Ur-Energy Inc. (URG) on Q2 2023 Results - Earnings Call Transcript
Operator: Greetings. Welcome to Ur-Energy Inc. Second Quarter Earnings and Company Update Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Ms. Penne Goplerud. You may begin.
Penne Goplerud: Thank you for joining us for our teleconference and webcast this afternoon. We are required to draw the attention of all of our participants to the legal disclaimers contained in this afternoon's slide presentation, which apply equally to our oral presentation today. At slide two, you will find legal disclaimers with regard to forward-looking statements, risk factors and projections, as well as other cautionary notes to investors. We ask that you read and consider these disclaimers carefully before investing in our shares. As well, risk factors inherent in forward-looking statements and projections are set forth and discussed in the company's annual report on Form 10-K, filed on March 6, 2023, with the U.S. Securities and Exchange on EDGAR and with the Securities Regulatory Authorities in Canada on SEDAR. I would now like to introduce and turn the webcast presentation over to our Chairman and CEO, John Cash.
John Cash: Good afternoon, everyone, and welcome to Ur-Energy’s second quarter 2023 earnings call. It has been an exciting quarter for the company, as we have successfully initiated ramp up in our second mine unit at Lost Creek and as demand for nuclear fuel and global geopolitical uncertainty continue to support the uranium price. We have revamped our corporate presentation for the purposes of this call to focus more on our finances and geopolitical risk. I hope you find it informative and useful. The photos here are of the ion exchange portion of Lost Creek plant and the first shipment of yellowcake in the fall of 2013. We expect to get back to shipping uranium this fall. We encourage participants to review the disclaimer presented here and our filings, so you are aware of the risks associated with investing in the uranium industry and uranium mining in general and our projects. UR-Energy has two flagship properties that are our primary focus: Lost Creek is our first operating in-situ mine and is in South Central Wyoming. Shirley Basin is our second plant in-situ mine also in Wyoming, that is fully licensed and construction ready. Lost Creek has been in operation now for almost exactly 10-years, and has produced approximately 2.7 million pounds of U308 through 2022. As previously announced, we have been ramping up production again with commercial operations beginning in Header House 2-4 in May of this year. Ramp-up continues to progress and we have now established good head grade and flow from the first house. We intend to bring Header House 2-5 online this fall, followed by additional houses through the end of this year. The resource at Lost Creek is 11.9 million pounds of measured and indicated resource and 6.6 million pounds of inferred resource. As many of you are aware, Lost Creek has a well-deserved reputation for being a low-cost producer, and we believe as we work our way through ramp-up to commercial production that we will return to low cost. I will talk more about production costs later. Lost Creek has a 14-year mine life with significant opportunity for exploration. We are aware of numerous roll fronts that have not yet been explored. The Lost Creek mine is licensed and constructed to produce at a rate of 1.2 million pounds per year, while the processing plant is licensed and constructed to produce 2.2 million pounds per year. The delta between these two figures was intentional because we have always planned on expanding operations through additional mines or processing for competitors. It is our intent to bring loaded resin from the Shirley Basin mine once it is constructed to process at Lost Creek, so we don't need to build out a full processing plant. This will provide us significant capital savings. Our next plan project is Shirley Basin, which has all the licenses and permits for construction and operating in place. The Shirley Basin mine is licensed at 1 million pounds per year and the plant is licensed at 2 million pounds per year. However, as mentioned, we don't intend to build out a full plant. Instead, our intent is to build out a satellite facility and ship the resin to Lost Creek for processing. This will allow us to build out much more quickly and with significantly less capital. The resource at Shirley Basin is 8.8 million pounds of measured and indicated resource at a grade of 0.23 weight percent. Given dense historic drilling, there are no inferred pounds. Unlike Lost Creek, there is little opportunity for expansion within our existing footprint at Shirley Basin because the mineralized body has been completely and thoroughly drilled. We don't see this necessarily as a disadvantage. We view this as a cost savings since we won't need to expend funds for exploration and little delineation drilling is required. This allows us to go straight into production. In fact, we have already planned every mining pattern Header House, road and power line for the property based on existing drilling data. Interestingly, we believe Shirley Basin was the first commercial scale in-situ uranium mine in the world. In 1963, the owner ran an experimental in-situ mine and was able to recover well over 1 million pounds of uranium. We have all the records from the test work, and we'll rely on that data to assist in design of the facility. The decision to build out and operate Shirley Basin will be predicated