Good afternoon, everyone, and thank you for joining the H.C. Wainwright 27th Annual Global Investment Conference. I'd like to welcome this session's speaker, Matt Gili, President of Ur-Energy. Take it away, Matt.
Thank you very much. So, all right, good afternoon, everyone. You know, I'm Matthew Gili. I'm the newly appointed President of Ur-Energy, and it is a great pleasure to be speaking with you this afternoon. All right. Who is Ur-Energy? Okay. Ur-Energy is a U.S.-based producer, developer, and explorer for uranium, based in Wyoming, listed on the New York and Toronto Stock Exchanges. We're one of only three companies that are currently producing and selling uranium in the United States, and our production is expanding rapidly.
The first property I'd like to discuss with you today is Lost Creek. Lost Creek has produced approximately 3 million lb since production started in 2013. The uranium resources at the site are over 12 million lb in the measured and indicated category and over 6 million lb in the inferred category, with 13 years of remaining mine life. The property was placed in care and maintenance during a period of low uranium prices by Ur-Energy, and we've now restarted the operations. 2025, year to date, through the second quarter, we've produced just over 200,000 lb of U3O8.
The mine capacity at full production is 1.2 million lb per year. Second quarter operating costs totaled $42.83 per pound, and our average contract price for 2025 is $61.56 per pound, with our 2025 total sales projected at 440,000 lb, and at our Shirley Basin project, we're well advanced in the construction of this mine, with production startup targeted for early 2026. Shirley Basin has 8.8 million lb of uranium, all in the measured and indicated category. Full capacity at this property is 1 million lb production per year. As stated, construction at Shirley Basin is well advanced.
Historically, previous miners had produced over 51 million lb from this basin from 1960 to 1992. Historical buildings on site have been refurbished for our use. Five drill rigs are on site, currently drilling out the well field for the first mining unit, and the contractor for the processing plant has poured the foundations and is starting to install equipment. So, Scott showed this picture in the previous presentation. This is what an in-situ uranium mine looks like. Those brown drums you see right there are the tops of the wellheads.
And so in-situ mining, what we do is we extract uranium from the ground without needing conventional underground or open-pit mining. Oxygenated water is pumped underground. The uranium dissolves in this oxygenated water, and then we pump the solution back into our processing plant for conversion to U3O8. The next three slides are about supply and demand, and I'm not going to go through them in a lot of detail. If you're in this meeting, you've probably already done your analysis, and you're probably already sold on the supply constraints and the demand surge.
So currently, in the U.S., nuclear supply is 20% of the electricity consumed. Worldwide, there are 440 nuclear reactors in operation, with another 66 in construction, all indicators for growing demand. On the supply side, it's really a story of geopolitical risk. Russia currently supplies 20% of the enriched uranium for nuclear power plants. Kazakhstan produces approximately 46% of the global supply of U3O8, the same product that we produce at our Wyoming operations. And then very specifically for the U.S., the support for nuclear is growing.
The President has signed four executive orders supporting the rapid expansion of the U.S. nuclear industry and the consolidated budget, allocated $2.7 billion to carry out the Nuclear Fuel Security Act, which is designed to enhance the domestic fuel supply in the U.S. This is Lost Creek property. I'm going to go into a little bit more detail. Currently, we have 13 years of mine life, and all the resources on the property can be piped and treated in our centralized plant on site. Another key attribute for Lost Creek is our royalty environment.
So our total royalty burden is less than 1%, and currently we're in a zero royalty regime. We'll get into a 1% royalty sometime in years three through six. Again, I just keep drawing. There's some more detail on the properties. What I really want to draw to your attention is that photo in the bottom right. That is a drum of yellowcake. That is what we produce and sell. We sell it by shipping it to a conversion facility in Illinois, where the title is transferred to the customer. It's benign. I mean, it's uranium, but it's in a metal drum. It goes on a truck.
