enCore Energy (EU) risk factors, FY2024 10-K

Other

1. 01The following is a summary of some of the risks and uncertainties that could materially adversely affect our business, financial condition and results of operations. You should read this summary together with the more detailed description of each risk factor contained below

Risks related to enCore’s Business and Operations

1. 02We are an exploration stage company with a history of negative operating cash flows and we may never develop or be unable to maintain positive cash flow from our mining activities
2. 03We may need additional financing in connection with the implementation of our business and strategic plans from time to time
3. 04We have experienced negative cash flows from operations and may need additional financing in connection with the implementation of our business and strategic plans from time to time
4. 05Our corporate strategy includes acquisitions of mining assets and businesses. Such acquisitions are subject to risks and we may not realize the anticipated benefits of an acquisition
5. 06Our properties do not contain Mineral Reserves under S-K 1300, and some of the Company’s properties, projects and facilities may not be economic at any point in time or at all
6. 07Mining on properties having no known Mineral Resources or Mineral Reserves is inherently speculative and may not prove to be economic at any point in time or at all
7. 08We may not realize any or all of the anticipated benefits from the Alta Mesa uranium project
8. 09the Company’s ongoing relations with Boss with respect to the joint venture in the Alta Mesa Project
9. 10There may be potential undisclosed liabilities associated with the Alta Mesa acquisition
10. 11We depend on key personnel, and our success will depend on our continued ability to retain and attract such qualified personnel
11. 12Certain directors and officers may be subject to conflicts of interest with respect to the Company due to their relationship with other resource companies

Risks related to our Industry

1. 13There are risks associated with the exploration of, development of, and production from mineral properties
2. 14The nature of our use of independent contractors to conduct drilling rig operations presents inherent risks of loss, including weather-related risks, that could adversely affect our results of operations
3. 15We are subject to the risks and hazards normally encountered by companies in the mineral exploration and extraction industry
4. 16The Company risks potential for obsolescence, unexpected maintenance costs, dependence on the lessor's financial stability, potential for damage or loss of equipment, and not having full control over asset usage due to lease terms
5. 17Economic extraction of minerals from uranium deposits may not be commercially viable
6. 18Estimation of Mineral Resources is subjective and uncertain
7. 19No assurances can be given that future mineral production estimates will be achieved
8. 20regulatory restrictions imposed by government agencies
9. 21Our business relies on the use of drilling rigs operated by independent contractors to conduct exploration activities, and as such, their operating expense includes fixed costs that may not decline in proportion to decreases in rig utilization and day rates
10. 22Shortages of drilling contractors, drilling supplies or other key materials could adversely affect our operations
11. 23No assurance can be given that estimates of commodity prices used in preliminary economic assessment will actually be realized
12. 24Projects may not advance or achieve production if key permits are not obtained or retained
13. 25Native American tribes may be involved in the permitting process, which could cause delays or increased expenses
14. 26Opposition to mining may disrupt our business activities
15. 27Permits received are subject to expiration and may not be able to obtain, maintain or amend rights, authorizations, licenses, permits or consents required for our operations
16. 28The title to our mineral property interests may be challenged
17. 29The procurement of mining interests and retaining skilled employees is highly competitive
18. 30The uranium industry is highly competitive, and we may not be successful in acquiring additional contracts and projects
19. 31Nuclear energy competes with other sources of energy and is subject to public acceptance of nuclear energy as a means of generating electricity
20. 32The Company’s operations are sensitive to the market price of uranium, which may be volatile
21. 33Hedging activities may not be successful
22. 34We may be subject to litigation and other legal proceedings arising in the normal course of business and may be involved in disputes with other parties in the future which may result in litigation
23. 35Worldwide demand for uranium is directly tied to the demand for electricity produced by the nuclear power industry, which is also subject to extensive government regulation and policies, and any change in these regulations or policies may have a negative impact on enCore’s business or financial condition
24. 36Insurance may not be available to cover the gamut of risks associated with mineral exploration, development and mining
25. 37We rely on contractors and experts in our operations, which could subject the Company to liability that could adversely impact the Company’s operations and financial condition
26. 38Extraction, capital and operating cost estimates may be inaccurate
27. 39Increased exposure to foreign exchange rate fluctuations may adversely affect our costs, earnings and value of some of our assets, including our common shares
28. 40We utilize novel mining methods for production at our properties, which may not yield anticipated results
29. 41We are subject to technical innovation and obsolescence
30. 42There is no liquid public market for the sale of uranium. The uranium futures market on the Chicago Mercantile Exchange does not provide for physical delivery of uranium, only cash on settlement
31. 43The international nuclear fuel industry, including the supply of uranium concentrates, is relatively small compared to other minerals, and is generally highly competitive and heavily regulated
32. 44Imports from state-owned enterprises may continue to challenge the U.S. uranium industry
33. 45Possible amendments to the general mining law could make it more difficult or impossible for us to execute our business plan
34. 46There are risks associated with the Company’s joint venture operations and projects
35. 47From time to time, the Company may enter into other joint venture or shared ownership arrangements with third parties to develop and/or operate its projects

