646
Non-produced
$000
—
—
—
16,500
16,500
$000
—
4,624
6,165
22,357
33,146
U 3 O 8 Product Cost
Produced
$000
—
3,127
4,891
5,896
13,914
Non-produced
$000
—
—
—
22,760
22,760
$000
—
3,127
4,891
28,656
36,674
U 3 O 8 Product Profit (Loss)
Produced
$000
—
1,497
1,274
(39)
2,732
Non-produced
$000
—
—
—
(6,260)
(6,260)
$000
—
1,497
1,274
(6,299)
(3,528)
U 3 O 8 Pounds Sold
Produced
lb
—
75,000
100,000
95,000
270,000
Non-produced
lb
—
—
—
300,000
300,000
lb
—
75,000
100,000
395,000
570,000
U 3 O 8 Price per Pound Sold
Produced
$/lb
—
61.65
61.65
61.65
61.65
Non-produced
$/lb
—
—
—
55.00
55.00
$/lb
—
61.65
61.65
56.60
58.15
U 3 O 8 Cost per Pound Sold
Produced
$/lb
—
41.69
48.91
62.06
51.53
Non-produced
$/lb
—
—
—
75.87
75.87
$/lb
—
41.69
48.91
72.55
64.34
U 3 O 8 Profit (Loss) per Pound Sold
Produced
$/lb
—
19.96
12.74
(0.41)
10.12
Non-produced
$/lb
—
—
—
(20.87)
(20.87)
$/lb
—
19.96
12.74
(15.95)
(6.19)
U 3 O 8 Profit (Loss) Margin per Pound Sold
Produced
0.0%
32.4%
20.7%
(0.7)%
16.4%
Non-produced
0.0%
0.0%
0.0%
(37.9)%
(37.9)%
0.0%
32.4%
20.7%
(28.2)%
(10.6)%
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Unit
2024 Q1
2024 Q2
2024 Q3
2024 Q4
2024
U 3 O 8 Production
Pounds captured
lb
38,221
70,679
75,075
81,771
265,746
Pounds drummed
lb
39,229
64,170
71,804
74,006
249,209
Pounds shipped
lb
35,445
70,390
67,488
66,526
239,849
Non-produced pounds purchased or borrowed
lb
—
—
—
550,000
550,000
U 3 O 8 Ending Inventory
Pounds
In-process inventory
lb
80,465
86,204
90,140
39,169
Plant inventory
lb
26,062
21,570
26,580
33,919
Conversion inventory - produced
lb
79,235
74,625
40,713
12,239
Conversion inventory - non-produced
lb
—
—
—
250,000
lb
185,762
182,399
157,433
335,327
Value
In-process inventory
$000
—
447
427
42
Plant inventory
$000
1,593
1,072
1,499
1,840
Conversion inventory - produced
$000
3,105
3,555
2,320
704
Conversion inventory - non-produced
$000
—
—
—
18,158
$000
4,698
5,074
4,246
20,744
Cost per Pound
In-process inventory
$/lb
—
5.19
4.74
1.07
Plant inventory
$/lb
61.12
49.70
56.40
54.25
Conversion inventory:
Ad valorem and severance tax
$/lb
0.53
0.67
1.63
1.57
Cash cost
$/lb
28.47
36.77
45.26
46.83
Non-cash cost
$/lb
10.19
10.20
10.09
9.12
Conversion inventory - produced
$/lb
39.19
47.64
56.98
57.52
Conversion inventory - non-produced
$/lb
—
—
—
72.63
$/lb
39.19
47.64
56.98
71.93
During the year, production increased each quarter ultimately reaching 81,771 pounds captured in 2024 Q4. Similarly, pounds drummed also increased quarter on quarter. During 2024 Q4, we purchased 300,000 pounds and borrowed 250,000 pounds at an average cost of $75.87 per pound to meet 2024 delivery requirements and to establish a sufficient base inventory position for 2025. We delivered 300,000 of the 550,000 non-produced pounds into term contracts in 2024, leaving 250,000 non-produced pounds in ending inventory available for 2025 delivery requirements, if needed.
As discussed above, we continued to ramp up operations in 2024, which generally resulted in increases to our cost per pound amounts during the year, prior to NRV adjustments.
