Uranium Energy Corp Reports Fiscal 2012 Production Results and Provides Operations Update
NYSE MKT Equities Exchange Symbol – UEC
CORPUS CHRISTI, TX, Oct. 15, 2012 /PRNewswire/ – Uranium Energy Corp (NYSE MKT:
UEC, the “Company”) is pleased to report financial and production
results for the fourth quarter and the fiscal year ended July 31,
2012. Major highlights include the following:
-- Fiscal-Year Sales of 270,000 Pounds U3O8 Generated Revenues of $13.8 Million:For the fiscal year, a total of 270,000 pounds of U3O8 were sold at an average sales price of $51 per pound for gross proceeds of $13.8 million, with an average cash cost(1) per pound sold of $18 excluding royalties. During Q4, the Company completed its third uranium sale of 150,000 pounds of U3O8 at $50 per pound for gross proceeds of $7.5 million, with cash cost(1) per pound sold of $21 excluding royalties; -- Hobson Processed 198,000 Pounds U3O8:For the fiscal year, a total of 198,000 pounds of U3O8 were dried and drummed at the Hobson processing facility; -- Production Increased During the Quarter: Production from the Palangana Mine increased to 44,000 pounds of U3O8 during Q4 compared to 34,000 pounds during Q3; -- Additional Production Areas at Palangana: Production Area-3 is expected to begin production by December 2012. Concurrently, work is underway to permit and develop Production Areas-4 and 5; -- The Goliad ISR Project is in Advanced Development: The Company has received all of the required permits from the TCEQ to begin construction at the Company's Goliad In-Situ Recovery (ISR) Project and continues to work with the TCEQ and the EPA as the review process moves forward on gaining concurrence from the EPA on the aquifer exemption permit; -- Exploration Drilling on Recently Acquired South Texas Projects Well Underway: The Company initiated an extensive drilling campaign on the Burke Hollow and Channen Projects. Both projects are located within 50 miles of Hobson;
-- Established Major Resource at Anderson Project in Arizona: The Company reported an NI 43-101 compliant Indicated Resource of 17 million pounds of U3O8 and an Inferred Resource of 12 million pounds of U3O8 at its Anderson Project; and
-- The Company's Balance Sheet Remains Strong: As of July 31, 2012, the Company had $25.0 million of cash in the treasury and 53,000 pounds of U3O8 available for sale in inventory with a market value of approximately $2.6 million. The Company is a debt-free, 100%-unhedged producer.
Palangana Mine – Production Update
During the three months ended July 31, 2012, the Palangana Mine produced
44,000 pounds of U(3)O(8), for a total 183,000 pounds of U(3)O(8) for the fiscal year ended July 31, 2012. During the three months ended
July 31, 2012, the Hobson processing facility processed 50,000 pounds
of U(3)O(8), for a total 198,000 pounds of U(3)O(8) for the fiscal year ended July 31, 2012.
Since the commencement of production to July 31, 2012, a total of
323,000 pounds of U(3)O(8) have been processed. At July 31, 2012, the Company had 53,000 pounds
of U(3)O(8) available for sale in inventory, with a market value of approximately
Most production to date has been from Production Area-1 (PA-1). Well
control facilities and wellfields have been completed at PA-1 with over
150 injection and production wells. Included in these numbers are
in-field drilling efforts, where an additional 19 production wells were
drilled in an effort to increase uranium recovery.
Operations started at Production Area-2 (PA-2) earlier this year, and
the build-up there is continuing. Well control facilities and
wellfields were initially completed with 36 injection and production
wells. An additional 22 injection and production wells have now been
placed into operation for a total of 58 wells.
Development of multiple Palangana production areas is well under way as
Palangana Mine – Development Update
Production Area-3 (PA-3) is planned to commence operation by December
2012. The surface facilities, including roads, electrical utilities,
surface pipeline system and well control system racks, have been
completed. The majority of the downhole submersible pumps have been
set, and the electrical power system and individual flow pipelines are
being installed. Initial core leach studies indicate encouraging
recovery yields at PA-3.
At Production Area-4 and Production Area-5, the Company has initiated
acquisition of environmental information to enlarge its permit area,
and amendments to the original Radioactive Materials License and
Aquifer Exemption are also being worked on to expand the size of the
licensed area. The Company plans to submit these applications by
Goliad ISR Project
The Company has received all of the required permits from the TCEQ to
begin construction at the Goliad ISR Project. Uranium recovery
operations can commence at the site once the regional EPA concurs with
the aquifer exemption granted by the State of Texas. The main access
road, electrical access gate, electrical utilities supply power line
and the deep disposal well drill location have been constructed.