We ship it to Illinois. At this stage, we're all dealing with things that are relatively easy to manage and very safe. Scott touched on this. This is what an ion exchange column looks like. It looks just like a big water softener in your house. The same process happens. In your water softener, the ion exchange is between calcium and magnesium. In the ion exchange column for here, it's with uranium. And this is what developing a well field looks like. This is a different property than Lost Creek. Lost Creek is in the Great Divide Basin. This is in the Shirley Basin.
It's about a two-hour drive away from Great Divide Basin. Both of them, Casper is central to both. A little different topography here. You see the windmills in the background. It's an energy basin. But with that in mind, this is what it looks like to develop a well field. In ISR mining, the mining is the well drilling. So we treat all of the well drilling as an operating cost, as we would with stripping in an open-pit mine or doing development in an underground mine. So when you look at our cash costs, our cash costs include drilling all of these wells as a cash cost, not as a capitalized cost.
That is one of our technicians doing a piezometer reading. We're kind of living in the set of Yellowstone here. This is what header houses look like. So when you have a cluster of your wells, those wells feed into the header houses. The header houses then manage the flow between the fluid you're injecting in the injection wells and the fluid that you're pumping out of the production wells. The fluid coming out of the production wells gets routed into the plant for ion exchange. And then once the ion exchange has occurred, the water is returned back to the header houses, oxygenated at the header houses, and goes back underground.
So the third part of our strategy, we talked about it here. Lost Creek is in production. Shirley Basin is in construction going into production. Here's our exploration programs. Lost Soldier, North Hadsell , and Lost Creek South are the properties that our exploration activities are focused on in 2025. Lost Soldier and North Hadsell are approximately 10 miles north of Lost Creek Complex, and that's easily serviceable as a satellite facility. Lost Soldier does have a previously completed resource done for open-pit mining, and that is a resource of many million pounds. That resource is not applicable to in-situ mining.
So we're doing the data collection on the hydrology right now so that we can see how HIF and how much of that resource will be applicable into our ISR mining process. So Ur-Energy, leading the green revolution. We are a current producer and seller of uranium into the international uranium market. We're based out of Casper, Wyoming. We use in-situ technology to extract uranium from the ground. And in that process, we recycle 99.3% of our water. The usual suspects on both of our investors and our analyst coverage. Solid growth story in strengthening the uranium market.
We're well-financed. We closed July, pardon me, with $49.1 million. We do have long-term contracts. You see from the quarterly press release, about 45% of our production through 2023 is contracted already. Those contracts have occurred at different points in time. So each point in time, there's different terms for those contracts. The nature of the contracts are changing. They're much less focused on fixed price and more focused on having a relationship to the market with a floor and ceilings in place. Our ramp-up to commercial production is well underway. We are staffed up at Lost Creek.
We are staffing up at Shirley Basin. The problems that we encountered last year with getting drill rigs and drillers in place have been alleviated, and now we're moving into making precipitate. That's my presentation. Thank you very much. Yes, sir.
Clarify, Lost Soldier, are you referring to the oil and gas company or the field?
The field. Lost Soldier is the name that we call that property. It's this property right here.
So is that south of Jeffrey City?
Yeah, so Jeffrey City, I think, is south of Jeffrey City, but Jeffrey City is more to the west as well. It's in the Great Divide Basin, though, so it's south of Green Mountain. Yes, sir.
The additional production, maybe the slide after this, walk through it. So the additional production that's coming on, can you talk about some of the supply agreements that follow in the material, any changes in pricing, how you're looking at that? Is there a price floors in these contracts? Maybe kind of give a sense on what the visibility.
100%. Okay. And I'm talking in vague terms here. We have disclosed our average selling price for 2025, but we haven't disclosed it going forward. Those contracts that we are delivering to right now were signed in 2022 and 2023. Those contracts were largely fixed price, and that fixed price at the time was in the high $40s, low $50s. There's an escalation that's built in. So in those days, the contracts were very focused on fixed pricing with an escalator. What you're seeing is between that time and now, and I was listening to a presentation in Casper at the SME event there. In 2021, the term price was about $40.