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Year Ended December 31, 2024, Compared to Year Ended December 31, 2023
The following table summarizes the results of operations for the years ended December 31, 2024, and 2023:
(expressed in thousands of U.S. dollars, except per share and non-GAAP per pound data)
Year Ended December 31,
2024
2023
Change
Sales
33,706
17,679
16,027
Cost of sales
(42,679)
(19,365)
(23,314)
Gross loss
(8,973)
(1,686)
(7,287)
Operating costs
(54,116)
(29,156)
(24,960)
Operating loss
(63,089)
(30,842)
(32,247)
Net interest income
3,341
1,471
1,870
Mark to market gain (loss)
6,444
(1,586)
8,030
Foreign exchange gain
80
325
(245)
Other income (loss)
35
(24)
59
Net loss
(53,189)
(30,656)
(22,533)
Foreign currency translation adjustment
471
(547)
1,018
Comprehensive loss
(52,718)
(31,203)
(21,515)
Loss per common share:
Basic
(0.17)
(0.12)
(0.05)
Diluted
(0.17)
(0.12)
(0.05)
U 3 O 8 pounds sold
570,000
280,000
290,000
U 3 O 8 price per pound sold
58.15
61.89
(3.74)
U 3 O 8 cost per pound sold
64.34
30.99
33.35
U 3 O 8 profit (loss) per pound sold
(6.19)
30.90
(37.09)
Sales
Sales per the financial statements includes U 3 O 8 sales and disposal fees. Due to the nature of our contracts, we have a limited number of deliveries, which do not occur consistently during the year. Sales revenues are recognized when the product is transferred to the purchaser.
During 2024, we delivered 570,000 pounds under contracts that were negotiated in prior years at an average price of $58.15 for revenues of $33.1 million. During 2023 we made our first deliveries since 2020. During that year we delivered 280,000 pounds at an average price of $61.89 for revenues of $17.3 million. We also realized revenues from disposal fees of $0.6 million and $0.4 million in 2024 and 2023, respectively, as our customers increased their reclamation activities.
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Cost of Sales
Cost of sales per the financial statements includes U 3 O 8 costs of sales and lower of cost or NRV adjustments and consists of the following:
(expressed in thousands of U.S. dollars)
Year Ended December 31,
Cost of Sales
2024
2023
Change
U 3 O 8 product cost
36,674
8,676
27,998
Lower of cost or NRV adjustments
6,005
10,689
(4,684)
42,679
19,365
23,314
Cost of sales was $42.7 million and $19.4 million for the years ended December 31, 2024, and 2023, respectively. Excluding NRV adjustments, U 3 O 8 product costs were $36.7 million and $8.7 million for the years ended December 31, 2024, and 2023, respectively. In 2024, we sold 270,000 produced pounds with a cost per pound sold of $51.53 and 300,000 non-produced pounds at a cost per pound sold of $75.87, which resulted in total U 3 O 8 product costs of $36.7 million or $64.34 per pound. All sales in 2023 were from pre-existing conversion facility inventories that the Company had in place at the end of 2022. In 2023, we sold 223,259 produced pounds with a cost per pound sold of $28.04 and 56,741 non-produced pounds at a cost per pound sold of $42.56, which resulted in total U 3 O 8 product costs of $8.7 million or $30.99 per pound.
Cost of sales in 2024 and 2023 included $6.0 million and $10.7 million of NRV adjustments, respectively. Because of low production rates, inventory valuations, which include production costs, exceeded the produced inventory’s NRV. As a result, produced inventory values were reduced to the inventory’s NRV, effectively expensing $3.5 million and $10.7 million of production costs to cost of sales in 2024 and 2023, respectively. The $7.2 million decrease in produced inventory NRV adjustments from 2023 to 2024 was attributable to increased production for the respective periods. As plant production increases in 2025, we expect the produced inventory NRV adjustments to continue to decrease and ultimately stop. In addition, we purchased 300,000 pounds of U 3 O 8 in 2024, of which 50,000 pounds were sold in 2024 Q4. Because of decreases in uranium prices, we recognized $2.5 million in non-produced inventory valuation adjustments, which are included in the 2024 $6.0 million total NRV adjustments.
