Inventory Derivative Obligation |
6 Months Ended | ||||||||||||||||||||
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Jun. 30, 2026 | |||||||||||||||||||||
| Inventory Derivative Obligation | |||||||||||||||||||||
| Inventory Derivative Obligation |
On November 20, 2024, we executed an agreement to borrow up to 250,000 pounds of U3O8 from a counterparty. The agreement was for one year and called for interest payments of 5.25% per annum on the value of any uranium borrowed. In addition, there is a requirement to pay 1.5% per annum interest on any pounds not borrowed. The uranium loan value and interest expense calculations are based on the current average spot price. At the end of each period, the uranium loan is subject to mark-to-market adjustments to reflect the current loan valuation. In addition, the Company was required to post a minimum deposit of $15 per pound on any pounds borrowed. If the average uranium prices increase above certain thresholds, an additional $5 per pound will be deposited with the counterparty. Conversely, if the average uranium price declines below the thresholds, the Company can request a deposit refund of $5 per pound, subject to the minimum $15 per pound deposit. The uranium loan was originally due November 30, 2025, and was extended to November 30, 2026. On October 16, 2025, we executed a second agreement to borrow up to 150,000 pounds of U3O8 from the same counterparty with similar provisions. The second agreement is due November 30, 2026. No uranium has been borrowed under the second agreement. On December 1, 2024, the Company exercised the option to borrow 250,000 pounds, which were subsequently sold into a uranium sales agreement, and posted the minimum $15 per pound deposit. An additional $5 per pound deposit was posted in July 2026. The Company can return borrowed uranium at any time with 30 days’ notice without penalty and with the right to re-borrow the uranium before the termination of the loan. Upon return of borrowed uranium, the counterparty will refund the respective posted deposits to the Company. The loan value was recorded at $81.55 per pound as of December 31, 2025. As of June 30, 2026, the loan value was adjusted to $85.00 per pound, resulting in mark-to-market losses of $0.2 million and $0.9 million, for the three and six months ended June 30, 2026, respectively. The following table summarizes the Company’s inventory derivative obligation as of June 30, 2026, and December 31, 2025.
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