Title: enCore Energy's Growth Strategy | Bill Sheriff
Show: Jimmy Connor (YouTube)
Guest: Bill Sheriff (executive chairman, enCore Energy — NASDAQ/TSXV: EU)
Date: 2026-SEP-14
URL: https://youtu.be/fCusValE3MU
Length: 19:10
Note: Auto-caption transcript; fillers (um/uh/you know) and stutters removed, wording otherwise verbatim.
      Caption garbles left as-is in the text below — map them when reading: "Encore" = enCore;
      "Altameesa / Altamea / Altima / Altameasa / Alta Mesa" = Alta Mesa (Texas); "Altima East / alultimaca yeast" = Alta Mesa East;
      "TCQ" = TCEQ (Texas Commission on Environmental Quality); "Dewey Berdo / Dewey Burdo" = Dewey-Burdock (South Dakota);
      "fast 41" = FAST-41 (federal permitting program); "UR Energy" = Ur-Energy (URG); "Camo" = Cameco (CCJ);
      "Dennis" = Denison Mines (DNN); "UC" = probably Uranium Energy Corp (UEC); "Exon" = Exxon;
      "halo" = HALEU (high-assay low-enriched uranium); "heap leech" = heap leach; "colored contract" = collared contract;
      "comeomaosse" = comatose; "admirable vingi" = admiral of a dinghy; "McKenna" = McKinney, Texas; "Hutchkins" = Hutchins BBQ.
      Speaker turns: interviewer lines are marked ">>" where the captions marked a change of speaker.

(00:09) Bill, thank you very much for joining us today. Encore Energy is an ISR uranium producer with two central processing plants in South Texas. I want to ask you about Texas. It's one of my favorite states. Good. >> But you're not producing uranium at this time. You're waiting on some permits, but why don't you take us through the encore story? >> I'll do that. Thank you, Jimmy.
(00:27) I appreciate you having time for us here. We've been in Texas for a number of years. One of the first ISR producers of the new generation, if you will, and we have succeeded in exhausting our first wellfield at Altameesa. Pulled over a million pounds out of it.
(00:45) And unfortunately, we had a bit of a snafu on permitting. It set us back three or four months. Our second quarter that just came out, we indicated that we would be out of production while we're waiting these permits. The same time it gave us time to finish construction on three additional projects and two of those are at Altameesa expansion wellfields inside Altameesa, our premier asset, and one of them is Upper Spring Creek which is a brand new satellite project which will be feeding the Rosita plant and that one we should get
(01:16) a bit of production this year with any luck. We're moving, since our bottom of the trough expectations that were announced in Q2 things are moving better with the TCQ. Can't say what date we'll be in production, but those timelines we expressed are probably a bit on the pessimistic side.
(01:36) We're working diligently. They are as well. Very cooperative spirit now. Our CEO visits the TCQ regularly now and instead of not necessarily talking at each other, we're talking to each other and that's making a big difference. So we're quite optimistic that 27 will be a good year for us and we've probably seen the trough of our issues here.
(01:57) >> You always got to look to the future. So when you talk about permitting, you're talking about in the state of Texas, >> correct? It's one of the few states that are what they call agreement states. Back during the 1970s, there was a huge expectation for major growout in the nuclear industry, much as there is now.
(02:18) And as a result, the NRC simply said, "We can't handle this amount of business." We're talking about 300 new reactors at the time. Well, along came Three Mile Island and a few other incidents. So that dream had, I like to say, been delayed for about 50 years because we're right back at the same place looking at an immense tripling of nuclear energy over the next 24 years which is probably a bit ambitious but nonetheless I think we'll see a doubling which into a very tight fuel market is a profound change and the US being the world's
(02:48) largest consumer of electric nuclear power and expected to be so at least through the end of this decade. At some point China may eclipse us. It's certainly going to be a good horse race. And we're highly dependent upon imports and will likely be so for some time. So it's an exciting time.
(03:07) >> And I'm glad you brought that point up. As you mentioned, the US is the largest consumer of uranium, consuming 45 to 50 million pounds a year, but it only produces 3 million. >> And three is a brand new number, and I don't think we've quite gotten to three. We may have this year, but it's very close.
