3. Ur-Energy Inc. (NYSE:URG)
Number of Hedge Fund Investors in Q1 2024: 18
Average Analyst Share Price Target Upside: 159.17%
Average Analyst Share Price Target: $3.11
Ur-Energy Inc. (NYSE:URG) is a uranium mining company with operations in Wyoming. This means that its performance is contingent on uranium reserves, annual production, and the general health of the uranium industry. The last bit is particularly important since Ur-Energy Inc. (NYSE:URG) relies primarily on selling uranium to generate sales. Its lead mining facility is Lost Creek, which has a life of ten years and the capability to produce 2.2 million pounds per year. Ur-Energy Inc. (NYSE:URG) also benefits from clean energy initiatives in the Inflation Reduction Act which seeks to maintain more than 90 nuclear reactors in America. Dril-Quip, Inc. (NYSE:DRQ) also benefits from the fact that it does not have to depend on uranium imports. Recent trends in geopolitics, spurred by the Russian invasion of Ukraine have led to sanctions against Russian Ukraine imports. This opens up a large market for Dril-Quip, Inc. (NYSE:DRQ), which might also benefit from a growing interest in nuclear power and government spending on clean energy.
Another key aspect of Ur-Energy Inc. (NYSE:URG)’s performance is off take agreements, which help ensure a stable demand for its products. Here’s what management had to say on this front during the Q1 2024 earnings call:
“But the existing production in the near-erm production from our two flagship properties will come from Lost Creek, which is in production and Shirley Basin, which we’re entering construction now. So, starting with Lost Creek, it’s been in production now for over 10 years.
And in that time period, we have produced nearly three million pounds of U308. U308 is the chemical formula for a yellow cake, which is the product we produce. We recently made the decision to restart production and we’ve been bringing new Header Houses online. Again those Header Houses are the new production areas and we were able to make that decision to go and to ramp production back up, because of the contract book. And I’ll be talking in some detail about our contracts. But suffice it to say early on we had three contracts in place that gave us the faith that it was time to ramp production back up. We’re in the process of that. And since then we have signed three more offtake agreements that total nearly six million pounds plus or minus flex.
That’s over a time period of now through 2030. We also have one of those contracts that has an option for extending for three additional years. We have a very good resource at Lost Creek, nearly 12.7 million pounds of the measured and indicated resource. In addition to that, we have a little over six million pounds of inferred resource, and I’ll make a forward-looking statement here, but we do believe we have considerable opportunity to expand that resource through exploration in the future.”
