Impact: Positive
UR-Energy announced that it has decided to build out its fully permitted Shirley Basin uranium ISR project in Wyoming. This will be the second operational project for the company after its flagship Lost Creek ISR mine. Shirley Basin hosts Measured and Indicated resources containing 8.8M lbs U3O8, of which 6.4M lbs is expected to be recovered over a nine-year operation with an after-tax NPV8% of US$83.2M and IRR of 69%, as per the recently released PEA (read notable). For this, the company plans to design a satellite plant which can produce up to 1M lbs of U3O8 per year. The ion exchange resin produced at the satellite plant is planned to be shipped for processing at it’s Lost Creek. We believe this is a positive update as the operation at Shirley Basin is expected to increase UR-Energy’s production capacity to 2.2M lbs per year. The company already has five offtake agreements that call for a combined annual delivery ranging from 550k to 1.1M lbs over six years beginning in 2025. This new capacity addition provides UR-Energy with the optionality to deliver some of its production at higher spot prices, although we believe management will prefer to sign additional contracts to have all uranium production deliveries covered.