(03:23) Two million of that roughly has come out of ISR between roughly two, two and a half producers. It's been a bit of a race between ourselves and UR Energy as to who's got the lead. And at the moment since we're idled and doing some maintenance work, they're going to eclipse us now. But we'll be back in the fight next year to see who's the biggest and best hopefully.
(03:46) Pretty small group, so we all get along and try and help each other. It's good healthy competitive environment. >> And just on that point, what do you think the federal government can do or state governments can do to stimulate uranium mining? >> Well, the nice thing about the agreement status is you don't deal with the NRC.
(04:04) So, in Wyoming and in Texas, you don't deal with the NRC. It's one window permitting, if you will, and you're dealing with the state agency. And Wyoming and Texas are both quite energy focused states, so they're quite amenable to moving things forward. Our areas of preferred operation, of course. The federal government had been maybe the long pole in the tent, if you will, historically in terms of permitting, but the fast 41 program, which got its first starts under the Biden administration and then
(04:32) was bolstered considerably by the Trump administration, works. Most of the time you hear about these government programs and they're nice and they sound good, but they don't really work. This one's remarkable. And in fact, our own Dewey Berdo project, which is over 20 million pounds by the time we're done with it, looking at the satellite deposits in the area, is a classic example.
(04:54) It was mired in federal permitting for well over a decade, in fact, 15 years. And it would make some, one step forward, three steps back. And once we got into fast 41 this last year, under a year, and we were fully permitted. So, on the permitting side, they're doing exactly what they need to do.
(05:12) On the funding side, I believe they're also doing exactly what they're needing to do, and that's working on the conversion and enrichment, other parts of the fuel chain, simply because the uranium side, we don't need the financial help. We just need people to get out of our way and let us do our business. And the bottlenecks in the industry really are converting it to UF6 gas and then enriching it to the five or 6% now in some cases for reactor use and ultimately to close to 20% for the halo for the SMRs that we're seeing.
(05:42) Come on. >> You mentioned Dewey Burdo. That's one of your growth projects in South Dakota and it's a very large project, 20 million pounds. Maybe you can give us an update. >> Well, it's a multi-decade project for us. So it's one of two major projects that we have coming along. We have a whole pipeline of other assets, Gas Hills and a few others, but the ones we're really focusing on are Dewey Berdo in South Dakota where we did recently secure our license through 2046 with the NRC, permission to start
(06:07) construction with the BLM and sign off with the EPA. That was what was done in under a year, which is here. Again, I'm still amazed every morning that that's happened. So we see that going on for some time. We did get into state permitting this year. We've still got about a year, year and a half of state permitting, but we're optimistic that we'll see some production in 28.
(06:29) Can't guarantee that of course till it happens, but that's what the timeline suggests can be done. Working hard on that. Our second major growth project is literally right next door and adjacent to our Altamea flagship operation in Texas. And Altima is what's been our key producer up to date.
(06:49) Rosita's added some and both of these are going to take on new importance as the Altima East is simply an extension to the east of the productive wellfields that have been exploited to date, over 5 or 6 million pounds at Altamea when you take into consideration our earlier operation which wasn't ours but was done by a predecessor a decade ago. So when you look at that, the facilities there, our capex will be minimal but it is a separate piece of property so it will involve additional permitting.
(07:17) We're optimistic here again that we can see our timelines through and that'll contribute to 28 as well. We've already put about 300 holes into it. Happy with what we're seeing and we'll be drilling that to continue to lay out the exact location of these roll fronts through the first quarter of 27.
(07:37) And that one, the early stages of permitting have already begun on that as well. So between it and Dewey Berdo, we're looking towards a very healthy 28 and beyond. >> And because you will be a uranium producer, maybe you can speak about your sales strategy. >> Well, we were one of the first uranium producers and like I say, even though we've got a three-month hiatus here basically while we're completed on one wellfield, waiting on three others, that being two at Alta Mesa, Wellfield 3 extension in Wellfield 8, as well as the brand new satellite
(08:08) facility at Upper Spring Creek. It's always been our strategy to be no more than 50% contracted and we got a bit over ambitious in our early days and contracted a bit more. And so we're looking now for things in 2030 and beyond. But I would say that almost all of our contracts are floors and ceilings.
