(enCore Energy, 4.Nov.2024) — enCore Energy Corp., a uranium producer, revealed the company’s contracting strategy and 5 year forward outlook regarding its uranium sales agreements.
As of 31 Oct. 2024, the company has executed seven (7) contracts to supply uranium to nuclear power plants in the US and holds one (1) legacy contract with a uranium trading company. enCore’ outlook represents annual contracted sales only. This contracting strategy provides enCore with significant exposure to future spot uranium prices on a percentage of its future planned production. The company’s contracting strategy has achieved the objective of establishing a base level of revenue while retaining significant exposure to upside price action.
The contracting strategy provides a balance of multiple customers using a blend of base escalated, un-hedged spot and collared contracts (spot related with floor prices and ceiling prices). While strict confidentiality clauses prevent the exact nature of each contract, the table below provides guidance as to:
- Annual total contracted delivery quantities, including firm and optional deliveries;
- Estimated contracted sales revenue including sensitivities to spot price volatility.
The projections assume that all uranium delivery flexibilities and optional contract extensions are fully utilized by the customer using current pricing of uranium without inflation adjustment. The estimated revenue does not include inflation-adjustments to price collars, base escalated prices, nor fees associated with deliveries.
This forecast is limited to contracted quantities only and do not include non-contracted produced uranium that could be sold into the spot market for any given year, and thus the table below only reflects a portion of expected total revenue. Annual revenues are shown in aggregate quantities, and actual deliveries will happen throughout a given year according to customer timing, and as a result, the actual deliveries will vary significantly on a quarterly basis in any given year.
The company intends to provide updates to the contracting strategy and the 5-year forward-looking revenue projection in the 4th quarter of each year providing transparency and notes that this is not intended to account for the company’s total production or revenue for any given year.
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