Additionally, a water system has been constructed to supply the drill
rigs once wellfield drilling commences.
The Company continues to work with the TCEQ and the EPA as the review
process moves forward. The regional EPA has concurred with more than
30 aquifer exemptions granted by the TCEQ for ISR mining in Texas.
Burke Hollow Project Exploration Update
From May to September 2012, a total of 224 exploration and offset
delineation holes were drilled totaling 109,830 feet. To date, the
Company has explored approximately 25% of the 17,510-acre project, and
five uranium trends have been discovered. These are the 180-foot, the
220-foot, the 240-foot, the 370-foot and the Eastern 180-foot/220-foot
trends. From initial drilling, 81 holes (36%) met or exceeded an ore
grade cutoff criterion of 0.30 grade-thickness (GT) at Burke Hollow.
Future plans include completing an initial independently qualified
resource statement, further delineation and exploration drilling to
define extensions of known trends and initiating the collection of
baseline environmental data to support future production-related
Salvo ISR Project Exploration and Development Update
Exploration and delineation drilling was completed during the fourth
quarter on planned initial production areas at Salvo, and a significant
under-explored area showing strong mineralization remains open-ended.
Additional exploration and delineation drilling will be planned in
order to complete resource assessments in this area.
A total of 122 exploration and delineation holes were drilled during
Phase II which was concluded in fiscal Q4 for a total 70,760 feet.
Twenty-nine holes (23%) met or exceeded a cutoff of 0.30 GT. Future
plans include further exploration and delineation drilling in this area
in order to define the extent of the mineralized zones in the
Channen Project Exploration Update
In May 2012, the Company acquired the rights to explore for uranium on
the Channen Project, a 10,704-acre property located in southern Goliad
County, Texas. The project is situated within the prolific South Texas
Uranium Belt, located approximately 50 miles to the southeast of the
Company’s Hobson uranium processing facility.
Drilling operations began at the Channen Project in July 2012 with two
rigs targeting both the upper and lower trends located from surface to
920 feet in depth. Ongoing plans for the Channen Project include
drilling of a statistical grid based on 6,400-foot centers which
encompasses the entire project. A large area located proximal to
petroleum wells exhibiting gamma-ray shows in the lower trend is
included within this grid.
Paraguay ISR Projects
During fiscal 2012, the Company expanded on its Paraguay holdings
through the acquisition of Cue Resources and its Yuty project
containing an NI 43-101-qualified resource of 11 million pounds U(3)O(8). Additionally, a 10,000-meter drilling program was completed at the
Oviedo project which, along with historical and other geologic data,
led to a recently reported NI 43-101 Exploration Target of 23 to 56
million pounds of U(3)O(8) covering a grade range of 0.040% to 0.052% U(3)O(8). The complete report is expected to be filed soon on the Company’s
website and on SEDAR((2)).
The Company sees its Paraguay holdings – 988,420 acres covered under
current licenses for the Yuty and Oviedo projects – as a highly
prospective, large-scale ISR-amenable uranium district with
mineralization that is very similar to that of South Texas.
In May 2012, the Company announced a mineral resource for the Anderson
Project located in Yapavai County, Arizona consisting of an NI
43-101-compliant Indicated Resource of 17 million pounds of U(3)O(8 )at grades averaging 0.04%, and an Inferred Resource of 12 million pounds
of U(3)O(8) at grades averaging 0.04%.
The following is a financial review of the Company for the three and
twelve months ended July 31, 2012, and should be read in conjunction
with the consolidated financial statements and management’s discussion
and analysis as contained in the Company’s Form 10-K filing available
at the Company’s website at www.uraniumenergy.com or on EDGAR at www.sec.gov.
Results of Operations
During the three months ended July 31, 2012, the Company recorded
revenue of $7.5 million resulting from the sale of 150,000 pounds of U(3)O(8) at an average sales price of $50 per pound. Cash and non-cash cost of
sales, including royalties of $1.0 million, totaled $4.9 million or an
average of $33 per pound (cash cost((1)) per pound sold of $21 excluding royalties), resulting in a gross profit
of $2.6 million.
