UEC - AMEX

Good day, everyone, and welcome to the Uranium Energy Corp.'s Fiscal 2025 Fourth Quarter and Year-End Results Conference Call. Today's call will be hosted by Amir Adnani, President and CEO. Also joining for the Q&A session of today's call are Josephine Man, Chief Financial Officer; Scott Melbye, Executive Vice President; and Brent Berg, Senior Vice President, U.S. Operations. [Operator Instructions] Please also note, today's event is being recorded. Today's call will run approximately 15 minutes for prepared remarks, followed by a Q&A. [Operator Instructions] At this time, I'd like to turn the floor over to Amir Adnani, President and CEO. Please go ahead.

Thank you, operator, and good morning, everyone. For those not currently on the webcast, a presentation accompanying this conference call is available on the Presentations page of our website. Some of the commentary on today's call will include forward-looking statements and I would direct everyone to review Slide 2 of the presentation, which includes important cautionary notes. All right. Here we go. Fiscal 2025 was a breakthrough year as we delivered initial low-cost production in Wyoming, with approximately 130,000 pounds, at total cost of $36 per pound. We are now firmly in ramp-up mode with new Header Houses at Christensen Ranch online and Burke Hollow 90% complete, which will be America's next ISR mine. At the same time, we achieved substantial scale through the accretive acquisition of Rio Tinto's Sweetwater complex, establishing our third U.S. hub-and-spoke platform and expanding license capacity to 12.1 million pounds annually, making UEC the largest U.S. uranium company by estimated resources and total licensed production capacity. Our balance sheet remains strong, with $321 million in cash, inventory and equities, and no debt. We have 100% unhedged strategy to capture upside as prices rise and with the launch of UR&C, we are moving to become America's only vertically integrated uranium company, expanding downstream into refining and conversion. Moving to our financial highlights on Slide 4. We're encouraged by the strong position we find ourselves in today. As of July 31, 2025, UEC maintained a robust balance sheet with $321 million in cash, inventory and equities, based on market values and no debt. Our sales strategy for the first half of fiscal 2025 year resulted in $68.8 million in revenue and $24.5 million in gross profit from the sales of 810,000 pounds of U3O8 from our physical inventory at an average price above $82.50 per pound. In the second half of fiscal 2025, we have focused on building our inventory. We have 1,356,000 of U3O8 held in inventory, valued at $96.6 million at the uranium market price of $71.25 as at July 31, 2025. This inventory does not include the approximately 130,000 pounds of initial Wyoming production earlier discussed. Our 100% unhedged strategy maximizes our exposure to rising uranium prices and we're committed to building strategic inventory to supply the U.S. strategic uranium reserve and other government programs and global market demand. Our financial flexibility, combined with our low-cost ISR operations, allows us to scale production in step with market and policy signals. The strong uranium price environment driven by global demand for nuclear energy and U.S. policy support positions us to capitalize on these opportunities. Now moving to Slide 5 and zooming out. The last several years of over $1 billion in accretive acquisitions has built UEC into an enviable position, with global resources of over 230 million pounds in the measured and indicated categories and a further 100 million pounds in the inferred category. This does not include the Sweetwater complex. Furthermore, we boast the largest license production capacity in the U.S. with 12.1 million pounds per year across our plants. In our portfolio, we're focused on our 4 key pillars of production growth: Irigaray central processing plant or CPP, in Wyoming, Hobson CPP in Texas, Sweetwater CPP and the Roughrider project in Canada. We're actively advancing each of these growth pillars, which we'll speak about in further detail shortly. Following a string of bear market acquisitions, near cycle lows, we were able to establish UEC as the largest U.S. uranium company. This unparalleled scale is what has allowed us to identify the market need and opportunity for a single American company with scale and vertical integration, which means further growth into refining and conversion services. The launch of UR&C is designed to position UEC as the only U.S. company moving towards end-to-end capabilities in uranium mining, processing, refining and conversion for delivery of natural UF6 to enrichment plants for LEU and HALEU production. The timing couldn't be better, as U.S. nuclear policy is undergoing a seismic shift. President Trump's executive orders to quadruple nuclear energy, combined with Energy Secretary Chris Wright's call to eliminate reliance on Russian uranium supplies have created unprecedented tailwinds for restoring the U.S. nuclear fuel cycle. The planned facility would be a centerpiece of this effort, ensuring a secure domestic supply chain for nuclear fuel. We're moving this project forward in stages, subject to contingencies and look forward to providing updates, as it progresses. Moving to Slide 8. We will start with the Irigaray hub, as we provide a bit more detail on the ongoing initiative at our 4 production pillars. A key driver of our Wyoming production growth was the commissioning of 2 new ISR mine units at Christensen Ranch; Header Houses 10-7 and 10-8. We've also made significant progress on wellfield development with an active well installation in Wellfield 11, delineation drilling completed in Wellfield 12 and extensions planned in wellfields 8 and 10. Construction of 4 additional header houses in Wellfield 11 is underway, with power pools placed and buildings being set on their foundations. These efforts will form the backbone of our future production plans and as a result of this ramp-up, our Wyoming workforce has grown to 73 personnel, reflecting the scale of our operations in the Powder River Basin. Turning to South Texas. Our Burke Hollow project is on track to become America's next ISR mine. Construction is 90% complete, with a target completion date of November 2025. We're positioning for operational startup in December. This project represents a critical component of our South Texas hub-and-spoke production platform, which leverages our Hobson CPP. At