enCore Energy Corp. (TSX-V:EU, OTCQB:ENCUF) said it has secured a uranium purchase sales agreement with a US-based nuclear power company, following a recent site visit to enCore’s Texas operations.
enCore said the deal supports its business strategy of building in-situ recovery (ISR) production in the US at its South Texas uranium processing facility.
The uranium sales agreement, the third such deal executed by enCore, is a multi-year agreement commencing in 2025, which covers up to 600,000 pounds of U3O8 based on market pricing with a floor price that assures production costs are met. The agreement includes an inflation-adjusted ceiling price higher than the current uranium spot market pricing providing the US nuclear power plant assurance of cost certainty.
“With the supply chain disruptions for nuclear fuel resulting from serious geopolitical events, US utilities need domestic supply to achieve greater certainty of supply,” Paul Goranson, CEO of enCore Energy said in a statement.
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“We truly appreciate the opportunity to produce domestically sourced uranium and provide the US with a clean and reliable energy source. This agreement supports the company’s strategy to grow its production pipeline of ISR projects throughout the US," added Goranson.
"enCore is committed to a balanced portfolio of sales contracts with a portion of its production in defined agreements to ensure stability of operations while retaining a significant portion of production set aside to ensure participation in the upside of a rising spot market. We are also very aware of rising inflationary pressures, so we are putting key expenditures behind us when they are more affordable," the enCore CEO concluded.
enCore Energy said the refurbishment of its Rosita plant in Texas, which is a licensed, past-producing ISR uranium plant, is on schedule for completion at the end of Q2/2022 and on budget to meet a 2023 production target.
The plant is designed to process uranium feed from multiple satellite operations, all located in the South Texas area and is one of the 11 licensed uranium processing plants in the US, two of which are owned by enCore Energy.
Contact the author at jon.hopkins@proactiveinvestors.com