on signing long-term contracts that derisk the capital expenditure. When sufficient contracts are in place, we believe we can build out the facility and have it in commercial operations within 24-months. We are very aware of supply chain limitations, and our first step will be to identify long lead items and get them ordered. We expect that this will include electrical equipment, such as transformers and motor control centers and other industrial instrumentation such as flow meters. We previously announced the completion of our Casper combined services facility, which is adjacent to our company-owned office. I'm happy to report that we have started building header houses in town, which will reduce travel time to and from the mine site, which will in turn improve safety, reduce emissions and fuel cost. These slides show the external and internal of Header House 2-6, which is slated for production this fall. For those of you with a keen eye, you may notice that we have changed the style of flow meters to a dramatically smaller system that is also much easier to wire in. Let's talk about the broader nuclear space, including supply and demand fundamentals and geopolitical risk. The demand for nuclear fuel is expected to grow significantly over the coming decades as more countries are moving to nuclear power for its carbon-free attributes and for energy independence. The U.S. gets about 20% of our electricity and 50% of our carbon-free electricity from nuclear power. Southern Company just brought Vogtle Unit 3 in the commercial operation, and Unit 4 is expected to come online late this year or early next. Beyond that, as a result of the Inflation Reduction Act, many utilities are seeking reactor life extensions power uprates and extended time between fueling outages in order to generate more electricity. California's Governor Newsom is advocating for Diablo Canyon to extend its operation and in an unprecedented move, there is serious consideration of bringing the Palisades reactor in Michigan back online. Globally, the number of reactors on order and proposed is growing at a fast rate. There is also a move to design and construct small modular reactors with the idea that construction costs can be reduced by factory building small reactors. Several companies around the world, including NuScale, Rolls-Royce and Terra Power have jumped into the fray. Of particular interest to Wyoming Heights, Bill Gates Company, TerraPower and GE Hitachi Nuclear Energy launched the Natrium SMR project with involvement by Berkshire Hathaway Pacific Corp. They have announced plans for their first unit to be installed near Kemmerer, Wyoming adjacent to an existing coal-fired plant that is slated for shutdown. In a recent poll, the Nuclear Energy Institute found that their members expect to have approximately 300 small modular reactors operating in the U.S. by 2050. For context, their members include some very serious utilities such as Duke, Southern Company in Constellation. This may seem a bit optimistic. But even if just a fraction of these small reactors are realized, the additional demand for uranium will be material. TerraPower just announced their plans to build dozens of SMRs in England. Globally, acceptance of nuclear power is growing at an unprecedented rate. China is certainly the elephant in the room with stated plans to construct 150 reactors within the next 15 years. China alone could be responsible for growing the current reactor fleet from 436 to 585. China currently has 24 reactors under construction, and they just approved the siding of 6 more units. I won't read through this slide, but suffice it to say that numerous countries are making strong moves toward nuclear power. The initial move toward nuclear power was based on a desire to reduce emissions. But post invasion of Ukraine, many countries are moving toward nuclear for the energy security in uncertain times. Support for nuclear power is growing in the U.S. as an increasing number of environmental groups such as the Nature Conservancy, Climate Coalition, ClearPath and many others throw their support behind the nuclear power. Support for nuclear power is also growing in the U.S. Congress as both parties in rare bipartisan alignment are pushing nuclear legislation to grow the nuclear utility fleet for environmental, energy independence and national security reasons. For example, Congress has already passed a bill establishing the U.S. uranium reserve and funded it at $75 million. The DOE was charged with establishing this program. And in December of last year, issued Ur-Energy a contract for 100,000 pounds of uranium at a price of $64.47 a pound. Also of great importance to the industry is the passage of the civil nuclear credit program and the inflation Reduction Act, which together have breathed new life into the industry. This is perhaps the most significant legislation impacting the nuclear industry ever. Looking at pending legislation, two of our most staunch supporters are Senator Barrasso, a Republican from Wyoming and Senator Manchin, a Democrat from West Virginia. Just a few days ago, Senators Barrasso and Manchin introduced the Nuclear Fuel Security Act as part of the National Defense Authorization Act, or the NDAA. The Senate passed the bill by a vote of 96 to 3 in a strong indication of rare bipartisan support. The bill is designed to expedite domestic production of HALEU merge the U.S. uranium and American Assured Fuel Supply and encourage domestic production of uranium. The bill still needs to work its way