During the fiscal year ended July 31, 2012, the Company recorded revenue
of $13.8 million resulting from the sale of 270,000 pounds of U(3)O(8) at an average sales price of $51 per pound. Cash and non-cash cost of
sales, including royalties of $1.7 million, totaled $8.1 million or an
average of $30 per pound (cash cost((1)) per pound sold of $18 excluding royalties), resulting in a gross profit
of $5.6 million.
During the three months ended July 31, 2012, the Company recorded a net
loss of $4.8 million or $0.06 per share (2011: $5.6 million or $0.06
per share). Expenses totaled $7.0 million (2011: $6.1 million) and
include $4.0 million (2011: $3.0 million) for mineral property
expenditures, $2.7 million (2011: $2.7 million) for general and
administrative and $0.3 million (2011: $0.4 million) for depreciation,
amortization and accretion.
During the fiscal year ended July 31, 2012, the Company recorded a net
loss of $25.1 million or $0.32 per share (2011: $27.4 million or $0.40
per share). Expenses totaled $30.3 million (2011: $27.9 million) and
include $14.9 million (2011: $11.4 million) for mineral property
expenditures, $14.1 million (2011: $15.2 million) for general and
administrative and $1.3 million (2011: $1.2 million) for depreciation,
amortization and accretion.
(1) Cash costs are key indicators not defined under U.S. GAAP and are non-GAAP measures. Cash costs exclude non-cash components comprised of depreciation, depletion and stock-based compensation.
Net cash used in operating activities for the fiscal year ended July 31,
2012 was $19.2 million (2011: $23.7 million). Net cash provided by
financing activities for the fiscal year ended July 31, 2012 was $20.2
million (2011: $37.1 million). Net cash used in investing activities
for the fiscal year ended July 31, 2012 was $6.7 million (2011: $3.8
million). At July 31, 2012, the Company had cash and cash equivalents
of $25.0 million and working capital of $22.5 million.
During the fiscal year ended July 31, 2012, despite a challenging equity
capital market environment, the Company closed an over-allotted public
offering of its shares for gross proceeds of $22.5 million at a price
of $3.60 per share.
Uranium Market Update
At July 31, 2012, the spot price of uranium was $49.50 per pound, down
$2.25 for the quarter according to Ux Consulting Company. The spot
price is finding support at the marginal cost of conventional mine
production above $45.00 per pound, and the long-term contract uranium
price has maintained stability at $60.00 per pound.
Industry analysts have recently published reports stating that the
incentive price for the development of new conventional mining projects
is $83 per pound or higher. To this end, construction decisions on a
number of large-scale conventional uranium projects have been postponed
due to poor economics at the current spot uranium price.
The challenges to expanding uranium mine supply will be compounded next
year as the Highly Enriched Uranium or HEU agreement between the U.S.
and Russia is set to expire by the end of 2013 which will reduce
secondary supply to the global uranium market by 24 million pounds per
year. This reduction is anticipated to be significant given the
current worldwide supply imbalance to meet operating reactor
requirements – 180 million pounds of annual worldwide demand versus 140
million pounds of mine supply – and particularly in the U.S., where 104
operating reactors consume 55 million pounds of uranium annually with
domestic production at only 4 million pounds.
The worldwide nuclear build-out continues with the number of reactors
currently under construction totaling 65 in 13 different countries.
The emerging markets led by China, India, Russia and South Korea are
committed to nuclear energy, and continue to lead the global expansion
of new nuclear power plants being planned and built.
About Uranium Energy Corp
Uranium Energy Corp is a U.S.-based uranium production, development and
exploration company operating North America’s newest emerging uranium
mine. The Company’s fully licensed and permitted Hobson processing
facility is central to all of its projects in South Texas, including
the Palangana in-situ recovery project, which is ramping up initial
production, and the Goliad in-situ recovery project which is in the
final stages of mine permitting for production. The Company’s
operations are managed by professionals with a recognized profile for
excellence in their industry, a profile based on many decades of
hands-on experience in the key facets of uranium exploration,
development and mining.