Burke Hollow, we've made significant progress on the ion exchange facility and the first production area known as PAA-1. Key milestones, including the completion of injection and recovery wells, the installation and loading of ion exchange columns with resin and the drilling of a deep disposal well. The high-density polyethylene trunk line connecting the satellite facility to PAA-1 has been fused, pressure tested and connected to the plant. Concurrently, 3 phase power is being advanced to the site and equipment installation continues on schedule. With these advancements, our South Texas workforce has grown to 56 personnel, supporting our broader regional operations. Moving back to Wyoming, to focus on our newest asset, Sweetwater. As I mentioned previously, one of the most transformative events of fiscal 2025 was our $175 million acquisition of Rio Tinto's Sweetwater plant and Wyoming uranium assets, which established UEC's third U.S. hub-and-spoke production platform. This transaction added the Sweetwater plant, a conventional mill, 1 of only 3 in the U.S. with the project having approximately 175 million pounds of historic resources. The Sweetwater plant, with a license capacity of 4.1 million pounds of U3O8 per year, is a 3,000 ton per day mill that we plan to adapt for processing loaded ion exchange resins from ISR operations, unlocking significant synergies with our existing Wyoming assets. On August 1, 2025, the Sweetwater uranium complex was designated as a FAST 41 transparency project by the U.S. Federal Permitting Improvement Steering Council, following President Trump's executive order to increase American mineral production. This designation expedites ISR permitting for deposits on federal lands. Coming alongside the federal government, the Wyoming State government has agreed to match the permitting time lines, enabled through the FAST 41 program. With regards to project advancement at Sweetwater, we've initiated a new drilling program to define future ISR wellfield areas and we subsequently aim to publish a technical report summary, to incorporate these results, ensuring a comprehensive resource estimate. Now moving to Slide 11 to discuss Roughrider in more detail. In 2024, we drilled metallurgical holes across the west, east and far east zones, collecting core to confirm metallurgical testing. Since January 2025, we have conducted bulk solvent extraction, yellowcake precipitation, tailings neutralization and effluent treatment tests. These results will assist in completing our planned prefeasibility study for which we've issued requests for proposals to engage qualified firms. The PFS will be a critical step in advancing Roughrider toward development. Before I close out on our 2025 fiscal year results, I wanted to provide a brief overview of the current uranium market backdrop. As many of you know, we are entering into a supply squeeze where we have seen significant underinvestment into uranium mines over the last decade. Growing demand, coupled with this under investment, has led to a structural supply deficit that is projected to continue and widen, reaching a cumulative deficit of 1.7 billion pounds by 2045. In the U.S., we have seen unprecedented and bipartisan support for nuclear energy to combat this supply squeeze. Under the Trump administration, U.S. policy has shifted decisively toward restoring and expanding the domestic nuclear fuel cycle, as part of the broader strategy to bolster energy independence, resilience, dominance and national security. A key goal is to avoid reliance on foreign uranium, conversion and enrichment services, while supporting critical infrastructure, including artificial intelligence and military needs. President Trump has set an ambitious target to quadruple U.S. nuclear energy capacity by 2050, surpassing the World Nuclear Association's tripling goal and to advance roughly 10 new large-scale reactors by 2030. To strengthen the fuel cycle, the U.S. administration is invoking the Defense Production Act. To enter voluntary agreements with domestic companies for enriched uranium and is considering federal offtake commitments to create secure markets for newly expanded or built facilities. At the same time, regulatory and institutional reforms aim to accelerate licensing, fast-track projects, enable advanced reactor deployment and reduce dependence on foreign nuclear fuel sources. In summary, we have never seen a more positive policy environment for our industry. Amid this favorable policy backdrop, major technology companies are increasingly turning to nuclear energy as a reliable carbon-free power source, to meet the soaring electricity demands of AI and large-scale data centers. This growing interest underscores nuclear's emerging role as a cornerstone of the U.S. digital infrastructure strategy. This includes major investments into nuclear energy from every hyperscaler, the latest being NVIDIA's investment into TerraPower, in Wyoming to support the Natrium reactor. We're now witnessing an unprecedented flow of private capital into nuclear projects, from hyperscaler power purchase agreements to advanced reactor investments, reinforcing the critical need for U.S. origin uranium and conversion capacity. To wrap up, fiscal 2025 was a year of execution and transformation for UEC. We achieved initial production in Wyoming, advanced Burke Hollow to near completion and expanded our U.S. platform through the Sweetwater acquisition. The launch of UR&C is designed to position us as a leader in the U.S. nuclear fuel cycle and our strong balance sheet provides the flexibility to execute on our growth strategy. With unprecedented policy support and a tightening uranium market, we feel UEC is uniquely positioned to meet the growing demand for secure domestic uranium supply. We're excited about the opportunities ahead and look forward to delivering further value to our shareholders. Before I turn it back to the operator, a couple of points. First of all, today's call is scheduled to end around noon Eastern time. If we don't get to your question, please don't hesitate to reach out to our Investor Relations team, and we'll be happy to follow up directly. Second, please 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. Together, the 4 of us are backed by a UEC team with more than 900 years of combined experience in the uranium industry. That depth of experience is what drives our daily execution across operations, finance and strategy. With that, we'll open the call to questions. Operator, please go ahead.

[Operator Instructions] And our first question today comes from Brian Lee from Goldman Sachs.

Thanks for hosting this call. I know there's a lot of focus around your ramp-up efforts here and moving from kind of asset status to producer status. So helpful to kind of start to see the early milestones and what's happening from a production standpoint. So kind of really my first question, kudos on the production and the cost realization here in fiscal '25. I know you might not be ready to give full guidance metrics, Amir, but can you at least give us some sense of what target ranges are potentially reasonable outcomes as you think about the next 12 months? You're going from 130,000 pounds to Christensen Ranch sounds like it's accelerating. You have a lot of early-stage successful milestones, it sounds like, at Hobson and Sweetwater. So is it fair to say we're going to still be in the hundreds of thousands of pounds of production in '26? Or could we be thinking about even 1 million pounds plus? Sort of what are kind of the low and high-end outcomes that you could consider just based on how the next 12 months goes, both from a production standpoint, but also from a market price and demand standpoint?

Brian, thanks for that question. And just again, operator, making sure you can hear me okay?

Yes. Coming through loud and clear.

Okay. Perfect. Brian, thank you again for that question. And something to touch on. When you look at these results and when you look at the ramp-up, the bulk of production that we're reporting here came from mine units or header houses 10-7 and 10-8, which, as we disclosed, really only came on in the last few months, 10-7 in April and 10-8 in June. So you can already see and appreciate that new header houses that are providing fresh new output and production are definitely putting us obviously on an uptrend. Burke Hollow is going to be another source of production growth and clearly, that's going to, as we indicated, be completed around, in terms of construction completion, by November and the operational startup in December. So any way you look at this, Brian, production is ramping up and is going to continue to ramp up and for context, Christensen Ranch and Burke Hollow are only 2 of 7 fully permitted projects in terms of satellite projects that we have in the pipeline that can support ongoing production growth and that does not include the sweetwater complex, which with this fast-tracking news and development, hopefully, we could get the permit amendments necessary to conduct ISR at Sweetwater and be able to develop that project, bring that online as well. When you look at our total license capacity of 12 million pounds or over 12 million pounds per year and when you look at our significant resources that I've already spoken to, you can see that this company's goal and ambitions are certainly to build a multimillion pound per year uranium producer. And obviously, that's a plan and objective that we'll look to achieve over the coming years. But very much in lock-step with market conditions, market pricing and government policy and particularly the developments we're seeing in the U.S. around the strategic uranium reserve. This fiscal year, we did not see the strongest uranium prices. In fact, we ended July 31 around $70 per pound. That was a signal to us that it was a great time to build and scale operations, but not to necessarily be making sales. And you saw that we intentionally held back production exactly for that reason and then you saw overnight the uranium prices are actually over $80 per pound. So just to come back and to finish the answer to your question there, Brian. This is our first call of many calls to come in terms of earning calls. As we have more of these calls, we look forward to more interactions to demonstrate and show how the production ramp-up is progressing. I think you could say that in 12 months, we've delivered on 2 or 3 key takeaways. Number one, low cost. We've achieved low cost coming out of the gate at a time where we've seen struggling operational restarts out there. UEC and these operations and our team demonstrate that we've got the efficiency and the personnel and the team and asset base to deliver low-cost production. These numbers we've reported today are amongst the lowest cost reported by any company over the last 1 or 2 years using U.S. ISR or ISR in general. Volumes will increase as we build additional header houses, as we build additional satellite projects, in quarters and years to come. And we have fully permitted projects to do that with. We're not limited by the long, long delays that are associated with permitting. So we're in the driver's seat with what we're doing.

Super helpful. I appreciate the comprehensive answer. Maybe just one more and I'll pass it on. You alluded to government policy. There's been a lot of headline developments. I know you yourself, Amir, spent a lot of time in D.C. So I wanted to touch upon a couple of things there. So any thoughts you can share on state of the state with respect to, there's been talk about a strategic uranium reserve in the U.S., anything you can share on what you're expecting timing, impact wise from potential Section 232 as it relates to uranium? And then thirdly, on this UR&C, I know it's still early stage, but -- and then there's probably multiple potential outcomes for how you move forward. What's your thought process in structuring that venture to include some sort of either government funding investment, offtake? Like, what are the different government involvement exercises that potentially could play into that? I know a lot of investors are focused on what happened with MP and I think just overnight with Lithium Americas. So how does UR&C and UEC potentially fit into that? And how are you trying to, if you have your choice, structure that with government involvement?

Brian and I'll tackle that question in 2 ways. Let me just comment first with respect to the UR&C. That's our U.S. Uranium Refining & Conversion Corp. initiative. And then I'm going to hand it over to my colleague, Scott Melbye, to speak on some of the government policies that we're seeing developing in D.C. and on the Hill. Look, very clearly, and as we've stated, we've identified and seen for the last 1.5 years to 2 years that there is substantial bottlenecks in uranium refining and conversion, particularly in the U.S., but even on a global basis, especially if we're going to see a doubling and tripling or quadrupling of nuclear energy, as President Trump is calling for, not only is the current capacity not enough to meet current demand, but it's going to have to expand substantially from these levels. We're looking at similar models across the world. You look at how Chinese state-owned companies and Russian state-owned companies that we compete against, how they operate in the nuclear fuel cycle, they operate in a vertically integrated way. They don't just mine uranium in isolation or convert uranium in isolation. It's done under one banner and what we're trying to create here is really that American champion that can have end-to-end capabilities, which frankly has never existed before. But if we have ambitions to try to compete with Russia and China and if we're going to quadruple nuclear energy, that type of business model, that kind of company is necessary that can go from mining uranium to refining it and converting it and delivering the UF6 that enrichers need to support and enable further enrichment growth. And so this is one of a kind. This has never been done before in the U.S., but it's being done around the world by major nuclear players. Clearly, this has massive alignment with government policy. And we've seen this, and as you touched on, not only is government focused on these key areas of national security vulnerability with lithium, rare earths, antimony, but uranium and nuclear fuel has been identified several times, several ways by Department of Commerce, by Department of Energy as a national security issue that needs to be addressed. So we think the alignment is very much on mark. It's timely. We started this initiative in terms of laying the groundwork, the engineering work, the engineering studies over 1 year, 1.5 years ago. We have that first-mover advantage and the vertical integration is a key differentiator. We're the only company in the U.S. really tackling this issue end-to-end from uranium to conversion and we've structured this to be able to address partnership from strategic involvement, whether it's government, utilities or other strategic partners to be involved. When we look at how this gets evolved and to get more detail about the funding of it, Brian, obviously, as of right now, UEC is funding this 100% and UR&C is a 100% wholly owned subsidiary of UEC. But as we have meetings and trips and discussions in the coming weeks and months, we'll have more updates and information to share in that time and more news flow will come on this very exciting initiative and development. We're very excited by it. We think it's very well timed. It's early days. So again, we'll have more information on it. But let me also give the floor to Scott to speak a bit more on some of the U.S. government policy developments. Scott, over to you.

Great. Thank you, Amir. Brian, with regards to the strategic uranium reserve, I think -- we were very encouraged to hear Secretary Wright's comments over in Vienna at the IAEA meetings, where he put forth pretty clearly in his remarks that the strategic uranium reserve is a policy that we should be pursuing to ensure energy security, national security and build up our domestic stockpile. So we feel that as the uranium producers of America, we've lobbied very heavily along those lines. We think the strategic uranium reserve is good policy where taxpayer dollars are transferred to assets on the balance sheet of strategic U.S. origin uranium reserve, that can serve both utility emergency, supply emergencies for the electric utility industry, but can also support our defense programs, the naval propulsion programs as well. We're also obviously looking forward to the end of the Russian imports, with the Russian uranium ban fully kicking in at the end of 2027. We're working very hard to extend that to China. We've seen some disturbing import-export data between Russia, China and China back into the United States that would indicate that they're, at worst, violating U.S. trade law and bringing in that Chinese uranium, which has really circumvented Russian supply, or quite simply just bad policy. So we're lobbying on that front to see -- we love global trade, but we draw the line at China and Russia in terms of strategic minerals. And then critical minerals designation. President Trump already considers uranium a critical mineral and is issuing executive orders along those lines. Really, the executive order to revitalize the industrial base to support a quadrupling of nuclear power in the United States is really focused on the fuel cycle, uranium conversion, enrichment. And one of the things that we've seen, the most material thing that we've seen so far is the fast-track. Permitting, the FAST 41, the transparency dashboard. Basically, the Trump administration is saying if you have a project that the federal government, either through inaction or action has held up your project, bring it to the White House and they'll get it on the dashboard and put firm time lines for the review and issuing of permits. Uranium is a critical mineral; if we want more of it sooner, this is what it's going to take. So we're very encouraged just across the board, the Trump administration support for nuclear power more generally and specifically supporting the uranium conversion enrichment. I think UEC, with our unhedged book and 12 million pound capacity, and hopefully now moving into a vertical integration into conversion will also give us some very specific support coming out of this administration. But we'll see in the coming weeks. We're going to be in Washington, D.C. quite a bit between now and the end of the year and hope to gain some clarity on that.

And our next question comes from Heiko Ihle from H.C. Wainwright.

That was a very comprehensive answer here before, so one of my question's already been answered. But Amir and Scott, maybe if you want to provide a bit of color on -- the conversion business has obviously been ridiculously well received. You want to provide some color on the vertical integration that should allow you guys to go more downstream with that, please?

Heiko, thanks for that question. And really, again, it goes back to what we were saying here in terms of the business model around vertical integration is a very battle-tested business model. This is again how the French -- how the Chinese, how the Russians are conducting the nuclear fuel cycle for maximum resiliency. The conversion business and downstream activities from uranium mining do also really help improve and expand on margins and we do generally see a different type of industrial-type margin downstream from uranium mining than mining itself. So really, when you kind of look at the business model of combining the ability to control the uranium mining and processing assets and infrastructure that UEC has put together, and as I mentioned at the beginning, the sheer size advantage, right? We're not talking about building conversion on top of a mediocre sized mining operation. We're talking about the largest resource base and license production capacity ever assembled in the U.S. by one company as the foundation of what we're building the conversion on top of. And that sheer size, combined with going downstream, we just think is the perfect one-two punch. And again, it speaks to the market opportunity. The bottlenecking conversion is real and that bottleneck in conversion, in fact, has arguably maybe to some extent, hurt the uranium price in terms of not allowing to uranium price to reach the all-time highs that we all believe it should get to. Conversion enrichment prices, conversely, are near their respective all-time highs. So this is really about providing diverse sources of revenue to the company as it develops multiple ways of delivering nuclear fuel supply and it's really about that entirety of the supply chain for the nuclear fuel that one company can control that makes that company more strategically valuable. And I think that's why this has been well received, Heiko, since we announced it, not just from a market point of view, but from conversations and feedback that we've received directly from the end users and the actual nuclear fuel market participants as well.

Fair enough. And then obviously, you guys have an insane amount of experience in the uranium space. Building on some of your comments from earlier, do you want to just maybe walk us through a bit where you see geopolitical factors go for the industry? I mean, obviously, demand for North American and especially for your product from South Texas is through the roof. But do you want to just maybe provide the audience with a bit of color on where you see that going and key factors that may be underappreciated or not so much seen by the market yet?

Yes. And again, we'll do it in 2 parts. I'll go first, and then I'll let Scott speak to that too, especially within his role as the President of the Uranium Producers of America, that's our industry association. But as recent as yesterday, as recent as the last year, we have seen a premium on uranium that can be delivered to a buyer in the U.S. -- warehoused in the U.S., compared to other locations. When the Department of Energy purchased an initial round of uranium for the strategic uranium reserve to stand that up over 1.5 years ago, it paid an over 20% premium because of the way it's qualified. The U.S. reserve can only be filled through U.S. companies with U.S. production or U.S. inventory. And so we have certainly seen that this dependence on foreign uranium and nuclear fuel, where the U.S. is effectively importing 100% of its nuclear fuel requirements does create an opportunity to be a domestic supplier. But at the same time, that domestic supply initially carries a premium with it because of the scarcity factor. Over time, of course, as domestic supply expands production, conversion and enrichment, market pricing should be more aligned with global market prices. But there is a pinch point right now and the most acute undersupplied market when it comes to nuclear fuel is the biggest market in the world. The biggest market in the world is the U.S. for nuclear fuel consumption. Over 90 reactors operating makes this the largest market anywhere. And yet, again, there's this almost 100% dependency on foreign imports. Let's not forget, we have the Russian uranium band that has already passed and is law, and it kicks in December 2027, which is really around the corner. When you think about the fact that uranium mining, conversion, enrichment doesn't happen overnight, it takes years to permit, develop and build these operations. So that's part of the reason we have commenced our initiatives now, is to really be in a position to be there and be that domestic source of supply, especially as the Russian ban takes full effect in late 2027. But between now and then, I think we can expect to see a premium on U.S. sources of mining and conversion. Scott, would you like to add to that?

Yes. Heiko, I think you know the market structural deficit that we face globally today, if we look over the next 2 years, the world is consuming about 50 million pounds more than it's producing with the global mines. And that structural deficit is only going to get bigger as we're now -- I left the World Nuclear Association meetings in London a week before last, where the base case for nuclear growth outlook through 2045 is a doubling of nuclear power. And that's just the start. If we go to the aspirational goal of tripling nuclear power at the World Nuclear Association set out for President Trump's quadrupling. So we need a lot, not just a little. In terms of new production, we need a lot. And it's also important to note that the world's largest producer today. It was the United States in 1980. It then was Canada on the strength of Saskatchewan. But today is Kazakhstan, producing over 40% of global production. They share 2 very big important borders with Russia and China, who have very fast, big growing programs of their own and they recognize the strategic value of Kazakhstan, not only their uranium, but their oil and gas. So I think going forward, I think we shouldn't expect -- I think already today, 80% of Kazakh uranium goes to Russia or China. So we need to be developing uranium resources in stable western jurisdictions and the United States clearly has been underdeveloped in recent years, not for lack of resources. The United States Geological Survey estimates that there's over 1 billion pounds of known and likely resources of uranium in the Western United States. So we're excited about this revitalization. We're happy to be at the forefront of it. But it really is a time where we're going to see U.S. uranium production really on a revitalization path, and it really is an attractive premium product today.

And Scott, I know we spoke yesterday, happy belated birthday again.

Thank you.

And our next question comes from Alexander Pearce from BMO.

Amit, Scott and team, so you flagged in the release earlier, you're working on upgrades for increasing the pace of drawing and drumming the uranium. Is it fair to say this is currently the bottleneck for the project, the drumming side? You mentioned you're bringing on new wellfields and that seems to be going very well. But can you give us a bit more update, more detail on the changes you're making within those upgrades? And how much do you expect to spend? And then maybe when you expect to complete those upgrades, so we can expect the uptick in drummed outlook?

Alex, thank you for that. And I'll take that up first and then I'm going to invite Brent Berg to speak to that as well. But really, the way we saw this, Alex, was more to do with the fact that during fiscal Q4, with the intentional strategy we had on holding back inventory and the fact that we were not in any way required to make deliveries of the finished good, the dry drummed uranium. We really took advantage of that opportunity and moment in time to make further upgrades to the equipment that is on the processing side, the packaging side of the plant, so that we can make sure when we did basically go into even further ramp-up mode and when sales and deliveries became more mission-critical, that we were able to support 24/7 operations with 2 shifts basically. And so it was really more to do with taking advantage of that window to give ourselves even more capacity for downstream or later in time. And so to that end, I mean, as you know, keeping the uranium in precipitated form is every bit as good as whether it's dried and drummed. There's very nominal cost associated from going from precipitated to dried and drummed. And that's why we also presented some of the dried and drummed material to make sure that we were able to deliver and show what the initial production cost numbers are, which we're very pleased with. But I'll let Brent also speak a bit more in terms of the details of what we're doing with the thickeners and calciners. And Alex, to be clear, this is not a bottleneck right now. We could be drying and drumming uranium right now. We're simply increasing the capacity. And again, because we didn't have any deliveries to make, it gave us the time to do that work without putting the team under the pressure of doing both the upgrade and drying and drumming at the same time. But Brent, go ahead if you'd like to add to that.

Yes. Thanks, Amir. And Alex, I would add that refurbishment activities were undertaken earlier in the fiscal year at the Christensen Ranch satellite ion exchange plant. We rebuilt the ion exchange columns in the main plant. And that work led to continuous 24/7 operation and the ability to operate the plant at design capacity. So as Amir mentioned, in a similar manner, with no need for uranium sales, it was clearly an opportune time to upgrade the Irigaray central processing plant. At this stage, we're rebuilding 1 of 2 thickeners. It's a storage vessel for precipitated yellowcake prior to drying and packaging. And the refurbishment includes the replacement of internal components with new parts. Additionally, we will do some refurbishment to the calciner that we used to dry our product to increase throughput of dried yellowcake. And again, updates will include components as recommended by the manufacturer to really increase our operational efficiency moving forward. And these are upgrades that are happening now and in the coming weeks.

Our next question comes from Katie Lachapelle from Canaccord Genuity.

Most of my questions have actually already been answered, but maybe just one more on the inventory side. You ended the year with quite a considerable amount of inventory having deliberately held back some material in the second half. As you said, the decision to not sell was due to low prices, but we've since seen small prices rise, about 15%, since the end of your last quarter. So how are you guys thinking about inventory build going forward and the timing of future sales? Like is there a particular price point, say, north of $80, north of $85, that you would look to monetize some of this existing inventory? Or is the plan to continue to build inventory and hope for even higher prices?

Katie, thank you for that question. The 2 things go hand in hand. So you're right about the inventory, but you also got to take note of the balance sheet. And the balance sheet with over $320 million of available liquidity, and no debt, is part of what allows us to have the ability to make calls like what we did here, right, where we thought $70 was just kind of a ridiculous price and it didn't make sense to make sales there and be able to be in a financial position to make that decision to intentionally hold back. And similarly, today, as you pointed out correctly, we've seen an interesting pop in the uranium price overnight. We're back over $80 this morning. And one of the other sequesters out there this morning is raising more money to buy physical uranium. But Katie, I would say, as of right now, we have our kind of focus squarely on pending developments coming out of Washington. I think with the comments that Scott Melbye made already about Secretary Chris Wright's comments about boosting the strategic uranium reserve and some of the potential news that might come around what that reserve and the timing of U.S. government purchases will look like, along with the fact that there's a Section 232 investigation on critical minerals and uranium that the results of which or recommendations by Department of Commerce are expected soon to be also sent to the White House, all of this really kind of creates an environment where we love the idea of sitting on as much U.S. warehouse uranium inventory as possible, with these developments and actions taking place, particularly again, in the U.S. So there isn't a price that we have in mind right this day. Just because uranium is at $80 doesn't mean we're rushing out and selling uranium at $80. We think there could be more interesting developments in the market, again, coming out of Washington that we want to be ready for. And I'll let Scott add to this point as well. Scott, go ahead.

Yes. Katie, it's just we love the flexibility and we have the luxury of being able to hold again. As Amir said, we could have signed contracts over the last 3, 4 years that would have pressured us to produce faster, pressured us to sell into contracts that would be well below where the current spot and long-term prices are today. So we've never felt more comfortable being uncommitted and unhedged going into the market that we're seeing develop right now.

Our next question comes from Joseph Reagor from ROTH Capital Partners.

Amir and team, so I guess first thing, just kind of a point of clarity. On the 130,000 pounds you produced at Christensen Ranch, you guys referred to it as dried and drummed, is it not considered part of your inventory because there's like one final finishing step? Or is it like some companies where they separate their inventory from the inventory that's at a converter, compared to the inventory that's on-site at a project?

Joe, thanks for that question. It's the latter. We just wanted to clearly, given that you see had an inventory position that was previously purchased at market lows, we wanted to be very clear in making the distinction around that inventory and what is now, obviously, as we have transitioned into production, is a production-related inventory. But Josephine, did you want to add to that point as well?

Yes. Thanks, Amir. This is Josephine Man. So the finish -- the uranium concentrate that we mentioned about is included as part of the inventory on the balance sheet. So you can see that in the breakdown of the inventory, so that is part of the uranium concentrate from extraction.

Okay. I just want to make sure I was understanding it correctly. And then on UR&C, Amir, can you walk us through kind of how you see potential news flow as you advance that over, call it, the next 12 months? What can we as investors look for as far as updates from you guys?

Yes. Joe, in no particular order, I would say, there are several tracks that we're running simultaneously. So one track involves the work that we're continuing to do with Fluor, and that's building on the past year's work of engineering, analysis and reports and studies and details and tech work that had already been completed that got us here. So one track will be engineering-related work by Fluor that will continue to do. And as updates become available there, that would be one source of news flow. Second track is we are in team-building mode to also continue to develop the dedicated team around the refining, conversion initiatives. So there will be information to share on that front. There are numerous discussions underway from government level discussions to off-takers, utilities, strategic partnerships and investments and investors, et cetera. all of which could be potential sources of updates as there's developments there. So again, multiple tracks and everything is happening on parallel tracks. And in no particular order, as we have developments and news from these various tracks, we could maybe be and hopefully be in a position to provide more updates. At least that's the goal, Joe, and how we're looking to push this forward. But we're pushing and really are pushing to move expeditiously. This is a very timely opportunity and the feedback we're getting from various groups that we're in discussions with is that this is something we need to move very quickly on because it's very necessary.

Our next question comes from Kristian Koschany from National Bank Capital Markets.

I'm asking on behalf of Mohamed, who is on a site visit right now. I was just wondering if you could provide a bit more color on the cash costs and total costs, specifically what's included in the noncash costs and how we might expect the cash costs to progress as the Christensen ranch continues, and how the full rebuild of the yellowcake thickener and improvements to calciner might improve things or change things in the future?

Yes. Thank you for that question. So again, and I'll let Josephine go a bit deeper, but again, at a high level, as you've seen with our numbers that we've reported so far, this low-cost production that we've achieved in such early innings of the production ramp-up is very noteworthy. It's industry-leading in terms of where it's come in. It really speaks to the efficiencies and the asset base and team that's operating here. Total cost per pound of $36.41, and I'll let Josephine break down the cash component of that and the noncash. But to address your other question, the work that's almost complete on the thickener and calciner upgrades, that should not have any impact on future production cost numbers. And if anything, like we said, it's meant to give us expanded capacity at the Irigaray plant. Josephine?

Yes. Thanks, Amir. So generally speaking, the total cash, cost per pound is comprised of, obviously, labor cost, chemical and utility costs that we incur at Christensen Ranch and also the Irigaray processing plants. And in terms of the noncash production cost, that mainly is coming from the depreciation of the mineral property acquisition costs from the time that we acquired Christensen Ranch from U1A so we allocate part of the allocation cost to the Christensen Ranch mine that we are producing at right now.

So would we expect that these costs that we saw in this quarter to be roughly what we would -- should be looking at going forward, or...

Yes. Go ahead, Josephine.

Okay. Yes. So the noncash portion of the production cost is quite steady because we amortized on a straight-line basis in terms of the acquisition cost. In terms of the cash production costs, we are foreseeing that it will be quite stable as compared to the Q4 of the fiscal 2025. That's also impacted by the production volume that we are expecting to have in the coming quarters.

And our next question comes from Justin Chan from SCP Resource Finance.

Brent, I want to thank you, Brent, for your time last week. Really appreciate it, and Derek and the team as well. Just a lot has been asked, but given your market-driven strategy, which has really played out really well so far, you haven't had contracts yet to deliver into or [indiscernible] market. I was just curious how you plan the Header House ramp-up and just your operational ramp-up given that you do have to manage volumes, but you also have -- your balance sheet gives you the luxury of being able to, let's say, set up off for the long run instead of rush production. I'm just curious how you guys are looking at the next year with Texas coming on and Wyoming, and at the current prices and also the direction things are trending? I guess, similar to the first question I asked, I don't need an exact production range, but I'm just curious how you see things and how much focus there is on ramping up quickly versus seeing where the market goes.

Justin, thank you for that, and thank you for taking the time to tour our Wyoming operations last week. We appreciate that. I'll go first and then hand it over to Brent. I think there's kind of a few different sets of elements here to consider. So one is obviously the uranium price. And our view remains that just as we've seen conversion, enrichment prices near their respective all-time highs, we should see uranium prices at some point based on, again, the current supply-demand fundamentals and given the supply deficit we see globally, not just in the U.S. but everywhere, on uranium supply-demand studies. We really do believe that uranium prices need to, similarly to conversion, enrichment, probably reached their previous highs. And as that happens, we would look to obviously take a fuller sort of advantage of our permitted and existing capacity that we have of facilities, the processing plant, the resources, et cetera. Having said that, there's also a human resource limitation. So as we go through this update, you notice that we kind of proudly and, importantly, highlight the number of personnel that we have in our Wyoming and Texas workforce. And this is an industry globally that has been quiet and somewhat dormant for the last decade. So today, the entire industry is really facing human resource challenges as it ramps up. This is an area that we're very focused on, we're investing in, and we continue to, again, demonstrate that the size of the team is growing to support those future ambitions of increasing production. And as you, as a company, tackle and build new projects, I think there's a tremendous competitive advantage you're building and know-how around new construction. Look at the fact that -- and I'll let Brent speak to this, but I mean, you got to come and visit what we're doing at Burke Hollow. That is the newest uranium project anywhere in the world. That is the only new greenfield anywhere in the world that has been built from scratch. And it's 90% complete and, as we mentioned, should be operational by December. The team that we have that has been directly involved with that project from, by the way, day 1, going back to 2012, to now, by the end of completing this, we'll have a tremendous understanding around building new projects and commissioning new operations. And that becomes a lasting advantage for UEC as we go to additional satellite projects and increasing production. Brent, I'll let you take it over from there.

Sure. Thanks, Amir. And Justin, thanks for taking the time to visit our Wyoming operations. So as you know, UEC is continuing with our production ramp-up. Mine development continues in Wellfield 11 at Christensen Ranch where 4 header houses are currently under construction, [indiscernible] well installations nearing completion and surface construction is on schedule for startup of additional fresh production in the coming year. Additionally, we've been doing delineation drilling in Wellfield 12 as well as extensions to wellfields 8 and 10, and that will form the base of production at Christensen Ranch for the coming years. Down in Burke Hollow, as Amir mentioned, the project is 90% complete. The initial wellfield is now set up with pumps downhole and the team testing operation of those. The trunk line from the wellfield to the satellite being fused, pressure tested and hooked up to the satellite and final touches going on there. In terms of the team, I just got to say I'm blessed to have some really skilled people working on our team in both Wyoming and Texas. And I look forward to continuing to grow the team and ramp up production in both states. Thank you.

That was very comprehensive. And yes, maybe just one follow-up. If prices do kind of ramp up much faster here or perhaps there's some action from the administration that creates a U.S.-specific price or et cetera, I guess what would change from your operational plan, say, if uranium was $120 right now, how would that next year look different?

Just simple, Justin, just rate, the rate of change on development and acceleration of wellfield delineation, rigs operating and construction activity on whether it's wellfields or header houses. So really, it's about also having that flexibility and optionality to adjust the rate accordingly to both market pricing and conditions.

Got you. And just given the constraints, for example, on the HR side, do you have a sense of how much faster you could do things?

Yes, we do. I mean, I think, again, the benefit of being in a position where you're operating and you're ramping up, and the market can see that and the labor market can see that, frankly, we've really benefited from incoming inquiries from folks who are working in the industry or used to work in the industry and left the industry and are really attracted to the opportunity to come to UEC. They see the platform that we put together, they see the scale that we have. And there's an opportunity to see a real longevity when it comes to a career here. So everything we're doing in a way has become a self-fulfilling prophecy in terms of being acting as a real magnet for us for being able to continue to attract the talent. And again, as we see there's a need to accelerate, then we can also accelerate the uptake and intake of that HR sort of source and force that's coming to us.

Got you. So for example, do you think doubling your rollout rate would be conceivable within the year if prices were there? Or I'm just trying to get a sense of quantum.

Look, our goals and ambitions are very much that. And we, again, we hope that the market conditions support that. We were somewhat frustrated by the way prices were subdued basically through to July 31 when we -- when our fiscal ended and we just thought the $70 uranium price made no sense. But sometimes the market can be that way, and before it starts to really reflect the supply/demand fundamentals. But luckily, we're seeing some sort of noticeable improvements here, as we've talked about with respect to price. And again, we have to see how it all plays out, but we wouldn't be surprised if we saw further improvements in price and that, again, giving us the backdrop with which we can continue to progress and ramp up our efforts.

And ladies and gentlemen, with that, we will conclude today's question-and-answer session. I'd like to turn the floor back over to management for any closing remarks.

Thank you. Again, thank you, everyone, for joining us today. Fiscal 2025 was truly a landmark year for UEC. We're just getting started. With our operational achievements, strategic acquisitions and the launch of UR&C, we envision a platform to lead America's nuclear fuel cycle. We look forward to updating you on our progress in the quarters ahead. Thank you, and have a great day.