through the house and across the President's desk. There is also pending legislation to cut off low enriched uranium imports from Russia. We expect this bill to be considered this fall. While nearly everyone agrees it's a bad idea to be supporting Russia by purchasing nuclear fuel from them, there is concern that Western suppliers will be unable to build the gap created by sanctions. So it is unclear if this legislation will pass. The White House has also provided great support for the nuclear power industry and believes it will be difficult to reach our carbon emission goals without this critical baseload source of power. It is impossible to having meaningful discussion about uranium supply and demand without touching on geopolitics. While Russia doesn't mind much uranium, they dominate global processing in the form of conversion and enrichment. About 46% of primary supply is mined in Kazakhstan, a former Soviet State, but still has close ties with Russia. In fact, Russia has partial ownership of some of the largest uranium mines in Kazakhstan. As the next slide will show the Western world has limited ability to replace Russia's processing or Kazakhstan's mine supplies. This is why the U.S. and European countries have been unwilling to-date to sanction low-enriched uranium coming from Russia. To better quantify the supply risk, I performed an unscientific review of uranium company websites and the World Nuclear Association's Online database. This table summarizes my findings. There are only 15 countries in the world that produce uranium. And of those, most production comes from the top seven or eight countries. About 76% of mine production is controlled by state-owned enterprises such as Arano, Kazatomprom and Rose Adam. Unfortunately, a large percentage of production comes from countries that are aligned with the East instead of the West, which significantly adds to supply chain risk. The second table on the slide attempts to show the percentage of production that is Eastern versus Western aligned. These are simply my estimates from an optimistic and pessimistic view. I am not a geopolitical scientist, so I encourage you to run the numbers based on your own knowledge. Of important note to uranium investors, in my opinion, we have only one peer in the uranium mining space, and that is Cameco. I am unaware of any other publicly traded companies with significant exposure to uranium prices that are currently mining uranium at a commercial level. I'm excluding Kazatomprom because only 15% of their shares are publicly traded and BHP, because of their relative exposure to uranium, via mining at Olympic Dam is minimal compared to the value they realize from other commodities. Of course, this conclusion may change soon if other companies initiate production. By my estimates, again, based on an unscientific analysis, there are about 12 potentially serious companies who have announced plans to begin mining uranium within the next five years. Of those 12, perhaps three have projects of the scale, technical certainty, in jurisdictions necessary to succeed. The other nine will likely face significant challenges due to the known technical problems, economics, local opposition and/or scale. Some of these nine may succeed, but their path is difficult. The point to take away is that uranium mining is hard, and the Western world will have a hard time responding in a timely manner to a supply crunch. For even the most advanced in-situ projects that have been mothballed, it will likely take about a year to have salable company mine pounds in their inventory, because they will need to hire staff and contractors train them, ramp up production, fill plant circuits, make deliveries and wait for assay at the conversion facility before making a sale. By then, a hot spot market may have evaporated. To support the risk hypothesis, let's consider the top 10 producing mines of and the respective risks to production and sales to the West. Most recently, the Ku and Niger has raised concerns about production from the [Somar] (ph) mine, which produces about 4% to 5% of the world's uranium. Many long-term followers of the uranium space will remember the Cigar Lake floods of 2006 and 2008. Shipping logistics have become problematic for Russian LEU and in Kazakh uranium due to a severe lack of carriers and insurance providers. And this brings us back to the United States, where mine production over the past years has been virtually nonexistent, not enough to run even one of our 94 reactors. At Ur-Energy, we are working to change that situation as we ramp up production at Lost Creek. Lost Creek is a scalable mine with the opportunity to grow the existing resource by exploring on 35,000 acres of contiguous land. As I mentioned earlier, Lost Creek has a reputation for being a low-cost producer due to several factors, including fantastic average recovery rates of 90%, which is much higher than the U.S. industry average of 60% to 80%. Also, the royalty burden at Lost Creek averages less than 1%, which is much better than many other U.S. projects that are encumbered with royalties of 3% to 8% or in some cases, even higher. The map on this slide shows the Lost Creek project in blue, surrounded by additional projects we control in green. The topography in this area is relatively flat, so it will be technically feasible to pipeline additional resources into the processing plant at Lost Creek. We are currently mining within the HJ geologic horizon. However, resources have been characterized in the FG and KM Horizons, and