Stock Exchange Information:
NYSE MKT: UEC
Frankfurt Stock Exchange Symbol: U6Z
Notice to U.S. Investors
The mineral resources referred to herein have been estimated in
accordance with the definition standards on mineral resources of the
Canadian Institute of Mining, Metallurgy and Petroleum referred to in
NI 43-101 and are not compliant with U.S. Securities and Exchange
Commission (the “SEC”) Industry Guide 7 guidelines. In addition,
measured mineral resources, indicated mineral resources and inferred
mineral resources, while recognized and required by Canadian
regulations, are not defined terms under SEC Industry Guide 7 and are
normally not permitted to be used in reports and registration
statements filed with the SEC. Accordingly, we have not reported them
in the United States. Investors are cautioned not to assume that any
part or all of the mineral resources in these categories will ever be
converted into mineral reserves. These terms have a great amount of
uncertainty as to their existence, and great uncertainty as to their
economic and legal feasibility. In particular, it should be noted that
mineral resources which are not mineral reserves do not have
demonstrated economic viability. It cannot be assumed that all or any
part of measured mineral resources, indicated mineral resources or
inferred mineral resources will ever be upgraded to a higher category.
In accordance with Canadian rules, estimates of inferred mineral
resources cannot form the basis of feasibility or other economic
studies. Investors are cautioned not to assume that any part of the
reported measured mineral resources, indicated mineral resources or
inferred mineral resources referred to in this news release are
economically or legally mineable.
(2) In the Company’s subject technical report all tonnages, grade, and
contained pounds of uranium should not be construed to reflect a
calculated mineral resource (inferred, indicated, or measured). The
potential quantities and grades, as stated in the technical report, are
conceptual in nature and there has been insufficient work to date to
define a NI 43-101 compliant resource. Furthermore, it is uncertain if
additional exploration will result in the discovery of an economic
mineral resource on the project.
Safe Harbor Statement
Except for the statements of historical fact contained herein, the
information presented in this news release constitutes “forward-looking
statements” as such term is used in applicable United States and
Canadian laws. These statements relate to analyses and other
information that are based on forecasts of future results, estimates of
amounts not yet determinable and assumptions of management. Any other
statements that express or involve discussions with respect to
predictions, expectations, beliefs, plans, projections, objectives,
assumptions or future events or performance (often, but not always,
using words or phrases such as “expects” or “does not expect”, “is
expected”, “anticipates” or “does not anticipate”, “plans, “estimates”
or “intends”, or stating that certain actions, events or results “may”,
“could”, “would”, “might” or “will” be taken, occur or be achieved) are
not statements of historical fact and should be viewed as
“forward-looking statements”. Such forward looking statements involve
known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the Company to
be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements.
Such risks and other factors include, among others, the actual results
of exploration activities, variations in the underlying assumptions
associated with the estimation or realization of mineral resources, the
availability of capital to fund programs and the resulting dilution
caused by the raising of capital through the sale of shares, accidents,
labor disputes and other risks of the mining industry including,
without limitation, those associated with the environment, delays in
obtaining governmental approvals, permits or financing or in the
completion of development or construction activities, title disputes or
claims limitations on insurance coverage. Although the Company has
attempted to identify important factors that could cause actual
actions, events or results to differ materially from those described in
forward-looking statements, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or
intended. There can be no assurance that such statements will prove to
be accurate as actual results and future events could differ materially
from those anticipated in such statements. Accordingly, readers should
not place undue reliance on forward-looking statements contained in
this news release and in any document referred to in this news release.
Certain matters discussed in this news release and oral statements made
from time to time by representatives of the Company may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 and the Federal securities laws. Although
the Company believes that the expectations reflected in such
forward-looking statements are based upon reasonable assumptions, it
can give no assurance that its expectations will be achieved.
Forward-looking information is subject to certain risks, trends and
uncertainties that could cause actual results to differ materially from
those projected. Many of these factors are beyond the Company’s ability
to control or predict. Important factors that may cause actual results
to differ materially and that could impact the Company and the
statements contained in this news release can be found in the Company’s
filings with the Securities and Exchange Commission. For
forward-looking statements in this news release, the Company claims the
protection of the safe harbor for forward-looking statements contained
in the Private Securities Litigation Reform Act of 1995. The Company
assumes no obligation to update or supplement any forward-looking
statements whether as a result of new information, future events or
otherwise. This press release shall not constitute an offer to sell or
the solicitation of an offer to buy securities.
Contact Uranium Energy Corp Investor Relations at:
Toll Free: (866) 748-1030
Fax: (361) 888-5041
SOURCE Uranium Energy Corp