ENCORE ENERGY CORP. FORM 10-K (ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2024)
Encore Energy Corp. filed its annual report for the fiscal year ended December 31, 2024, with the Securities and Exchange Commission. The company reported a market value of $726.8 million as of the last business day of its most recently completed second fiscal quarter. As of February 25, 2025, there were 186,261,281 shares of the company’s no-par-value common shares outstanding. The report includes financial statements and notes, as well as information on the company’s management’s assessment of its internal control over financial reporting. The company is a large accelerated filer and an emerging growth company, and it has elected not to use the extended transition period for complying with new or revised financial accounting standards.
Company Overview
enCore Energy Corp. is a uranium production company focused on producing uranium in the United States. The company owns and operates three in-situ recovery (ISR) uranium processing plants located in Texas. enCore’s strategy is centered around its two fully licensed Texas processing plants - Rosita and Alta Mesa.
The primary use of uranium is to fuel nuclear power plants for the generation of carbon-free electricity. According to industry data, there are currently 440 operable nuclear reactors worldwide, with 65 new reactors under construction and an additional 86 reactors on order or in the planning stage. However, worldwide uranium production is not keeping up with demand, with the gap being filled by stockpiled inventories and secondary supplies.
Financial Performance
During the fiscal year ended December 31, 2024, enCore completed eight uranium sales totaling 720,000 pounds U3O8 at an average sales price of $81.02 per pound. The company used 580,000 pounds of purchased uranium to meet its delivery obligations, with the remaining 140,000 pounds sourced from its own production.
As of December 31, 2024, enCore has 4.455 million pounds of U3O8 in committed uranium sales from 2025 through 2029, with an additional 1.025 million pounds available as optional deliveries. This sales portfolio provides a base level of projected income while allowing the company to capitalize on favorable market conditions.
Operations Update
enCore’s strategy over the next three years is focused on its Rosita and Alta Mesa processing plants in Texas. The Rosita plant has an 800,000-pound U3O8 per year production capacity and will serve as the central processing site for several nearby projects. The Alta Mesa plant has a 1.5 million-pound U3O8 per year capacity and was restarted in June 2024 after being acquired from Energy Fuels.
During 2024, the company commenced uranium extraction operations at both the Rosita and Alta Mesa plants. Combined, the two plants produced 236,891 pounds of dried and packaged U3O8. However, the company experienced some operational challenges, including lower extraction rates due to wellfield pattern inefficiencies and limited geophysical data.
Strengths and Weaknesses
Strengths:
- Diversified portfolio of uranium sales agreements with various pricing structures to manage market volatility
- Ownership of multiple licensed and operational ISR processing plants in the U.S., providing production flexibility
- Acquisition of the Alta Mesa project, which expanded the company’s production capacity and resource base
- Favorable industry trends, including renewed support for nuclear power and growing demand from the technology sector
Weaknesses:
- Operational challenges at the Rosita and Alta Mesa plants, leading to lower than expected production
- Reliance on purchased uranium to meet delivery obligations, impacting profitability
- Potential impact of trade restrictions and tariffs on the company’s operations and supply chain
Outlook
The outlook for the uranium market remains positive, driven by several key factors:
- Net-zero carbon emissions initiatives are increasing demand for reliable, carbon-free nuclear power generation.
- Technology companies are securing dedicated nuclear power for their data centers, further boosting demand.
- Trade restrictions, such as the U.S. ban on Russian uranium imports, are creating supply uncertainty and supporting higher prices.
However, the industry also faces challenges, including transportation issues, port closures, and the potential impact of tariffs on cross-border trade. enCore will need to navigate these obstacles while ramping up production at its Rosita and Alta Mesa plants to capitalize on the favorable market conditions.
Overall, enCore is well-positioned to benefit from the resurgence in nuclear power, with its diversified sales portfolio, operational processing facilities, and growing resource base. The company’s ability to address its recent operational challenges and execute on its production plans will be key to its future success.
