Uranium Energy Corp Reports Fiscal 2013 Q2 Production Results and Provides Operations Update
NYSE MKT Equities Exchange Symbol – UEC
CORPUS CHRISTI, TX, March 12, 2013 /PRNewswire/ – Uranium Energy Corp (NYSE MKT: UEC, the “Company”) is pleased to report financial and
production results for the second quarter ended January 31, 2013.
Major second quarter highlights include the following:
-- Production Increased During the Quarter: Production from the Palangana Mine increased to 48,000 pounds of U3O8compared to 29,000 pounds the previous quarter. The startup of Production Area-3 in early December 2012 provided for stronger production levels during the quarter, especially for the month of January. This increase in production has continued into fiscal Q3 with 28,000 pounds of U3O8 produced in February 2013; -- Additional Production Areas at Palangana: Production Area-3 development was completed and production commenced in December 2012, with development and permitting activities continuing on Production Areas-4 and 5; -- The Goliad ISR Project is Fully Permitted for Production: In December 2012, final regulatory authorization was received to initiate production at the now fully-permitted Goliad ISR Project. The project is under construction with a three-phase electrical power system and a large site pad having been completed. Procurement of processing equipment and supplies for the construction of the satellite facility and first production area are well underway; -- Sale of 50,000 Pounds U3O8 Generated Revenues of $2.1 Million:During the quarter, the Company sold 50,000 pounds of U3O8 at $42 per pound for gross proceeds of $2.1 million, with a cash cost per pound sold of $31 excluding royalties. Cash cost per pound sold increased due primarily to lower production volume, however, rising production levels this quarter over the prior quarter are anticipated to reduce cash cost per pound sold in future quarters;
-- Cumulative Sales to Date:Cumulative sales of U3O8 since commencement of production to January 31, 2013 total 370,000 pounds at a cash cost per pound sold of $21 excluding royalties; and
-- The Company's Balance Sheet Remains Strong: As of January 31, 2013, the Company had $12.3 million of cash in the treasury and 36,000 pounds of U3O8 available for sale in inventory with a market value of approximately $1.6 million. The Company is a debt-free, 100%-unhedged producer.
Palangana Mine – Production Update
During the six months ended January 31, 2013, the Palangana Mine
produced 77,000 pounds of U(3)O(8) from Production Areas-1, 2 and 3, and the Hobson processing facility
processed 83,000 pounds of U(3)O(8). At January 31, 2013, the Company had 36,000 pounds of U(3)O(8) available for sale in inventory, with a market value of approximately
With production continuing at Production Areas-1 and 2, Production
Area-3 commenced production in early December 2012. This resulted in
an increase in Palangana Mine production from 29,000 pounds of U(3)O(8) the previous quarter to 48,000 pounds this quarter, which is
anticipated to reduce cash cost per pound sold in future quarters.
Development and permitting activities are continuing on Production
Areas-4 and 5 as described below.
Palangana Mine – Development and Permitting Update
At Production Areas-4 and 5, the Company completed collection of
environmental data to enlarge its mine area boundary, aquifer exemption
boundary and its radioactive material license area. Applications to
expand the boundaries are planned for calendar Q2 2013.
Production Area-4 monitor well drilling, baseline sampling and pumping
tests have been completed. A Production Area-4 application is expected
to be submitted in calendar Q2 2013.
Goliad ISR Project
The Goliad ISR Project is now fully permitted for production. In
December 2012, the Company announced that the U.S. Environmental
Protection Agency concurred with the TCEQ issuance of the Aquifer
Exemption permit. A three-phase electrical power system for the entire
project and a large caliche site pad for the main plant complex and
disposal well have been constructed. Procurement of long-lead items
including processing equipment and supplies for the construction of the
satellite facility and the first production area are well underway.
Burke Hollow ISR Project Update
At the Burke Hollow Project, environmental data collection has commenced
and will continue throughout 2013. A drainage study has been completed
and an ecology, cultural resource and socioeconomic assessment is
planned for calendar Q2 2013. Regional baseline wells are also being
installed for groundwater data collection and permitting work is
expected to be ramped up in calendar Q2 2013.