mineralization has been identified in the LM and in Horizons but has not been characterized adequately to determine if it can be brought into compliant resources. In the future, we plan to explore known roll fronts in each of these horizons. This table shows actual statistics from Lost Creek for the years 2014 to 2019 and shows that our cash costs have been as low as $16.27 per pound when we optimize our economies of scale. While inflation will likely prevent us from reaching these costs again, we believe we can stay relatively close to these values going forward with all-in mine site cost of around $34 per pound. Additional economic analysis for both our Lost Creek and Shirley Basin projects can be found in our September 2022 reports which are linked on our company website. Ramp-up is in full swing with Header house 2-4 in full production. Header House 2-5 is in construction, and we plan to bring it online in September and follow that up with additional header houses this year. Also of significance, we have just completed casing deep disposal well five and completion work and testing will commence in the coming days. It will likely take several months to receive permission to use the well under the existing UIC Class 1 permit with the state of Wyoming. Ramp-up has been made possible by good planning to overcome numerous supply chain issues. We believe we have everything ordered or on hand for the next several Header Houses. We have been fortunate to retain several of our most experienced personnel who are now training our new staff. We still have a few positions open, but that is not interfering with production. When you are an in-situ miner, is easy to talk about green energy since we are the tip of the spear. The uranium resources that we plan to recover at Lost Creek and Shirley Basin when compared to coal-fired power will offset approximately 312 million metric tons of CO2, which is the equivalent of taking 67.5 million cars off the road for a year. We are taking additional steps to lighten our environmental footprint through the use of the new Casper shop using in-situ mining, which has a minimal and temporary impact on the land service and by recycling water. We have already reduced our water consumption by recycling about 99.3% of the water we use, and we have a goal of recycling up to 99.8% of the water we use by deploying advanced novel technologies that we are developing. Research and development has always been a priority for Ur-Energy, and the top four bullets highlight some of the successes we have already had, but we aren't resting on our laurels. We have embarked on developing a well casing and installation technique. Phase 1 field testing demonstrates a 75% reduction in our drill rig time for injection wells. We have had to delay Phase 2 testing due to limited bandwidth during ramp-up, but hope to get back to testing well development and injection capacity in the near future. As mentioned on the previous slide, we are also working on an advanced water treatment and filtration system to reduce wastewater generation. Turning to our Q2 financials. As of August 3, we had $63.7 million of cash with a remaining inventory of 223,790 pounds. We expect to ship our first load of yellowcake since ramping back up in Q4. We are fortunate to work in Wyoming, where there is strong public and government support. Many of you will recall that we received a $34 million loan from the state at 5.75% interest. As of early August, the remaining principal on the loan is $7.1 million, and we expect to make the final payment in October of next year. We have three multiyear contracts in place with average pricing of about $62 per pound, which will result in revenue of about $220 million. Keep in mind that each contract has a small flex that may result in slightly higher or lower deliveries depending on the buyers' needs. For 2023, we expect to deliver an additional 180,000 pounds into contracts for our total 2023 revenue of $17.3 million. In 2023, we expect the gross profit margin to be above 40%. In subsequent years, the contract book ranges from 600,000 to 700,000 pounds per year through 2028. This represents only about 32% of our licensed mine capacity, so we have a lot of room to layer in additional sales contracts if prices continue to improve, which we believe is likely. In addition to revenue from the sale of uranium, we are also seeing small but not insignificant revenues from interest income and waste disposal fees, which we expect to continue in the near future. Our shares outstanding totaled $264.7 million with a market cap of around $278 million. We maintained a strong cash position of $63.7 million. Our share registry contains some of the most sophisticated names in the uranium space, which we believe is validation of our company and projects. We have outstanding liquidity and great analyst coverage in both the U.S. and Canada. As we reach the end of the presentation, I would like to just hit on a few of the highlights once more. First, we remain cashed up, so we can see our way through ramp-up and into steady revenues. We also have a ready-to-sell inventory of 224,000 pounds that can be sold into contracts. Our goal is to ramp up Lost Creek to full production and build out and ramp up Shirley Basin as long-term contracts justify. We believe it's a great time to invest in the uranium space with so many market catalysts in motion, catalyst that Ur-Energy is well positioned to seize on. Thank you for your time. We will turn now to the Q&A portion of the webcast.