Right now, the term price last year was about $60, and now the spot price is in the high $70s. So you're seeing this increase in the price. The contracts that are going out now, the RFPs, we get an RFP from a utility, generally a utility, and they ask for pounds delivered in the future, usually three to five years out in the future, and they ask us to propose what are the terms going to be. Generally speaking, right now, ourselves and our peers in the industry are doing a mix of fixed price and market-related price. Let's say it could be 50/50, fixed price and market-related price.
The fixed price seems to be in the low 70s right now with an escalator, and the market-related price is related to the market, of course, and then they put in, usually you agree to some sort of floor and ceiling just to cover your risk on both ends, so you're seeing that move towards, we call it a hybrid. At least Ur-Energy, we call it a hybrid. It's not fixed, but it's not all market-related. It's a blend of the two. All terms are negotiable. This is very much a site-by-site, customer-by-customer negotiation. From our standpoint, we're producing.
We needed to lock in those contracts to ensure that we were going to be able to sell our pounds at a cash-positive position. That's the strategy that we took.
So what you're saying is that these prices are a lot lower than where the fixed price is going to be in the future.
Exactly. Because these contracts were signed in 2023. You can see even more color if you go into our quarterly presentation. It talks about the details of when those contracts were signed, what the term price was at the time of those contracts being signed. So yeah, if the spot price is going up and you're in our position where you've made commitments to sell, you're going to be selling at probably less than spot for that portion that you fixed. Well, no, I mean, it depends. I wouldn't say that at all. I'm making generalities about what you're seeing a lot in the market right now with regards to contracts.
Okay. And then lastly, the analyst forecasts, do you think that they're accurately reflecting the current environment and the strategy of the company in terms of pricing?
You mean the analysts specifically for Ur-Energy? I think they are. I mean, I think the analysts do a good job of understanding the Ur-Energy story. Let's be fair. In simple terms, the Ur-Energy story is pretty simple. We focus on ISR mining in Wyoming. We've got three properties, one in production, one in construction, and one in exploration. We have right now an existing plant capacity of 2.2 million lb a year as the upper level for our plant. All of our material that we produce right now goes through the centralized plant, and Lost Soldier, if it HIF and when it comes into production, will feed into that centralized plant as well, so I think they do a good understanding.
When you have that model there, then it's pretty much just how much does it cost per pound to produce the uranium and what then is going to be the selling price for uranium. That's where I let the analysts do their math. We do our own internal math, but the rest of it's coming straight out of our public reports. Yes, sir.
You made mention earlier, as I was walking in, you just joined the company.
I did.
Okay. So going through your decision process, when you look at the valuation of the stock now versus the opportunity, how does that cost?
So 100% on my side, I see a company. One, it's a group of people that I'm really proud to be associated with. I like what they're doing. I mean, as an engineer, it just makes so much sense to be mining uranium and producing electricity with uranium versus my brother's in coal, and he's a fantastic coal miner. You're trucking giant millions of tons of coal across America. That's good. From our side, we're transporting relatively small amounts of a substance across the world, and it's able to produce a lot of energy. So I see that as an engineer, that's just logical. So I see the vision.
I see the world is starting to appreciate that you can very simply create power from nuclear safely. I see that vision. What I also see is the supply, right? So who else is coming online right now? And the geopolitical risk is there. The world is getting a little more messy. Right now, the United States and Canada and Australia are kind of the allied producers. And there's not a whole lot of new production coming online right now. At the same time, I see that there's a lot of emphasis on U.S. production of uranium.
So I would look forward to a time when there's a slight premium applied to the U.S. production of uranium. That's just a projection. That's just a thought. I'm not forecasting forward on that.
But if you're with that thought in mind, where do you see the stock price and adding value in the stock price when you're making your decision?
Look, when I'm making my decision, I always go to earnings per share. I mean, in the end, it's always about earnings per share. So when I look at the earnings per, I think the appreciation of the share price is going to come from us demonstrating our reliable ability to produce more poundage. And with our operating costs remaining, I'm very comfortable with where our operating costs are going, and I see price increasing. So I put those three things together, and I just see an increase in our earnings per share.
When you're selling the cost.