(EU) enCore Energy Provides 2023 Year End Letter

22 Dec 2023

“We end the year with one of our most significant milestones, the restart of uranium production at the Rosita CPP, accomplished 20 months after its renovation commenced. Production at the Rosita CPP marks the first production in Texas in over a decade. We then wrapped up the year with the announcement of our US$70 million transaction for a 70/30 joint venture (“JV”) on the Alta Mesa ISR Uranium Project and CPP with Boss Energy Ltd. (“Boss”). The arrangement with Boss as a 30% minority partner on only one of our production assets allows us to use the proceeds of $60 million US to aggressively advance project timelines across the Company.”

“Since 2021, enCore has entered into four uranium sales agreements with the most recent announced in February 2023. We continue to see utilities in the United States looking to domestic uranium producers as a means to mitigate the supply chain risks resulting from continuing geopolitical uncertainty. Because of our demonstrated results, strong management team, and multiple production sources with minimal permitting risk, we are considered a “go to” supplier as nuclear utilities navigate the changing uranium market. enCore is committed to building 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 also delivered our first uranium into one of the uranium sales agreements. This delivery of 200,000 pounds U3O8 represents the first portion of the annual deliveries into the 5-year agreement that covers 2 million pounds of uranium with significant delivery flexibility for market related pricing. We successfully acquired uranium under favorable pricing terms in 2022 from a third party and delivered it into this agreement in 2023 using current spot market pricing indicators to establish the sales price well above our purchase price.”

https://ceo.ca/@newswire/encore-energy-provides-2023-year-end-letter

I Robot… a classic…

Sean is a sharp guy… and a hoot…

One observation when we talk with folks about the Uranium stocks off-mic or in interviews, is that almost everyone points to just how well Cameco has done, and keep saying it’s outperformed the other uranium stocks and has lead the rally. (??)

While CCJ has absolutely done well, and essentially doubled off the March 2023 lows in the intermediate term (which is fantastic)… Do people just not realize that yeah, but so did a huge swath of the other U stocks?

Even the ETFs URNM and URNJ have almost doubled off their March 2023 lows, and they are diversified baskets of 30-40 uranium stocks. For example, every other stock on that candleglance chart linked above (with the exception of Energy Fuels) has also essentially doubled or more off their lows last year. Even UUUU did make a huge break higher, but it peaked earlier than most other uranium equities and then pulled back more to consolidate in a channel. It had really run big in prior years though, and outperformed the pack during other key rally periods, so maybe it was just more richly valued sooner and then found gravity after the fact.

So while much fanfare has been made about Cameco’s move…. and it sure deserves some fanfare because it is a larger cap senior producer, that has been moving like a junior in pricing gains…. What we’ve seen in it has simply been par for the course in uranium equities. What it really comes down to is awareness, and the reality that most investors did not have a basket of uranium stocks the last few years, or they’d have been much more clued in to the big moves the sector has been having since the March 2020 pandemic crash, and a more durable longer-term rally (that of course had corrective periods… but a larger uptrend pattern has ensued for years now).

The point is that this move in Uranium equities hasn’t been isolated to or even lead by Cameco… which is sometimes the impression a number of folks give me when they talk about the sector. (not Sean in this interview… because he was flagging Cameco for different reasons and made a great point about them cutting output and then going up in share price as the commodity supply got even tighter).

I think there are just a lot of folks that don’t really follow the uranium equities or even the ETFs like URNM or URNJ, and just see it all through the eyes of Cameco, because that’s the only stock they’ve heard of or follow in the sector. This can be misleading as there were plenty of other prior multi-month rallies for many years, that saw the smaller and medium U-stocks dramatically outperform Cameco (to the upside and downside).

Viewing everything through the Cameco lens is more akin to seeing the whole gold equities space through the prism of price moves in Newmont or Barrick (which is a myopic and at times flawed approach) When looking at the very largest seniors and sector leaders price action, sure it may generally correlate with the biggest trends, but using them as one’s sole barometer is not always reflection of what we have been seeing across the market depth of other gold producers… over periods of serious rallies or declines…. especially in the small and medium-sized producers, (much less the developers or explorers).

It’s like when so many silver investor were viewing the health of the silver equites the last 2 years strictly by extrapolating out First Majestic to the whole silver stock arena. That was flawed thinking or sentiment, because AG greatly underperformed most of the silver stocks for legitimate fundamental reasons and concerns (labor strikes, Mexican tax issues, buying a gold mine in Nevada Jerritt Canyon and then failing to execute anywhere close to plan).

The point is that any investors in the uranium stocks could have almost been a dart-thrower, versus a stock picker as far as grabbing any number of legit U-stock positions, and still seen moves every bit as epic at Cameco’s journey, and often times with more torque.

Anyone that spent just a little time researching the sector over the last 4 years and positioning a combination of the 2 dozen or so genuine development-stage, advanced explorers, or near-term producers or small producers within the Uranium stocks could have had multi-bagger returns.