Further exploration and development drilling is being planned, with
permitting activities already initiated to move the Burke Hollow ISR
Project immediately into the production pipeline, consistent with the
Company’s hub-and-spoke production model for its South Texas assets.
South Texas Exploration and Development Update
Salvo ISR Project
At the Salvo Project, permits remain in compliance with the state
regulatory agencies, and restoration of drill sites has been approved
after regular inspections conducted by the Texas Railroad Commission.
A review of historic and recent drilling results completed by the
Company shows good potential for future resource development.
Exploration and delineation drilling is planned for the proposed
Production Area-1 in the future.
At the Channen Project, fourteen widely-spaced exploration holes drilled
on a 6,400-foot grid revealed that at least two lower Goliad sub-rolls
lying between 700 feet to 860 feet in depth exist on the property.
Closer spaced delineation holes reveal that the overall trend length
known to date is over two miles. These drilling results are being
reviewed for future exploration activities in the Channen Project in
order to fully identify the extent of the mineralized zones.
Paraguay ISR Projects
On October 15, 2012, the Company filed on SEDAR an NI 43-101 technical
report disclosing an exploration target at its Oviedo Project of 23-56
million pounds of U(3)O(8) covering a grade range of 0.040% to 0.052% U(3)O(8)((1)). The technical report was created from the results of the Company’s
10,000-meter drilling program on its Oviedo Project and the compilation
of historical and other geologic data. Company geologists are
continuing to perform detailed radon surveys over anomalous targets
developed through synthesis of historic and current exploration
results. Work has continued on the delineation of the radon anomalies
that indicate the potential for shallow uranium mineralization along
The Company’s Paraguay Yuty and Oviedo Projects, with geology that is
very similar to that of South Texas, have the potential to be
large-scale ISR-amenable uranium projects.
The following is a financial review of the Company for the three and six
months ended January 31, 2013, and should be read in conjunction with
the condensed consolidated financial statements and management’s
discussion and analysis as contained in the Company’s Form 10-Q 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 January 31, 2013, the Company recorded
revenue of $2.1 million resulting from the sale of 50,000 pounds of U(3)O(8) at an average sales price of $42 per pound. Cash cost of sales
excluding royalties was $1.6 million or $31 per pound sold. Royalties
were $0.2 million or $5 per pound sold and non-cash costs were $0.3
million or $6 per pound sold. Total cost of sales was $2.1 million or
$42 per pound sold including royalties and non-cash costs, resulting in
a gross profit of $0.01 million.
During the six months ended January 31, 2013, the Company recorded
revenue of $4.3 million resulting from the sale of 100,000 pounds of U(3)O(8) at an average sales price of $43 per pound. Cash cost of sales
excluding royalties was $2.8 million or $28 per pound sold. Royalties
were $0.5 million or $5 per pound sold and non-cash costs were $0.6
million or $6 per pound sold. Total cost of sales was $3.9 million or
$39 per pound sold including royalties and non-cash costs, resulting in
a gross profit of $0.3 million.
During the three months ended January 31, 2013, the Company recorded a
net loss of $5.6 million or $0.06 per share (2012 Q2: $6.5 million or
$0.09 per share). Expenses totaled $5.6 million (2012 Q2: $8.2
million) and include $1.9 million (2012 Q2: $4.2 million) for mineral
property expenditures, $3.3 million (2012 Q2: $3.7 million) for general
and administrative and $0.4 million (2012 Q2: $0.3 million) for
depreciation, amortization and accretion.
During the six months ended January 31, 2013, the Company recorded a net
loss of $12.9 million or $0.15 per share (six months ended January 31,
2012: $12.1 million or $0.16 per share). Expenses totaled $13.2
million (six months ended January 31, 2012: $15.1 million) and include
$6.3 million (six months ended January 31, 2012: $6.9 million) for
mineral property expenditures, $6.0 million (six months ended January
31, 2012: $7.6 million) for general and administrative and $0.9 million
(six months ended January 31, 2012: $0.6 million) for depreciation,
amortization and accretion.
