Mike Fagan,
Editor
Feb. 7, 2022
Uranium Energy Corp. (NYSE-American: UEC) — America's leading and fastest-growing uranium mining company — has successfully repaid the remaining US$10 million balance of its secured credit facility and is now completely debt-free.
This is an important milestone for the company and is a testament to its unwavering commitment to creating value for shareholders through fiscal responsibility.
Uranium Energy CEO Amir Adnani commented on the company’s recent milestones via press release:
“Over the last twelve months we've executed on a strategy to grow UEC's resources and production capacity, while improving our financial flexibility. These goals were accomplished through the accretive acquisition of Uranium One, the establishment of one of the largest physical portfolios of U.S. domiciled uranium, and the strengthening of the balance sheet, including the milestone to become debt free. Our expanded U.S. In-Situ-Recovery ("ISR") production profile of 6.5M pounds per year, in the stable jurisdictions of Texas and Wyoming , is underpinned by seven fully permitted projects and further de-risked by virtue of our two licensed and built processing plants. Our production-ready assets are shielded against inflationary pressures that would otherwise be evident in building new facilities today. In sum, all of these factors, combined with our balance sheet strength, positions UEC as the leading U.S. based uranium company.”
On the macro side, we’re seeing a number of significant tailwinds and catalysts for higher uranium prices as we start off 2022. Some of those tailwinds include the electrification-of-everything and global decarbonization efforts.
We’re seeing robust growth on the demand side — including the formation of the Sprott Physical Uranium Trust — coupled with long-term threats to supply whether that be geopolitical, COVID-related, or otherwise.
Sentiment is improving in the US with the advent of SMRs and also in the EU. China is planning to build 150 new nuclear plants over the next decade and a half, which is more capacity than has come online globally in the last 35 years.
Currently, prices are right around US$43/lb U3O8, which is well below the price needed to incentivize new North American production to come online. With favorable supply-demand fundamentals in-play, there’s plenty of runway ahead for uranium prices and for small-cap uranium equities such as UEC.
My colleague Gerardo Del Real of Junior Resource Monthly had this to say, “I think we're going to see the uranium price overshoot to the US$200 level before it does a 50% retracement to a more sustainable US$100 level.”
UEC shares have pulled back in recent trading, along with the rest of the uranium market, from the US$5.75 level to currently right around US$2.70 per share, which may prove an optimal entry-point for those who feel they may have missed out on the initial run.
The uranium market in general is ripe with fear and greed. Compared with other commodities, it’s a tiny market where even seemingly small inflows can have a major upward impact on price.
And that means the next leg up in the uranium space may prove extraordinarily lucrative for those who are keeping their eye on the ball.
Yours in profits,
Mike Fagan
Editor, Resource Stock Digest
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