Categories: Energy
Topics: General Energy

Uranium Energy Corp. (NYSE: UEC) CEO Amir Adnani on Maximizing Profits With Two Pronged Approach to Uranium Bull Market

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the President and CEO of Uranium Energy Corp., Mr. Amir Adnani. Amir, great to have you back on. How are you?

Amir Adnani: Excellent, Gerardo. How are you?

Gerardo Del Real: I am well. Thank you so much for asking. We chatted recently and we talked about the acquisition of this very, very attractive portfolio. It's been a busy 2022. You just had some news that really, really validates the newly acquired Christie Lake Project in Eastern Athabasca Basin, Canada. You want to talk about one of those highest grade intersections of 2022 that you hit recently? Just phenomenal numbers.

Amir Adnani: Yeah, delighted to do so. Really, when you think about this acquisition of UEX that we completed, we got to put a bit of context around it. Because in the last 10 months, UEC, we've invested close to $420 million with our acquisition of both Uranium One and UEX to create this two-pronged approach that we've developed, where we've got our near-term, fully permitted US in situ recovery business. But now we also have this very exciting Canadian high grade conventional business.

And this two-pronged approach, all of it 100% unhedged, is very differentiated in the sense that there really isn't another company out there that has this much in terms of projects and production capability all in North America.

Now, specifically with the news at Christie Lake, it's really hitting the ground running. We came in with the portfolio of UEX where there's 29 projects and Christie Lake is one of 29. And this one in particular, before we talk about the headline grade, I want to just remind everyone about the location of this project. This project is only nine kilometers away and along strike of the world's largest operating uranium mine, McArthur River, which is not only the world's largest uranium mine, but it's the highest grade uranium mine. And grade is really king when it comes to conventional mining.

And the headline number here, which is one of the best results of the year in the whole sector, is 68%, 68.7% to be exact. It does make me chuckle. Over two meters. And there are number of other intercepts at 7.8%, 26%. It's all in our press release. But these are phenomenal grades.

And what people need to understand is not only are these grades impressive, but they are beyond impressive. They are almost a hundred times greater than the average grade of uranium in the world anywhere else, for conventional mining. A hundred times greater. So that's one thing.

But the other thing is that this part of Canada, where the Christie Lake Project is situated, the Athabasca Basin, which is in northern Saskatchewan, has decades of conventional uranium mining history at these superior grades. This is what the Persian Gulf would be to the oil industry, this part of Canada would be for conventional uranium mining.

And of course, again, for listeners, then, this is the key differentiating feature. The way we mine uranium in the United States is primarily using in situ recovery. So that's solution mining. It's how the Kazakhs mine uranium. It's how US deposits are mined. So in in situ recovery, grade isn't king. In fact, we don't focus that much on grade. We focus on porosity and flow rates because it's solution mining. But in conventional mining, which is how the Canadian projects are developed, grade is so integral.

And I just love that we delivered these results. Our new team and Saskatoon, the former UEX team, have done a great job with delivering this. And there's going to be a lot more coming. And what 68% means, it means a resource that's going to get bigger here at Christie Lake. And I love, Gerardo, the idea of growing a resource, this is one of only 29 projects, just down the street from the world's largest operating uranium mine.

Gerardo Del Real: You mentioned the unhedged approach that you've taken with UEC. I would love for you to explain to everyone that may be new to the uranium sector, why that's so critical moving forward with the uranium bull market that both you and I see developing.

Amir Adnani: I've been in this business, I started UEC 18 years ago. In these 18 years I've been in the uranium business, we've had three good years and 15 very challenging years. But the fundamentals today are the best that I've seen in 18 years. And if you ask individuals that have been at this for longer than that, it's the best they've seen ever, the fundamentals for nuclear energy and uranium prices.

I'm telling you openly, and I talk about this in other interviews, I see uranium prices heading to their previous highs. On an inflation adjusted basis, that's somewhere between $100 to $200 per pound. Currently, we're a $47 per pound. So you tell me and you ask other companies, the likes of Cameco that have signed fixed price contracts, why on earth they would fix the price at today's prices? Or even at prices, $10 or $20 higher than today's price? Because even that would only be $50, $60, $70 per pound.

So to answer your question, we don't believe in fixed prices. We don't want to fix the price that we sell uranium at, at prevailing prices of $50 per pound. Or even if you said to me $70 or $80 per pound. Because we believe these are the best fundamentals ever and that uranium prices are going to their previous all time highs, which on an inflation-adjusted basis is somewhere between $100 to $200 per pound. We want to capture every bit of that upside for our shareholders. And that's what it means when we say we're 100% unhedged.

And it's truly a differentiated profile because a number of companies in the sector, including Cameco, do things the old way of, "Let's just sign contracts and let's have predictable returns." And I think after 18 years where we've had 15 bad years and three good years, no. We're not in this to try to capture some minimum return. We want to capture this incredible upside that the sector offers. We want to capture all of it.

Gerardo Del Real: I think you're perfectly positioned. I think, and I've said this before publicly and to you privately, I think you and the team have done a brilliant job of putting shareholders in the best possible scenario for the coming run up in the uranium space. Amir, I appreciate your time, as always. Anything else you'd like to add to that? Would you like to give us a quick macro take on the sentiment in the uranium space right now?

Amir Adnani: No, I think we covered it. I think anyone that's following our interviews, we keep it short and sweet and focused on recent news and development.

I think for anyone who's following UEC, in addition to the recent Christi Lake drill results and the 68% headline number, take a look at our 10K annual report press release that also came out recently highlighting the year that we had. Again, it was a transformative year for UEC not only acquiring Uranium One and UEX, but what these two acquisitions meant and there were very accretive acquisitions. It was doubling our production capabilities in the US and doubling our total resources in all categories, which is now approaching almost 300 million pounds of uranium, exclusively in North America.

A company that has no debt and $173 million of cash and liquid assets. It's truly a differentiated profile on the 100% unhedged strategy, but almost the third or fourth largest resource base in the world right now for any uranium company.

And I think the geopolitical developments in the sector with potential Russian sanctions, potential Russian counter sanctions and embargoes, simply mean that western supplies are going to play a much bigger role moving forward and they're probably going to demand and command a premium.

And in that environment, that is what we're doing at UEC, we're building a company that could be that North American leader. We're diversified, We got the Canadian and US side covered. And I think it's really exciting, Gerardo. It's exciting to be not just in uranium because of global fundamentals, but I think the geopolitical events in the world, as unfortunate as they are, they're going to shape the uranium market, as well. And they're going to shape it in a way where we simply need to see increased role being played by Western supplies. And that's what we're really building for.

So encourage anyone who's interested to also look at our press release and our 10K filing. Also, the size of our physical uranium program where we have signed contracts to buy uranium. I like buying uranium at a fixed price, not selling it at a fixed price. I've signed contracts to buy 5.5 million pounds of uranium at $37 per pound fixed. And we'll sell it at various prices moving forward. All those deliveries and purchases in the money right now. And for any more information, visit us at uraniumenergy.com or follow us and follow me if you like on Twitter, @AmirAdnani.

Gerardo Del Real: Amir, well said, insightful as always. Thank you so much for your time.

Amir Adnani: Thank you, Gerardo. Talk soon.

Click here to see more from Uranium Energy Corp.