Categories: Energy
Topics: General Energy

Uranium Energy Corp. (NYSE: UEC) CEO Amir Adnani on Positioning to Lead the Uranium Bull Market & Offer to the U.S. Government to Supply the Strategic Uranium Reserve

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, we just chatted last week. It's great to have you back on. How are you?

Amir Adnani: We've been busy. Two weeks in a row for you and I to connect. That's a lot.

Gerardo Del Real: Well, let's get right into it. It seems like every week now we're talking about a milestone. The latest is UEC submitting an offer to the U.S. Government to supply the strategic uranium reserve. Now, one, let me congratulate you, first off. But two, let me also give you credit for laying the groundwork and the foundation for all of these catalysts during what was one of the worst bear markets in the uranium space. That's really when a lot of the foundational work that you're seeing payoff now happened. So, congratulations to you and your team for having the vision to position shareholders the way you have. And then with that being said, I'll let you provide the context. Pretty big deal.

Amir Adnani: Gerardo, appreciate it. The UEC team, as you know, have had a very strong and singular mission from the get-go, and the get go being, 17, almost 18 years ago. So, it's been a long journey. But in this journey, we really haven't wavered from the main focus that uranium was going to be a strategic energy commodity and that it was ultimately a matter of national security to make sure that there was supplies available in our own backyard in the U.S. And that this ultimately has really manifested itself in the form of this program, this newly created program by the U.S. government, that's being administered out of the Department of Energy by the National Nuclear Security Administration. This is a national uranium reserve. It's going to be a 10-year, or it's designed to be a 10-year, $10 billion plan with a $75 million authorization to date for the purchase of uranium, which gets you to about a million-pound purchase that the U.S. government is out to make right now.

So, again, this is historic stuff. You and I have talked about it. The last time you looked to see when was the last time the U.S. government bought physical uranium for its own account, and you got to go back to the Eisenhower administration, to the 1950s. And the backdrop today of the risks associated with depending and relying too much on Russian uranium imports and increasingly China or Russia's allies is creating just precarious risk. And so domestic supply is critical for U.S. energy and national security. And we have been building Uranium Energy Corp over the last 17, 18 years to be focused, to be a sector leader when it comes to U.S. production capability. And in fact, if you really go back and think about our discussions years to date, this is one of the primary drivers behind our acquisition of Russia's Uranium One, repatriating this very important company and asset back to U.S. ownership and control.

And so while obviously very highly accretive transaction for UEC and UEC shareholders, that acquisition really increased the domestic capabilities of uranium mining and the country's nuclear fuel supply chain capability. So, excited that UEC is in a position to submit an offer to the U.S. government and to supply and hopefully be there in the mix now and moving forward, supplying the strategic uranium reserve and U.S. utilities, which collectively are the largest consumers of uranium in the world.

Gerardo Del Real: Let's look ahead a bit, because you mentioned the utilities. The spot price continues to hover near the $50 mark. Both you and I know that it's going to have to be higher to incentivize new production to come online. How do you see the market developing as it relates to the utilities which remain on the sidelines despite the fact that, in the next 18 to 24 months, a lot of the existing contracts are going to be up for renewal? And so where do you see that? When do you see that change happening and that pivot happening with the utilities, and how consequential is that for the price?

Amir Adnani: I mean, literally, as you and I are speaking right now, there's a tweet that came up from Southern Company talking about the very important milestone they've just met at the Vogtle Unit Three being built, the new reactor unit that's being built in the state of Georgia. And this is again a historic milestone for them in developing and bringing that unit on to join the other 94 units that are operating in the U.S. And right now in the U.S., there's incredible dependence on imports from Russia, Kazakhstan, Uzbekistan. Over 50 percent of imports are currently coming from those countries. There's definitely a bifurcation in the market. Western utilities especially seeing the squeeze that Russia has put on Western Europe with respect to oil and gas supplies. This is something that no one wants to see get repeated for uranium. And so then I think the political pressure that's building up right now in Washington, coupled with the common sense approach of U.S. utilities seeing that longer term they need to really move away from Russia as a supplier of uranium.

Russia is not a reliable supplier of uranium or nuclear fuel, not when it's waging war and acts of hostilities, what you're seeing happen in Ukraine. And so, Gerardo, I really see that we're going to have an unprecedented wave of demand coming into the market for uranium here, and it's really illustrated by the supply-demand fundamentals you see where you have globally 200 million pounds of demand and only 130 million pounds of supply from mining. But even more profound in the United States, where there's roughly 50 million pounds of annual demand and currently no domestic uranium mining, none, nil, zero. And so I think we have, arguably, an unprecedented wave of demand and contracting activity and whatnot upon us. And again, it's truly demonstrated in the structural supply deficit that you see, again, both in the global market, but also very strongly in the U.S. market for the domestic 93 units going on to 94.

Gerardo Del Real: It's been fun watching you work through a bear market. I am going to have an absolute blast watching you and the team work through this uranium bull market. Amir, thank you for your time, as always. Anything else to add to that?

Amir Adnani: No, I appreciate it. Let's be in touch soon. There's a lot going on, and excited to connect and talk about this. And, yeah. Let's really have some fun with this new uranium bull market that we have shaping up.

Gerardo Del Real: Looking forward to it. Thank you again.

Amir Adnani: Thanks, Gerardo.

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