Operator: At this time we’ll be conducting a question-and-answer session. [Operator Instructions] Your first question is coming from Heiko Ihle from H.C. Wainwright. Your line is live.
Heiko Ihle: Thanks for taking my question. Hope you guys are doing well.
John Cash: Hey, Heiko. That’s good to hear from you.
Heiko Ihle: Always a pleasure. You went through this 10 gently in your prepared remarks a little bit ago, but I'll try to take this a step further. There was a sentence in your release that intrigued me and may be pretty happy, and I'm just going to call it here real quick. You state that your energy continues growing our long-term sales book as the market continues to improve, ramp-up production at Lost Creek and ultimately Shirley Basin. None of it is a particular surprise. But given that a lot of uranium sales stem from places that have meaningfully, meaningfully increased geopolitical risk factors over the last two years. We at least anticipate there to be a dual market in the longer term or North American uranium cells for a very meaningful premium. And at least when looking at company valuations, that trend appears to have started already. Now building on all of that, what are your thoughts on how all this will play out over the next few years? And what measures such as long-term offtake similar agreements, you think the firm will undergo to benefit from these factors, please?
John Cash: Heiko, it's a good question. Certainly, something that is in the front of our thoughts. And we're seeing that. We're seeing a bifurcated market already. I mean we've already to a limited degree out of the sales price on those contracts that we've gotten. And you can see that the average well above existing spot or long-term prices. So we're already seeing that bifurcation in the market. And it looks like Western production, U.S. production is worth several dollars a pound more than production from areas that may be exposed to more geopolitical risk. And so we look forward to seeing that more as we go forward. And I would comment, too, Heiko, that not only are we getting a lot of inbounds from U.S. utilities we are seeing increasing interest from other global players because it's not just an issue for the U.S. Everyone around the world recognizes the geopolitical risk, and they're looking for diversification. For many years, the price of uranium was very low utilities. We're struggling with profitability. And so they were willing to go for the lowest price, no matter the geopolitical risk. They felt like they had to do that. But now, especially the U.S. utilities are moving into profitability because of the Inflation Reduction Act and other actions that Congress has taken. And as they move into that profitability, they are much more interested in diversifying that portfolio of offtake agreements to reduce the risk. So yes, Heiko, I think we're going to continue to see that and maybe increasingly so. We'll see what happens in Niger. We'll see what happens with Russia, Ukraine. We'll see if Kazakhstan gets embroiled in that in any way via sanctions or Russia, strong arming that nation as well. So we'll see what happens.
Heiko Ihle: Fair enough. Next question is a lot shorter. Looking at the U.S. DOE uranium reserve, how scalable is this? Given -- I assume that there is going to be some sort of import restrictions in some capacity, at least for some originations. How much do you think your firm could ultimately sell into this program over the next five or 10 years? I mean you gave some shorter-term estimates, but walk with me through the next decade, if you could?
John Cash: Yes. Let's start with the legislation itself. The previous uranium reserve that was approved by -- during the Trump administration passed by Congress signed into law by Trump. The funding of that has expired. That was $75 million. We were able to grab a good piece of that. We sold 100,000 pounds into that uranium reserve for $64.47 a pound made delivery early this year and have been paid for that. But at this point, funding under that program has -- is done. There is no more funding. Having said all of that, Senator Barrasso, Senator Mansion, Senator Risch, they all work together, Republicans and Democrats alike to get legislation passed as an amendment to the NDAA, the National Defense Authorization Act that called for combining the uranium reserve with the American Assured Fuel Supply. And so that was passed by a very large margin. It still needs to go through a couple of more layers of approval through Congress and across the desk at the White House. But if that's passed, it will combine those two. We're hopeful that the DOE will get additional funding and that we'll be able to participate in that. So until funding is allocated and that program has stood up, it's hard to really speculate about our abilities to participate in it. But having said all that, if it is passed and funded, we would love to be able to sell more pounds into the uranium reserve. We have a lot of capacity remaining at Lost Creek, and 100% of our capacity remaining at Shirley Basin that is not spoken for. So we have significant ability to continue to ramp up production at Lost Price and especially at Shirley Basin going forward. we would love to sell a portion of those pounds to the U.S. government.
