Uranium Energy Corp.

Good day and welcome to the Uranium Energy Corp.'s Fiscal 2026 Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Amir Adnani, Uranium Energy Corp.'s founder and CEO. Please go ahead.

Thank you, operator, and good morning, everyone. A presentation accompanying today's call is available on our website. Some of the commentary today will include forward-looking statements, and I would encourage everyone to review the cautionary language on slide two of the presentation. In addition, during today's call, we will be discussing certain non-GAAP financial measures. Please refer to our presentation for additional information. With that, let's begin with the highlights of a transformational year for UEC. Twelve months ago, we produced uranium from only one mine in one state. Today, we produce from two mines in two states and are well underway in building a third Fiscal 2026 established UEC as a multi-mine American uranium producer. Just as important, in a single year we demonstrated that we can grow our operating team, which now stands at more than 250 people, double our drill rig count to 40, and continue to build and commission new mines all while executing a differentiated strategy of vertical integration from mining through refining and conversion. I want to take a moment to recognize our people. Behind every number you will hear today are teams in Wyoming and Texas who hired and trained new operators, built and brought new header houses online, recommissioned the Hobson plant, and started up Bercolo, the largest new in-situ recovery uranium mine to come online in the United States in over a decade, and one that began as our own discovery. This is what rebuilding America's uranium industry looks like. Skilled, well-paying jobs in the rural communities where we operate. To our team and to those communities, thank you. On our last call, we said new header houses would lift production and that the rise in cost per pound seen in the third quarter was temporary. This proved true as we delivered. Thank you for joining us. The foundation of our competitive advantage includes the largest uranium resource base in the United States, arguably the largest ever assembled in this country, combined with 753 million in liquid assets and no debt. Fiscal 2026 was the year we built the platform. Fiscal 2027 is the year we start to scale it with an unparalleled combination of workforce, drill rigs, in-ground resources, and balance sheet strength. Returning to operations, combined, Christensen Ranch and Bercolo produced nearly 83,000 pounds of precipitated uranium and dried and drummed U-308 in the fourth quarter, up 157% from the third quarter at a cash cost of about $30 per pound and a total cost of about $36.50 per pound. At Christensen Ranch, production doubled to more than 65,000 pounds as the three new header houses in Wellfield 11 ran for a full quarter. Cash costs fell to about $28 per pound and total costs to about $36 per pound, a 35% reduction in total cost per pound in a single quarter as higher volumes moved through the same plant. At Burke Hollow, our first full quarter delivered more than 17,000 pounds at a cash cost of about $36 per pound and a total cost of just under $40 per pound. This first phase was limited to a small section of the first production area to establish a playbook of key operating parameters ahead of expansion across the full wellfield. For the full fiscal year, our first full year of production, we produced more than 229,000 pounds at a cash cost of about 34 and a total cost of $39.94 per pound. Since commissioning, we have produced about 359,000 pounds. These production numbers are precipitated uranium and dried and drummed U-308. Beyond Christensen Ranch and Bercolo, our development pipeline advanced on every front, which I will cover shortly. On the financial side, our unhedged strategy has not changed. In a market facing a structural supply deficit, we seek to maintain exposure to pricing upside for our shareholders, rather than lock it into contracts signed at legacy prices. This year, we sold 400,000 pounds at a weighted average realized price of $93.13 per pound, which we believe is the highest among publicly traded uranium producers, generating revenue of $37.3 million and gross profit of $16.9 million. That revenue reflects a deliberate choice. We ended the year holding 1.26 million pounds of uranium in inventory, worth about $109 million at current market prices, nearly three times this year's revenue, plus the roughly 359,000 pounds produced and held at our Erigarian Hobson plants. We could have sold far more, and we chose not to. Our strategy is to hold inventory into a tightening market and sell into strength for the benefit of our shareholders. Our balance sheet is what gives us the relatively unique luxury of having that choice. We have $753 million in liquid assets, including $495 million in cash and no debt. We are never a for-seller. Turning to the tightening U.S. market, several forces are converging as we head into next year. At the end of 2027, the waivers under the U.S. ban on Russian uranium imports expire, and the ban takes full effect. The United States is now in a race to stand up domestic mining, conversion, and enrichment capacity. and new enrichment capacity only works with a reliable supply of U-308 and UF-6 behind it. At the same time, the U.S. government's own requirements are growing. The U.S. Department of Energy, through the National Nuclear Security Administration, issued a request for information on domestic capability to supply unobligated U.S.-origin uranium and conversion services through the 2040s. four million pounds of U-308 and 1,500 metric tons of uranium as UF6 each year, with delivery starting as soon as 2030. And in August, the U.S. Army selected five developers to build nuclear micro-reactors at military installations, with more than 20 expected under its Janus program, all requiring unobligated U.S.