Gross Loss
Gross loss is based on sales, which includes disposal fees, and cost of sales, which includes NRV adjustments. Including NRV adjustments, the gross loss was $9.0 million and $1.7 million for the years ended December 31, 2024, and 2023, respectively. Because of low production in 2024, the Company purchased 300,000 pounds with cash at spot uranium prices and borrowed 250,000 pounds that were valued at spot uranium prices. The non-produced pounds were used to meet a 300,000-pound delivery requirement in 2024 Q4, which resulted in an average U 3 O 8 loss of approximately $20.87 per pound sold and contributed to the larger gross loss in 2024.
Operating Costs
The following table summarizes the operating costs for the years ended December 31, 2024, and 2023:
(expressed in thousands of U.S. dollars)
Year Ended December 31,
Operating Costs
2024
2023
Change
Exploration and evaluation
3,803
2,109
1,694
Development
41,509
20,396
21,113
General and administration
8,044
6,154
1,890
Accretion
760
497
263
54,116
29,156
24,960
Total operating costs increased $25.0 million in 2024. The increase was primarily due to development costs, which increased $21.1 million due to ramp up activities at Lost Creek and initial pre-mining development activity at Shirley Basin.
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Exploration and evaluation expense consists of labor and the associated costs of the exploration, evaluation, and regulatory departments, as well as land holding and exploration costs on properties that have not reached the development or operations stage. The $1.7 million increase in 2024 was primarily due to additional staffing and outside service costs.
The Company is considered an exploration stage issuer and expenses its pre-production development costs. As noted above, these development costs are incurred in advance of production from the related mining areas. Development expense includes costs incurred at the Lost Creek Project not directly attributable to current production activities, including wellfield construction, drilling, and development costs. It also includes costs incurred at the Shirley Basin Project not directly attributable to the construction of the capitalizable assets of the project, including the installation of the wellfield monitor well ring and other development costs. The following table summarizes the development costs included in operating costs for the years ended December 31, 2024 and 2023:
(expressed in thousands of U.S. dollars)
Year Ended December 31,
Development Costs
2024
2023
Change
Lost Creek mine unit development
33,975
15,335
18,640
Lost Creek disposal well development
4,173
4,362
(189)
Shirley Basin mine development
3,274
560
2,714
Other development
87
139
(52)
41,509
20,396
21,113
Development expenses increased approximately $21.1 million in the year ended December 31, 2024. The increases were driven by increased drilling activities and the related wellfield construction costs that relate to the Lost Creek mine unit (“MU”) two development program. Lost Creek disposal well development costs in 2023 and 2024 totaled $8.5 million, of which $7.7 million related to the construction of a new disposal well at Lost Creek. At Shirley Basin, we incurred approximately $3.3 million in development costs in 2024. Development activities at Shirley Basin included drilling costs related to the installation of the first monitor well ring.
General and administration expenses relate to the administration, finance, investor relations, land, and legal functions, and consist principally of personnel, facility, and support costs. The $1.9 million increase in 2024 was primarily related to higher labor costs, stock based compensation costs, and professional fees.
Other Income and Expenses
Net interest income increased from $1.5 million in 2023 to $3.3 million in 2024, reflecting higher interest income received on our cash and cash equivalent accounts and lower interest expense following the payoff of the Company’s state bond loan in April 2024. The higher interest income was driven by a combination of higher interest rates and higher cash balances.
Mark-to-market adjustments include revaluations of the Company’s warrant liability and uranium inventory loan. As a part of the February 2021 and February 2023 underwritten public offerings, we issued warrants that were priced in U.S. dollars. For the year ended December 31, 2024, the warrant liability decreased significantly due to the exercise of 2021 warrants and changes in the factors used in the Black-Scholes calculations of the warrant liability, including decreases in the Company’s stock price and changes in exchange rates. The 2024 warrant liability revaluation resulted in a gain of $5.3 million as compared to a loss of $1.6 million in 2023. During 2024, the Company entered into a uranium inventory loan agreement and borrowed 250,000 pounds. The loan valuation, which is based on average spot uranium prices, decreased $1.1 million in 2024, resulting in a gain.