(08:31) So we've got a guaranteed minimum price. And we also have some ability to take advantage of higher prices on the upside. So a typical colored contract will see your floor come in somewhere near spot and the upside come in some 30 or 40, sometimes 50% higher on the upside and it's also set for inflation adjustments every year.
(08:55) So when you start looking at 3 to 5 years, you've got quite a healthy upside even on these contracts while it's still enjoying a certain amount of income on the base level. >> Bill, let's talk about your balance sheet now. You recently press released a shelf for $750 million, $250 million of which was an ATM.
(09:13) >> That's right. >> What's the use of proceeds? >> Well, we're currently with over 70 million in liquidity. So, we don't really quote need the money at this point, but I've long been an advocate for the absolute desire, maybe screaming out, if you will, for mergers in this sector. We've got a handful of companies in the US, another handful if you look worldwide that are all a million, maybe going to be a 2 million pound a year producer.
(09:38) But in order to get to where the Citadels of the world can purchase you, the big hedge funds, the big generalists, you've got to be bigger. And right now, there's only a couple of companies out there, Camo and maybe Dennis now and UC, that have a market cap big enough for these guys. They want to be able to write a $50 million check and not become an insider.
(09:58) And as a result of that they need a bigger company. That's one of the main motivations but they continue well beyond that into the operational phase. Simple fact of the matter is there's limited expertise in the ISR field. After all we're operating underground chemistry sets in our case and in most of the cases in the US it's using benign oxygen which is a very, very environmentally friendly process.
(10:20) But nonetheless there are very few chemical engineers and operations people that are familiar with doing this. Sure, we're training more, but there's a lag time. So, you really need to team up and try and get to that four or 5 million pound a year. One of the other major attractions of the merger story is of course it gives you better financial strength which results in your cost of capital, your ability to achieve capital, gives you a bit of a premium in terms of your ability to set contract prices because
(10:50) you're not a single source or maybe even in our case a double source producer but producing from a number of assets. So there's security in your ability to deliver into the contract. So there's many, many reasons that we need to be merging and I can't think of a single reason we shouldn't be other than perhaps sometimes the egos get in the way and sometimes people would rather be a admirable vingi than first officer in an aircraft carrier.
(11:18) So we're agnostic to that. We've been in the business since, over 20 years now, and not with this company, with a string of companies and the shareholders own the company and we've got to do what's best for those. So the rec merger proposal comes along, we'll consider it. But in the meantime, we intend to be fairly aggressive in looking for candidates to merge with ourselves while not ruling out the other way around.
(11:44) >> You raised a very interesting point because we've heard this from BHP, because the uranium sector is so small that's why they're not getting involved, because it doesn't have an impact on their balance sheet. >> That's right. If you look at the big oil companies, which incidentally, I believe will be back.
(12:03) Every utility and every oil company had a uranium subsidiary. And not every one of them, but the vast majority of them did. In fact, most of the uranium that's on the books now that was discovered in the 70s was discovered by Gulf Oil, Exon, Philips Petroleum, the list goes on, and they were quite successful at it.
(12:20) And a whole generation or two of management's come and gone, and board members. So I think they'll have a fresh taste in their mouth when they evaluate the BTUs per dollar and I mean Exxon could buy the entire industry and have petty cash left over. I think it's such a small group and such a small market cap that it invites that sort of entrance into the market from other energy companies.
(12:47) So I think they'll be here within a couple of years. >> Now, I know you know the US domestic uranium market very well, and I'm curious to get your views on this. The DOE issued a press release recently. They're looking for some uranium. Why don't you give me your thoughts on that? What do you think it means for the sector? >> I think it's going to have some untold benefits that are coming.
(13:11) Essentially, they ask for not a request for proposal or not a firm bid, nor are they firmly contracting, but really an indication of interest. It's a request for information and they're looking to secure 4 million pounds a year from 2030 through a couple of decades and longer and it has to be US source material because it's for the defense program and that's legislated into law.
(13:34) That cannot be foreign material nor can it be a US person that refs material and brings it in. It has to be produced in the US and that limits it to a very small club. Last fuel buying program for the US government, there were five companies that were allowed to participate. Maybe even fewer this time.
