EnCore Energy Corp has announced the first shipment of uranium from its Rosita Central Processing Plant in South Texas, which was returned to operation in November last year. The company also announced the signing of its fifth long-term supply contract.
The Rosita Central Processing Plant (Image: enCore Energy)The restart of the Rosita plant - which last produced yellowcake in 2008 - is the first step in enCore's South Texas in-situ leach uranium production pipeline strategy. The plant - about 60 miles from Corpus Christi, Texas - has undergone refurbishment since enCore acquired it in 2021. It has a capacity of 800,000 pounds U3O8 (308 tU) per year and is designed to process uranium feed from multiple satellite operations in the South Texas area.
EnCore said the initial shipment of uranium from the Rosita plant is expected to be delivered to a conversion facility next week. "This is followed by delivery of uranium to the utility customer under our sales contracts," enCore added.
The company has now executed its fifth commercial uranium sales contract, with a fourth US utility with deliveries between 2026 and 2032. enCore said the terms of the contract reflect the spot price at the time of delivery subject to pricing collars that ensure its revenue stream and allow for potential upside.
With this latest contract, enCore's existing commitment has increased to 4.25 million pounds U3O8 through to 2032, which it says is well under 50% of its planned production.
"This contracting will assure continuous revenue to support enCore's longer range growth plans along with steady production increases as a key component of enCore's production strategy," the company said.
In 2021, enCore announced two term supply agreements, one with UG USA and one with a US utility. In 2022, it announced a third term supply agreement with a US utility. It announced a fourth sales agreement with another US utility in February 2023.
enCore noted that three of the contracts provide the optionality to extend with an additional 1.65 million pounds U3O8 to 2032.
"To support our production pipeline and development plans, enCore has implemented a uranium sales strategy providing the company with a base level of projected income while preserving significant ability to realise opportunities in the spot market," enCore said. "This strategy assures that enCore will have committed sales to support the capital necessary for construction of new projects, while maintaining flexibility to be opportunistic as market conditions continue to change in favorable ways."
EnCore's utility contracts are all spot related with minimum floor and maximum ceiling prices that are adjusted upward annually for inflation. Minimum floor prices are set at such levels to provide the company with a comfortable margin over its expected costs of operations in Texas, while giving it participation in anticipated escalations of the price of uranium.
EnCore said it will "continue to assess opportunities to secure future term agreements that will support its continued project and production growth strategies".
"With Rosita under way, we are now moving aggressively to re-start the Alta Mesa Plant which we expect will commence production as planned in Q2/2024," said enCore CEO Paul Goranson.
Educational programmes
EnCore has also announced the launch of two programmes - the Education Society and Get the Edge from Education Scholarships - to help develop future leaders in its sector from the communities where it operates.
The Education Society is designed to provide youth with a variety of educational tools to develop future leaders in the sector by focusing on sustainable and transferable skills that benefit both the industry and communities where it operates.
The Get the Edge from Education Scholarship Programmes are designed to provide financial assistance to students who demonstrate exceptional academic achievements, leadership potential, and a commitment to making a positive impact in their communities.
The two scholarship programmes will be available to students residing in counties in proximity to enCore projects and to immediate family members of the enCore team.
"One key challenge of this industry is the age gap between the people we have now, and the people we need in the future," Goranson said. "We also see the impact we can have on our local communities who need job opportunities to keep our youth in their home communities.
"The Education Society is our way of providing educational opportunities and crucial economic growth in the communities where we operate and is our privilege to develop minds, enrich lives, and create a brighter future for our youth."
(20min delay)