Earnings (loss) per Common Share
The basic and diluted loss per common share was $0.17 and $0.12 for the years ended December 31, 2024, and 2023, respectively. The diluted loss per common share is equal to the basic loss per common share due to the anti-dilutive effect of all convertible securities in periods of loss.
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Liquidity and Capital Resources
As shown in the Consolidated Statements of Cash Flow, our cash and cash equivalents, and restricted cash and cash equivalents, increased from the December 31, 2023 balance of $68.2 million to $87.1 million as of December 31, 2024. During 2024, we generated $99.9 million from financing activities, and used $71.9 million for operating activities and $9.0 million for investing activities.
Operating activities used $71.9 million in 2024. We sold 570,000 pounds of U 3 O 8 for $33.1 million, however $16.5 million was in trade receivables at year end and was subsequently collected in January 2025. We collected $0.6 million of disposal fees and received $3.7 million of interest income. We had $0.3 million in interest expense and spent $14.5 million on production costs, $24.2 million on uranium purchase costs, and $48.5 million on operating costs, and we posted a $3.8 million deposit related to the uranium inventory loan. We had a $1.5 million unfavorable working capital movement primarily related to increases in leases receivable.
Investing activities used $9.0 million of cash in 2024. We spent $3.6 million on operating equipment at Lost Creek, and $5.4 million on construction and other equipment at Shirley Basin.
Financing activities provided $99.9 million in the year ended December 31, 2024. In July, we closed an equity financing by issuing 65,722,500 shares, including 8,572,500 overallotment shares, at $1.05 per share for net proceeds of $65.2 million. We received net proceeds of $27.8 million from the sale of common shares through our At Market Facility, and $12.4 million from the exercise of warrants and stock options. We spent $5.7 million on the Wyoming bond loan, ultimately paying off the loan in March 2024, and paid $0.1 million in settlement of RSUs redeemed for cash.
Wyoming State Bond Loan
On October 23, 2013, we closed a $34.0 million Sweetwater County, State of Wyoming, Taxable Industrial Development Revenue Bond financing program loan (“State Bond Loan”). The State Bond Loan called for payments of interest at a fixed rate of 5.75% per annum on a quarterly basis, which commenced January 1, 2014. The principal was to be payable in 28 quarterly installments, which commenced January 1, 2015. The State Bond Loan was secured by all the assets of the Lost Creek Project.
On October 1, 2019, the Sweetwater County Commissioners and the State of Wyoming approved an eighteen-month deferral of principal payments beginning October 1, 2019. On October 6, 2020, the State Bond Loan was again modified to defer principal payments for an additional eighteen months. Quarterly principal payments were resumed on October 1, 2022, with the last payment due on October 1, 2024.
On February 29, 2024, we provided notice to Sweetwater County, the State Treasurer and the Trustee of our intention to prepay all remaining amounts on the State Bond Loan on April 1, 2024. The payment was made March 27, 2024, after which the loan was paid in full.
Universal Shelf Registration and At Market Facility
On May 29, 2020, we entered into an At Market Issuance Sales Agreement (the “Sales Agreement”) with B. Riley Securities, Inc. (“B. Riley Securities”), relating to our common shares. On June 7, 2021, we amended and restated the Sales Agreement to include Cantor Fitzgerald & Co. (“Cantor,” and together with B. Riley Securities, the “Agents”) as a co-agent. Under the Sales Agreement, as amended, we may, from time to time, issue and sell common shares at market prices on the NYSE American or other U.S. market through the agents for aggregate sales proceeds of up to $50 million. The Sales Agreement was originally filed in conjunction with a then-active universal shelf registration statement on Form S-3.
On December 17, 2021, we entered into an amendment to the Sales Agreement with the Agents to, among other things, reflect the registration statement on file at the time. In February 2023, in conjunction with our underwritten public offering, we filed a prospectus supplement by which we decreased the amount of common stock offered pursuant to the Amended Sales Agreement.
On June 28, 2023, we filed a new universal shelf registration statement on Form S-3 with the SEC through which we may offer and sell, from time to time, in one or more offerings, at prices and terms to be determined, up to $175 million of our common shares, warrants to purchase our common shares, our senior and subordinated debt securities, and rights to purchase our common shares and/or senior and subordinated debt securities. The registration statement became effective July 19, 2023, for a three-year period.
