Future Looks Bright for this US Uranium Developer
by Mike Fagan
Uranium Energy Corp. (NYSE: UEC) — currently trading below US$2.85 per share — has announced that it has entered into contracts to purchase a total of 1.2 million pounds of U3O8 at a purchase price of approximately US$29 per pound.
Additionally, the company has entered into an agreement with institutional investors on the purchase of 10,000,000 common UEC shares [at a price of US$3.05/share] resulting in gross proceeds to the company of US$30.5 million.
UEC president & CEO, Amir Adnani, commented via press release:
The company’s expansive U3O8 inventory is expected to provide greater marketing flexibility for utilities while freeing up UEC's domestic mine production for the newly established $1.5B US Uranium Reserve.
Additionally, UEC reports that the market value of its 19.5% equity stake [14 million shares] in Uranium Royalty Corp. (TSX-V: URC) — the first and only publicly listed uranium royalty and streaming company — has increased to US$34.3 million following URC's announced acquisition of royalties on Cameco’s world-class MacArthur River and Cigar Lake uranium mines in Canada’s Athabasca Basin.
The McArthur River and Cigar Lake mines rank as the two largest high-grade uranium mines in the world with ore grade 100 times world averages as disclosed by Cameco. Based on disclosed production capacities, the two mines have combined capacity equal to one-fifth of global forecasted uranium demand.
Mr. Adnani added:
The company’s recent balance sheet initiatives have been well received by the market with UEC shares more than tripling since November of last year from US$0.80 per share to currently just below US$3 per share.
For speculators, it’s important to note that — due to consolidation in the North American uranium industry over the last decade — UEC is one of only a handful of US-based uranium companies positioned to become a near-term producer and contributor to the US Uranium Reserve.
Operational catalysts expected to generate news flow for UEC in the coming quarters, include:
- Advancement of the company’s Burke Hollow, Palangana, Goliad and projects, Texas.
- Advancement of the Reno Creek project, Wyoming, where the fully permitted portion of the project boasts 23.97 million tons grading 0.04% U3O8 containing 18.71 million pounds.
- Potential for higher uranium prices resulting from continued supply disruption coupled with strong demand; recent move from ~24/lb to ~30/lb.
Keep in mind also that UEC’s Texas operations are anchored by the company’s fully licensed and permitted Hobson Processing Plant (below).
With no less than four fully-permitted ISR (In-situ Recovery) uranium projects on US soil with a 4MM/lb per year production profile — now is an opportune time to be taking a closer look at UEC as a potential future leader in America’s resurgent uranium sector.
Be sure to click here for our most recent report on Uranium Energy Corp.
Yours in profits,
Editor, Resource Stock Digest
Mike Fagan has mining in his blood. As a teenager he staked countless gold and silver properties in Nevada alongside his dad, Brian Fagan, who created the Prospect Generator model that’s still widely used today in the resource space. One of those staking projects was put into production by a major Canadian mining company — a truly rare and profitable experience. That background uniquely qualifies him as a mining stock speculator. One of the most well-known names in the business, Mike is now putting that experience to use for the benefit of Resource Stock Digest and Hard Asset Digest readers.