DGAP-News: Uranium Energy Corp Reports Fiscal 2012 Q2 Production Results
(firmenpresse) - DGAP-News: Uranium Energy Corp. / Key word(s): Quarter Results
Uranium Energy Corp Reports Fiscal 2012 Q2 Production Results
12.03.2012 / 16:00
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NYSE Amex Equities Exchange Symbol - UECUranium Energy Corp Reports Fiscal 2012 Q2 Production Results and Provides
Operations Update
Corpus Christi, TX, March 12, 2012 - Uranium Energy Corp (NYSE AMEX: UEC,
the 'Company') is pleased to report financial and production results for
the second quarter ended January 31, 2012. Major second quarter highlights
include the following:
- Completion of First Full Year of Production: This quarter marked the
completion of the first full year of production, with a cumulative
total of 236,000 pounds of U3O8 produced from Production Area-1 (PA-1)
at an average cash cost(1) of $16 per pound. Of the 236,000 pounds
produced, the Company has sold 120,000 pounds at an average price of
$52 per pound generating revenues of $6.2 million and has 116,000
pounds available for sale in inventory with a market value of $6.0
million;
- