enCore Energy Corp. (TSXV: EU) released its financial results for the three months ending June 30, 2024. The report highlights the company’s continued operational expansion and revenue growth, balanced against significant cost increases that led to a wider gross and operating loss compared to the same period last year.
In the second quarter of 2024, enCore Energy recorded $5.3 million in revenue, while it posted $35.7 million in revenue for the first half of the year, fueled by the sale of 410,000 pounds of U3O8 sourced from both production at its Rosita In-Situ Recovery (ISR) Central Processing Plant and purchased quantities.
However, this increase in revenue was offset by a significant rise in costs, leading to a gross loss of $660,000 for the first half of 2024, with a $3 million gross loss recorded in the second quarter alone.
The company’s operating loss also widened. For the three months ending June 30, 2024, enCore reported an operating loss of $9.4 million, up from $7.0 million during the same period in 2023. This led to an operating loss of $16.8 million in the first half of the year, up from $14.7 million during the same period in 2023. The increase in losses was driven by higher expenses associated with the commissioning of the Alta Mesa ISR Central Processing Plant and operational inefficiencies at the Rosita Extension Wellfield.
A key development during the second quarter was the commissioning of the Alta Mesa ISR Central Processing Plant and Wellfield on June 13, 2024. This facility, enCore’s second operational uranium-producing site in the United States, marks a significant expansion of the company’s production capabilities. Although Alta Mesa began production late in the quarter and did not contribute to sales during this period, its long-term impact is expected to be considerable.
Initial production results from Alta Mesa were promising, with average wellfield solution head grades of 120 mg/L U3O8 in the last two weeks of the quarter, exceeding company expectations. enCore plans to systematically increase the number of injection and production wells at Alta Mesa through the end of the year and into 2025, which is anticipated to drive substantial revenue growth.
However, the start-up costs at Alta Mesa contributed to the increased expenses that widened the company’s gross loss. Additionally, the operational start-up inefficiencies at Rosita further compounded these challenges, pushing the company’s expenses to $16.1 million for the first half of 2024, up from $14.7 million in the same period of 2023.
Despite the challenges, enCore Energy remains optimistic about its future prospects. The company anticipates significant revenue growth in the second half of 2024, driven primarily by increased production at Alta Mesa. enCore aims to reach an annual production rate of one million pounds of U3O8 by 2025.
The uranium market itself is experiencing volatility, driven by a combination of heightened demand for nuclear power—spurred by global efforts to reduce carbon emissions—and supply constraints due to regulatory and geopolitical factors. The spot price of uranium was in the low $80s per pound as of June 2024, down from a twelve-month high of $115 per pound, but still reflecting strong demand fundamentals.
In addition to its current operations, enCore is advancing its Upper Spring Creek Project, which is expected to supply additional plant feed for the Rosita facility. The company has submitted the necessary permit and amendment applications and plans to begin drilling and well installation by the end of the third quarter of 2024. This project is slated to start production in the first half of 2025, further enhancing enCore’s production capacity.
enCore Energy last traded at $4.49 on the TSX.
Information for this briefing was found via Sedar and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