Net cash used in operating activities for the six months ended January
31, 2013 was $11.8 million (six months ended January 31, 2012: $10.3
million). Net cash used in financing activities for the six months
ended January 31, 2013 was $0.0 million (six months ended January 31,
2012: $1.4 million). Net cash used in investing activities for the six
months ended January 31, 2013 was $0.9 million (six months ended
January 31, 2012: $2.2 million). At January 31, 2013, the Company had
cash and cash equivalents of $12.3 million and working capital of $10.8
Uranium Market Update
During the three months dating from October 31, 2012 through January 31,
2013, spot uranium prices strengthened, with a rise in the Ux
Consulting “Broker Average Price” from $40.63 per pound to $44.00 per
pound U(3)O(8). Spot prices were reported within this range throughout the quarter
and have since pulled back to $42.25 per pound as of March 11, 2013.
Meanwhile, the Ux “Long-Term” uranium contract price dropped $4.00 per
pound from $60 to $56 over the period.
Supply-demand fundamentals contain several catalysts that could
strengthen prices by the end of the current year. The expiration of
the HEU agreement in 2013 will remove about 24 million pounds of
uranium from secondary supply annually. The prospects for a rise in
near-term demand improved as China lifted the moratorium on new reactor
builds and Prime Minister Shinzo Abe was elected in Japan near the end
of the year. Globally, there are 65 new reactors currently under
construction that should add in excess of 30 million pounds of new
demand annually. Compounding the longer term supply deficit, several
major production projects have been delayed or shelved as a result of
weak market conditions. Industry analysts estimate uranium prices need
to be in the $70-$80 range in order to spur investment to develop new
conventional mining projects.
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 now fully
permitted and under construction. 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.
(1) In the Company’s subject technical reports all tonnages, grade, and
contained pounds for exploration targets should not be construed to
reflect a calculated mineral resource (inferred, indicated, or
measured). The potential quantities and grades, as stated in the
technical reports, 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
Certain information contained in this news release constitutes
“forward-looking statements” as such term is used in applicable United
States and Canadian laws. Generally, these forward-looking statements
can be identified by the use of forward-looking terminology such as
“expects” or “does not expect”, “is expected”, “anticipates” or “does
not anticipate”, “plans”, “estimates”, “intends” or “believes”, or that
certain actions, events or results “may”, “could”, “would”, “might” or
“will be taken”, “occur”, or “be achieved”.
Forward-looking statements are based on the opinions and estimates of
management as of the date such statements are made, and are subject to
known and unknown risks, uncertainties and other factors that may cause
the actual results, performance or achievements of UEC to be materially
different from those expressed or implied by such forward-looking
statements. Many of these factors are beyond UEC’s ability to control
or predict. Important factors that may cause actual results to differ
materially and that could impact UEC and the statements contained in
this news release can be found in UEC’s filings with the SEC. Such
risks and other factors include, among others, variations in the
underlying assumptions associated with the estimation or realization of
mineralization, the availability of financing on acceptable terms,
accidents, labor disputes, acts of God and other risks of the mining
industry including, without limitation, risk of liability under
environmental protection legislation, delays in obtaining governmental
approvals or permits, title disputes or claims limitations on insurance
coverage. UEC believes that the expectations reflected in the
forward-looking statements included in this news release are
reasonable; however, no assurance can be given that these expectations
will prove to be correct, and such forward-looking statements should
not be unduly relied upon.
For forward-looking statements in this news release, UEC claims the
protection of the safe harbor for forward-looking statements contained
in the Private Securities Litigation Reform Act of 1995. UEC assumes
no obligation to update or supplement any forward-looking statements
whether as a result of new information, future events or otherwise.
Contact Uranium Energy Corp Investor Relations at:
Toll Free: (866) 748-1030
Fax: (361) 888-5041
SOURCE Uranium Energy Corp