Heiko Ihle: That’s helpful. Thank you so much. I’ll get back in queue.
John Cash: All right, thank you, Ihle.
Operator: Your next question is coming from Mike Kozak from Cantor Fitzgerald. Your line is live.
Mike Kozak: Hey, John. Thanks for hosting the call. Just a couple of questions for me. First, do you think commercial production -- and when I say that, I mean at the, call it, 600,000 per year run rate, do you think that's an achievable milestone at Lost Creek by year-end this year?
John Cash: So we're definitely working towards that. Our objective for this calendar year is to produce enough to sell into our contracts, and we're moving toward that. We still have a ways to go to ramp up to get to 600,000 pounds for next year. But is it possible? Yes, absolutely possible. We're not there yet, and we got a little ways to go, but it's only August. We have a lot of summer left and moving into fall, and we're keeping Steve Hatten, our Chief Operating Officer, very busy ramping up. So yes, it's absolutely possible for us to do that. But again, our goal is not to produce 600,000 this year. Our goal is to produce roughly 180,000 this year. But moving into next year, moving to that 600,000 pound a year range. It's important for us to get to economies of scale, and that's why we want to ramp up to that level and continue to move north of that as we were able to sign in additional sales contracts.
Mike Kozak: That's great. And that kind of dovetails into my second question, which was you added the 100,000 a year to the contract book in Q2. So my question was what level of contract coverage would you want to see before you kind of fully commit to the, call it, 1 million to 1.2 million pound per year of full licensed run rate at Lost Creek? Do you want to get like the fully 1 million a year contracted or 75% of that, 80% of that, how should I think about that coverage?
John Cash: Yes. So it's always our objective to match production at Lost Creek and ultimately at Shirley Basin with our contract book. So if we're contracted out at 900,000, that's what we want to hit. We'll probably try to give ourselves a little bit of buffer there, maybe 5%, 10%, 15% buffer. That way if we run into any challenges, regulatory, wildlife, you name it, that we've got a little bit of inventory that we can rely on, and we like having that overage. But really, we're going to try to hit that contract number fairly closely going forward. And that's also true as we move into Shirley Basin. We'd like to sell effectively max out production at Lost Creek and then begin to contract out for production at Shirley and justify the ramp-up there as well.
Mike Kozak: Okay, very good. Thanks for that. I’ll hope back in queue.
John Cash: All right. Good to hear from you.
Operator: Thank you. Your next question is coming from Joseph Reagor from ROTH MKM. Your line is live.
Joseph Reagor: Hey, John and team. Thanks for taking the questions. Most of what I wanted to touch on was already hit on by the previous two callers. But there's news out about Biden administration making basically a moratorium on mining on a massive amount of land in Arizona. How do you guys look at decisions like that by the U.S. government where on one hand, they want this clean energy transition, but on the other hand, they don't want conventional mining? And does it not benefit you because you're not a conventional miner in your mind? Or does it harm you because they're anti-mining?
John Cash: Well, certainly, it was the wrong move. The area that's been removed from uranium mining is not in the Grand Canyon. I think that is a -- it's a complete misstatement that you hear a lot in the news that it's Grand Canyon. It's not Grand Canyon. It's an area outside the Grand Canyon. But I would also point out that existing claims will have to be honored, they're grandfathered in. So the companies that are there and have well-established claims, it won't affect their rights directly. However, I suspect it will make things a little more challenging trying to work within an area like that and with that designation. So -- but certainly the wrong move. It is frustrating where we have such tremendous support for nuclear energy from Republicans and Democrats in the White House. But when it comes to the fuel end of things, there tends to be less support because it involves mining. Glad to say we're not working in that area. We have never worked in that area. It's not our intention to move into that vicinity where there is such opposition. And I would further add that we're utilizing the in-situ technology. So the impact to the land that we have is minimal, and it's 100% reversible. And so we just throw those two items out there. But no, it is really frustrating that the White House took that step. Certainly, it's not good for some of our U.S. competitors in the long run. But hopefully, with additional education and time, maybe we can bring the White House around to supporting mining more robustly. But Joe, I appreciate that question. It's a very appropriate question, given that just happened a few days ago.