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On July 19, 2023, we entered into a further amendment to the Amended Sales Agreement (“Amendment No. 2” and hereafter the “Amended Sales Agreement”) with the Agents to, among other things, reflect the new registration statement under which we may sell up to $50 million from time to time through or to the Agents under the Amended Sales Agreement, in addition to amounts previously sold under the Sales Agreement. Subsequently, we filed a new prospectus supplement in June 2024 under which we may sell up to $100 million from time to time through or to the Agents under the Amended Sales Agreement, including the common shares previously sold under the Sales Agreement.
In 2024, we utilized the Amended Sales Agreement for gross proceeds of $28.6 million from sales of 16,939,825 common shares.
2023 Underwritten Public Offering
On February 21, 2023, the Company closed a $46.1 million underwritten public offering of 39,100,000 common shares and accompanying warrants to purchase up to 19,550,000 common shares, at a combined public offering price of $1.18 per common share and accompanying warrant. The gross proceeds to Ur-Energy from this offering were approximately $46.1 million. After fees and expenses of $3.0 million, net proceeds to the Company were approximately $43.1 million. The warrants expire in February 2026.
2024 Underwritten Public Offering
On July 29, 2024, the Company closed an underwritten public offering of 57,150,000 common shares at a price of $1.05 per common share. The Company also granted the underwriters a 30-day option to purchase up to 8,572,500 additional common shares on the same terms. The option was exercised in full. Including the exercised option, the Company issued a total of 65,722,500 common shares. The gross proceeds to the Company from this offering were approximately $69.0 million. After fees and expenses of $3.8 million, net proceeds to the Company were approximately $65.2 million.
Liquidity Outlook
As of April 9, 2025, our unrestricted cash position was $71.8 million.
We have seven multi-year sales contracts in place and realized revenues of $33.1 million from the sale of 570,000 pounds of U 3 O 8 in 2024. We expect to realize revenues of $27.1 million from the sale of 440,000 pounds of uranium in 2025. As of April 9, 2025, we had 368,540 pounds of conversion facility inventory having made three shipments totaling 106,301 pounds to the conversion facility through March 2025. Deliveries into term contracts in 2025 are expected to be made from our existing conversion facility inventory and new production from Lost Creek.
In addition to normal production and operating costs at Lost Creek, we anticipate spending approximately $38.2 million at Shirley Basin on construction, equipment purchases, mine unit development, and initial production costs. We expect that these capital projects will be funded by operating cash flow and cash on hand. We have no immediate plans to issue additional securities or obtain additional funding other than that which may be required due to the uneven nature of cash flows generated from operations.
Looking Ahead
We currently have 21 drill rigs working at Lost Creek, which is sufficient for our present development requirements and our planned exploration programs in 2025, as well as initial deployment of rigs to Shirley Basin. We brought HH 2-12 online in January 2025 and brought HH 2-13 online in March 2025.
At present, we have a full complement of approximately 85 Lost Creek employees. We note that retention has improved in recent months, including within our Lost Creek management group. This has allowed us to better train our staff and place a greater focus on their safety. The Casper shop is functioning well and meeting our present header house development needs for Lost Creek and is in position to meet our development needs at Shirley Basin as we move towards production there.
While we experienced production challenges in 2024, we believe that many of the equipment and process issues are behind us in our ramp-up efforts at Lost Creek. Most recently, we completed significant repairs on Dryer #1 in Q4 2024 which allowed us to take Dryer #2 down in Q1 for maintenance, which is expected to be completed shortly.
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By purchasing and borrowing inventory in Q4 2024, we took proactive measures to meet our 2024 delivery requirements and to establish a sufficient base inventory position for 2025. Subsequent to year end, we reached an agreement to defer delivery of 300,000 pounds U 3 O 8 scheduled for sale in 2025; that delivery will now be made in 2026 H1. As a result of this agreement, we plan to deliver 440,000 pounds U 3 O 8 in 2025 for approximately $27.1 million in sales proceeds.