(13:53) And so they want to know what our ability is to produce. 4 million pounds doesn't sound like a lot, but the US is producing just barely three or maybe not even quite three. And it's all contracted material. So there is no excess capacity right now. We're all in a major growth phase. And 2030 may sound a long ways off, but it's three and a half years away.
(14:13) And so to even be able to have the industry have that 4 million pounds available, there's going to have to be some acceleration of existing programs. And we touched briefly on the fast 41 program. So the feds are doing their part on permitting. Some of the states need to step that up a bit.
(14:33) Some of them are very good, but there's certainly a push back against conventional mining, open pit, heap leech, not quite as environmentally friendly as ISR. So, to get there, I think one of the things that we may be looking at, and this is just pure speculation on my part, is the Defense Production Act, certainly would streamline getting the mines into production and would, I don't want to say bypass, but certainly circumvent a significant amount of opposition in some of the states that are not as friendly towards
(15:01) uranium extraction because some of our bigger reserves and resources are in other states that are not so energy focused. And the US government has an awful lot of incentive and if it gets quite past the point of incentive, a lot of ability to push these things through.
(15:19) They certainly have before and I think we may be seeing that coming because that's a need that's not flexible and the defense department needs it. We're gonna produce it and so I think you're going to see some movement and can't exactly predict how that's going to be but I think it'll be surprising and I think the markets clearly was excited the first day or two because that was a request for proposal but the request for information I think is just as strong and I think it's going to draw a real spotlight on
(15:47) the fact that we do have this bottleneck and it's going to have to be solved as much by the government as it is by industry. So I think it's a big profound difference for us domestic producers. >> Interesting comments. Bill, as we wrap up, maybe you can just summarize what investors can expect in terms of news flow from Encore Energy in the coming months.
(16:08) >> Sure. Well, I think once we've got a very firm line on our permitting for the three new production areas, Upper Spring Creek, which is built and paid for, by the way, it's already expensed. It's simply awaiting a permit to quote flip the switch. Our Wellfield 3 extension at Altameasa, same way, it's built, piped directly into the plant, essentially no capex, sustaining capital is to drill the wellfield out, but it's ready to go, waiting on the permit, flip the switch. And then Wellfield 8 is
(16:36) about half expensed and about 3/4 built. So these significant sources of production without any additional cash are going to make a pretty good impact when we come online later this year, first part of next. And in addition to that, our alultimaca yeast that I mentioned, we've got a very aggressive drilling program there.
(16:58) We're probably about 300 holes into it now. I think we've announced the first roughly 150 holes. So we're a little behind on announcing those. Those will be coming out. Plus, we'll be continuing to drill aggressively with four or five, maybe six rigs through the first quarter of 27. So it's going to be an exciting year.
(17:15) And quite frankly the spot market's been basically comeomaosse this year. I think it's gone down to close to zero volatility after flying quite high for a few years. So with the uranium price having been rather stagnant over the last year, it's been basing and while it's created a bit of disappointment, lack of news and lack of excitement, it's a very healthy market trend.
(17:39) I believe we're now looking at, while we've had a flat and totally unremarkable spot market for the first time in five or six years, the long-term contract price is now at an all-time high. And it's done so very quietly because unfortunately pricing in uranium is not terribly transparent. The only daily indicator that most of our investors have is that spot price which can be terribly misleading as it has been on the way up and it has been in its lackluster performance this year because most of us sell on contract one way or another, to one degree or another,
(18:11) and that price is doing quite well. So I'm looking forward to a great 27. >> Bill, one more question before we wrap it up. Because you have operations in Texas, you spend a lot of time there. So, I'm sure you love barbecue as I do. What's your favorite barbecue place in Texas? >> It's a requirement.
(18:28) Well, our operations are based in Dallas and so there are no bad barbecue places if they're open more than 3 months. They just go by the wayside cuz there are a lot of them. But our personal favorite is Hutchkins. It's in McKenna where we have a house and spend a great deal of time. And it's great.
(18:47) Just don't get there for lunch because the line's quite long. Dinner is a much more suitable time to get in and relax and enjoy it. But fabulous stuff. I encourage you to try it. >> I'll check it out the next time I'm there. Bill, thank you very much for making the time.