Risks Related to Taxation

1. 48We are subject to Canadian tax on our worldwide income
2. 49Dividends, if ever paid, on the common shares are subject to Canadian withholding tax
3. 50Changes in tax laws may affect us and our shareholders

Risks Related to enCore’s Common Shares

1. 51The issuance of additional common shares may dilute shareholders’ interest in the Company
2. 52enCore may issue additional common shares in the future pursuant to proposed acquisitions described herein and on the exercise of its outstanding stock options and warrants
3. 53Securities markets have experienced a high level of price and volume volatility, and the market price of securities of many companies has experienced wide fluctuations which have not necessarily been related to the operating performance, underlying asset values or prospects of such companies
4. 54enCore has never paid dividends and does not currently intend to do so in the foreseeable future. If our share price does not appreciate, our investors could potentially lose on their investment in our common shares
5. 55Our common shares are listed on Nasdaq, which subjects us to various listing standards, noncompliance of which could result in the delisting of our common shares, which could result in lower trading volumes and liquidity in the United States

General Risks

1. 56Global financial conditions and risks could materially impact our ability to raise equity or obtain debt and impact global supply chains, which could adversely impact the Company’s operations and financial condition
2. 57General inflationary pressures may impact the Company’s costs and affect our results of operations
3. 58We are dependent on information technology systems, which are subject to certain risks, including cybersecurity risks and data leakage risks associated with implementation and integration
4. 59or a component thereof could, depending on the nature of any such failure, adversely impact the Company’s reputation and results of operations
5. 60our independent registered public accounting firm is required, pursuant to Section 404(b) of SOX, to attest to the effectiveness of our internal control over financial reporting and we will be required to include such attestation in our Annual Reports
6. 61The SEC’s disclosure requirements for Mineral Reserves and Mineral Resources, as codified in Subpart 1300 of Regulation S-K 1300, create ambiguity for issuers required to comply with both the requirements of S-K 1300 and NI 43-101, and may result in increased compliance costs for the Company
7. 62United States investors may not be able to obtain enforcement of civil liabilities against the Company
8. 63Changes in accounting rules and other policy or regulatory changes could occur at any time and could impact us in significantly negative ways that we are unable to predict or protect against
9. 64Our proprietary data, technology and intellectual property may be compromised or lost, which could result in decreased competitive advantage and/or loss to the value of such assets
10. 65Changes in climate conditions and regulatory regime could adversely affect our business and operations
11. 66require us to suspend or reduce production or close operations and could prevent us from pursuing expansion opportunities. These effects may adversely impact the cost, production, and financial performance of our operations
12. 67Investors may experience future dilution as a result of additional equity offerings