Heck, even those positioning into last years spring correction from let’s say anywhere from late Feb – early May (even if they didn’t nail the exact bottom) could have gotten positioned and at least seen a 50%-100% gain in their U-stocks over the last year. There was such a margin for success, that even just positioning anywhere from mid 2022 to mid 2023 would have still generated some nice double-digit profits, in an otherwise tough resource sector that hasn’t been giving up many other gains during that same time period.

This is the value in having a diversified portfolio to different commodities and stages of mining stocks. We saw a similar pattern play out in Lithium from 2020 to 2021-2022, or copper stocks in early 2021 or 2022, or palladium stocks during that same time period. Or look at the blistering rally seen in Oil and Nat Gas stocks from 2020 into mid 2022.

We’ve said on here for years that commodities are like a game of Whack-A-Mole and that one pops and drops, then another pops and drops, and then another… and so on. Most of the time for decades now the cyclical commodities and even more so in the volatile resource stocks, are trades… that have their season in the sun…. and not buy and hold forever stocks being held for decades like one would blue chip stocks on the DOW or the largest S&P or Nasdaq stocks.

Look people should know that I love the precious metals equities, and am very overweight to them at present and have been for well over a year now. Having said that, there have clearly been a number of other rallies in the resource stocks in other commodities that have presented fantastic opportunities for the last few years (copper, palladium, oil, lithium, uranium). I was in those trends as well, because it was clear those markets had their own unique fundamentals and their own unique technical breakouts and momentum.

Not having diversification in one’s portfolio, or strictly camping out in the vast majority of PM stocks that whole time, over the last few years, was not an ideal plan. There is so much more to the resource stock universe than just what happens in gold stocks, and yet for some folks that is the only game they ever play. Luckily for all PM investors, 2024 and 2025 are likely going to be years where the gold and silver stocks finally get their moment in the sun.

There is usually no change from the “opening algo”, so done for today and going to take the dog to the Vet for his annual check-up. Might as well do something productive.

If only you knew how important this weakness is. I said last Thursday that I hope the miners go lower into this week and it’s for very good reason. If everything had just kept on rising after Friday’s pop you would’ve been happy but the upside in that situation would’ve been a fraction of what is setting up now. This week has gone perfectly so far and we stand to gain a bull market for the record books if it continues. Yes it’s all about this week. This isn’t random in the slightest. Instead of the typical “intermediate” move delivering 40-50 percent gains we are now looking at fireworks lasting many months to a year. But the week’s not over. To avoid jinxing the setup I’m not going to say what we need from the miners tomorrow or the next day.
If the banksters caused this timely weakness then I thank them.

The question is and has been, “How long are the citizens going to allow theft of the US Treasury without their Legal Regulators doing anything.” The follow on question is “How long are the citizens going to allow their Political Representatives to do nothing about the Criminal Acts of their peers, associates and The Fed and Corporate cronies”. There is no party or candidate that represents the people by highlighting the thefts, bought public officials, misuse of government funds, extortion, collusion, conspiracy, Citizens United, banking regulations, Accounting changes, lack of audit, protected elite, too big to fail …nothing. Just silence … and the people just keep falling for diversions, hate, bigotry, religious fervor, and all the ink that muddies the water to cover the on-going thefts and destruction of the country economically. As criminals always say “Some other Dude did it” We know who the Criminals are and the country is lost if prosecution is ignored at all costs. Start with audit of the Federal Reserve, Wall Street Banks and the Exchange Stabilization Funds and you will find so many “defendants” you will need a task force from every state to handle all the trials.

Eye Popping…………………………. I bet the debt goes another $50 TRILLION…..

I see that Sir…..Nice work…..Also,I have seen your charts and they are significant and to the point…..

i like to use slow stochastic on the say 60 and 120 ect …charts as a trigger out of an oversold situation…With /NG and /GC as you know, those signals occur near days end before the next day big pop and run…I only use a small position on those and add quicly in the first 30 minutes if the pop occurs….GDXU will still earn you 8 or 10% of the total 13 to 16% pop…For a guy like me….Actually holding through a real long run will be tough…GLTA plus Ex….

Gold smile………. 🙂 INDIA …. is on the rise….

Ditto DT……….. I read , where someone was replacing a battery for $60,000… and the car was valued at $60,000…. insurance totaled …
One big scam on the sheeple….

It’s funny how you are always talking about corruption in The Banks, The Fed, and on Wall Street but you miss the biggie which is the military industrial complex and the endless foreign Wars that have drained your country’s treasury more than all the rest you mention combined. What did Afghanistan cost $2.3 Trillion and that is only one of many. Now The US is funding two wars at the same time in different parts of The World not to mention the endless incursions with one country after another going on simultaneously for almost 80 years since the end of World War 11. DT

Like I told Lakedweller above, you have no idea (clearly zip/zero/none) how important this action has been.