-origin uranium and conversion services. Those needs cannot be met from allied nations. Unobligated supply can only come from U.S. sources, U.S. mines, U.S. technology, and U.S. conversion. And conversion is arguably the biggest bottleneck in the entire nuclear fuel supply chain. In our response to the National Nuclear Security Administration, we made it clear that UEC is positioned to fully support its uranium requirements as our production in Texas and Wyoming ramps up and through our refining and conversion subsidiary to provide the conversion services it needs. No other company in the United States is building a solution from the mine through conversion. These demand signals confirm why we are building United States Uranium Refining and Conversion Corp., extending UEC beyond mining into the next stage of the fuel cycle. This year, working with our engineering partner, Fluor, URNC finalized this regulatory engagement strategy and began preparing its license application to the Nuclear Regulatory Commission. We are advancing toward a class four cost estimate, which we expect to be ready in mid 2027. Site selection continues to move forward. Behind this progress is a team that has grown to 63 individuals in less than a year, comprised of process engineers, chemists, nuclear fuel specialists, construction professionals, and other subject matter experts. There is currently only one operating conversion facility in the United States. It was built in the 1950s. Building the next one is a once-in-a-generation project, and you can feel the passion our team brings to it. URNC will be U.S. technology so that its output can qualify as unobligated U.S. origin supply for the U.S. government. To protect that, URNC has put a technology control plan in place for export-controlled information, and our team has completed comprehensive training in this regard. Turning to our uranium assets, our current operating platform is built on two production hubs in Wyoming and South Texas, each with a central processing plant fed by satellite mines. This is supported by two major development projects we are advancing, the Sweetwater Hub in Wyoming and Rough Rider in Saskatchewan. At Christensen Ranch, the Wellfield 11 header houses performed as expected. As previously reported, Three new header houses in Wellfield 11 began production late in the third fiscal quarter. Four additional header houses were constructed and tested as of the end of the fourth fiscal quarter, bringing the total to five that were awaiting regulatory approval for startup at such time. Just yesterday afternoon, we received final approval for four of these. Our team expects to start production at these header houses in the coming weeks. At Lutemann, our next mine feeding area, wells for the first well field are being installed and tested for mechanical integrity. Engineering for the satellite ion exchange plant is advancing. We have ordered long lead time equipment, completed the plant pad engineering, and selected our construction contractor. The power line route is set with surveys expected to be completed in the first quarter of fiscal 2027. In South Texas, the first shipment of uranium-loaded resin from Bercolo arrived at our Hobson plant in mid-May. Every step at Hobson from elution through precipitation, drying, and packaging is now commissioned. And Hobson is once again an operating central processing plant. At the wellfield, 126 injection and recovery wells were brought online. We're utilizing the small section to establish our best operating parameters from lexivian chemistry and pump sizing to wellfield patterns. Those parameters will guide the next phase as we expand mining in the first production area. Sweetwater will be our third production hub with a mill that gives us the flexibility to process both conventional or and in-situ recovery production. Federal permitting continues to advance. The FAS 41 permitting dashboard targets completion of the environmental assessment in March 2027 and approval of the plan of operations in May 2027. And our environmental baseline studies are largely complete. Drilling at street water north has been very encouraging, with results confirming mineralization trends that support continued delineation. Based on this success, we're planning additional drilling in the first quarter of fiscal 2027. to further extend the mineralization identified in the initial program and to advance wellfield design for our first two production areas. With our partner Wood Group, work continues on installing the ion exchange and elution systems for in-situ recovery operations. In Saskatchewan's Athabasca Basin, home to the highest grade conventional uranium mines in the world, Rough Rider continues to advance. We completed a 36,000-meter drill program to upgrade our resources in support of our planned pre-feasibility study. In August, we signed the definition study agreement with Saskatchewan Power Corporation for a high-voltage transmission line to the mine, a key step in de-risking our project. UEC is committed to become America's national champion for the front end of the fuel cycle. Our competitive advantage is one that cannot be copied. The largest uranium resource base in the country with multiple mines and production platforms. The fuel cycle starts with uranium. And that is where we also begin in our development and growth strategy aimed at establishing America's only vertically integrated uranium company. With that foundation, our team of professionals, and a clear path from mining through conversion, UEC has never been better positioned. Before we turn to questions, I would like to note that I'm joined today by Josephine Man, our Chief Financial Officer, Scott Melbye, our Executive Vice President, and Brent Berg, our Senior Vice President of U.S. Operations. Operator, please open the line for questions.

We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. Our first question comes from Brian Lee with Goldman Sachs. Please go ahead.