As we continue to advance Lost Creek to steady-state operations, we believe these steps to increase our inventory position and manage our delivery commitments will best position us to timely meet our 2025 sales commitments, satisfy our physical uranium loan obligations, and position us to substantially increase our production capacity in 2026 and beyond with the addition of Shirley Basin, which we anticipate to occur in early 2026.
Our development and pre-construction efforts at Shirley Basin advanced well during 2024, with adept management of change to best incorporate historical infrastructure while obtaining significant cost savings as compared to new construction. The modular office building for the site is being constructed and is expected to be complete in 2025 Q3. Earthwork at the plant site is in progress with compaction expected to be completed in April to allow concrete work to begin in May. In 2025 Q2, we expect to return to wellfield development work and additional roadwork.
Hiring for Shirley Basin has begun with several key management positions already filled and with the training of several construction staff new hires in progress. We expect to benefit through lateral moves of staff from Lost Creek as well as continuing to train Shirley Basin staff with their counterparts at Lost Creek. Our phased hiring program is anticipated to allow for more thorough safety and task training of staff prior to commencement of operations.
We look forward to the commencement of operations at Shirley Basin, as it will diversify our production sources and further support our efforts to remain a leading U.S. uranium producer. We also anticipate restarting exploration programs to identify additional mineral resources and supplement future production.
As discussed, we have secured multi-year sales agreements with leading nuclear companies, including several which include market-related pricing components. We now have seven agreements that call for combined annual delivery of a base amount of 440,000 to 1,300,000 pounds of U 3 O 8 from 2025 through 2030, with additional deliveries of 100,000 called for in 2032 and 2033. Sales prices are anticipated to be profitable on an all-in production cost basis and escalate annually from initial pricing.
Our cash position as of April 9, 2025, was $71.8 million.
As always, we will focus on maintaining safe and compliant operations.
Outstanding Share Data
As of December 31, 2024, and 2023, the Company’s capital consisted of the following:
Share Data
December 31, 2024
December 31, 2023
Common shares
364,101,038
270,898,900
Shares issuable upon the exercise or redemption of:
Stock options
8,594,492
8,900,335
Restricted share units
1,069,645
641,910
Warrants
19,520,500
27,708,750
393,285,675
308,149,895
Off Balance Sheet Arrangements
We have not entered any material off balance sheet arrangements such as guaranteed contracts, contingent interests in assets transferred to unconsolidated entities, derivative instrument obligations, or with respect to any obligations under a variable interest entity arrangement.
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Financial Instruments and Other Instruments
As of December 31, 2024, and 2023, the Company’s cash and cash equivalents, and restricted cash and cash equivalents are composed of:
(expressed in thousands of U.S. dollars)
Cash and cash equivalents, and restricted cash and cash equivalents
December 31, 2024
December 31, 2023
Cash and cash equivalents
76,055
59,700
Restricted cash and cash equivalents
11,023
8,549
87,078
68,249
Credit risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, and restricted cash and cash equivalents. These assets include Canadian dollar and U.S. dollar denominated certificates of deposit, money market accounts, and demand deposits. These instruments are maintained at financial institutions in Canada and the U.S. Of the amount held on deposit, approximately $0.6 million is covered by the Canada Deposit Insurance Corporation, the Securities Investor Protection Corporation, or the U.S. Federal Deposit Insurance Corporation, leaving approximately $86.4 million at risk on December 31, 2024, should the financial institutions with which these amounts are invested be rendered insolvent. The Company does not consider any of its financial assets to be impaired as of December 31, 2024.
Currency risk
As of December 31, 2024, we maintained a balance of approximately $2.7 million Canadian dollars. The funds will be used to pay Canadian dollar expenses and are considered to be a low currency risk to the Company.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. As of December 31, 2024, the Company’s current financial liabilities consisted of accounts payable and accrued liabilities of $4.5 million, the current portion of leases payable of $0.3 million and the repayment of the inventory loan currently valued at $18.2 million. As of December 31, 2024, we had $76.1 million of cash and cash equivalents, $16.5 million in accounts receivable and $20.7 million in inventory.
Interest rate risk
The Company has completed a sensitivity analysis to estimate the impact that a change in interest rates would have on the net loss and considers the change to be a low interest rate risk to the Company.