Joseph Reagor: Thanks for the color there. Kind of building on the back of that. you got a lot on your plate with the ramp-up at Lost Creek. You've got Shirley Basin after that. Looking further out, would you guys move on to more U.S. potential expansion, maybe lost soldiers, something like that? Or would you guys look to maybe potentially acquire something, but not in the U.S., maybe in Canada, where it seems like there's a little bit more understanding that you need the mining, too?
John Cash: Yes. No, I think the answer on both is yes. We are looking to expand operations beyond Lost Creek and Shirley Basin. We do have a number of exploration properties and development properties that we hold in our portfolio. I think it would behoove us to continue to take a hard look at Lost Creek. We have a number of properties surrounding it where we have known mineralization and resource and tremendous opportunity to grow that resource. Over the years, we've done a lot of exploration in those areas. Every program we've been successful at finding significant additional resources and bringing them into compliance. So before we go too far away from Lost Creek and spend a lot of money buying another project in the U.S., especially an exploration project. I think we have a lot of green pasture in our immediate vicinity that we need to work on. Having said that, we control that already. That's not going to go anywhere. So if and when opportunities come up to grow resources in the U.S., Canada or other first world countries where they are safe jurisdictions, where they have well-established regulatory regimes to regulate mining, and they have quality resources that we believe we can mine profitably now or in the near-term. Then we're certainly interested in that, and that's certainly on the table, and we'll take a hard look at that. We've been very disciplined since the beginning of this company. Our Board has been very disciplined when it comes to M&A. The only properties we've ever picked up are the ones that we felt like we could progress to economic production, and we're going to remain disciplined when it comes to that. So hopefully, that answers your question, Joe.
Joseph Reagor: Yes. Thank you for the well thought out answer there. That covers my questions. I'll turn it over.
John Cash: All right, thank you.
Operator: Thank you. Your next question is coming from Chris Thompson from PI Financial.
John Cash: Hey, Chris, you can go ahead.
Operator: And Chris Thompson, your line is live. [Operator Instructions] I will now hand the floor over to our host for the webcast questions.
John Cash: All right. We must have done a good job in the presentation. I'm not seeing any questions come up on the web portion. We can give it another few seconds here to see if anybody wants to type in any questions there. Okay. I've got a question here. Are you open to market-related contracts as well? That's an interesting question, and it's something that we struggle with internally all the time. The first three contracts that we have in place are effectively base price with an escalation in each of them that essentially attempts to mimic inflation. We're really happy with those contracts, because they've locked in some good revenues going forward, and we know exactly what they're going to be or very close. There is a flex in Vogtle, but we know very close to what the revenue is going to be. So we like those. However, going forward, we recognize that the market prices are improving. We're a little bit hesitant to lock in long-term contracts in a rising market. So yes, we would be very interested to entertain contracts that have a market-related provision going forward. And so our conversations with utilities, some of them like the base escalated, some like market-related, some like combinations of them. So it depends on the utility we're in discussions with. But really to more directly answer your question, yes, we are interested in market-related contracts going forward. All right. Are there any other questions out there? All right. I'm operating the system correctly, I'm not seeing any additional questions. So with that, we'll just begin to wrap things up here. I appreciate everyone listening in. And as you guys all know, I'm very easy to get a hold of. So feel free to e-mail me or give me a call directly if you have any further questions that you didn't think of during the conference call here, we'd be glad to pick up the conversation. But just would like to highlight right now that we are extremely well positioned. We're happy with where we are in the ramp up. Things are progressing. We have a ways to go before we get to that 600,000 pound mark that we've talked about, but we are well on our way and moving forward. and just so many catalysts right now in the uranium space and Ur-Energy, we're cashed up. We're ready to seize on those catalysts as they evolve. So with that, I'll return the balance of the afternoon to everyone. I hope you enjoy the rest of your day, and thank you again for participating.
Operator: Thank you. This concludes today's conference, and you may disconnect your lines at this time, thank you for your participation.
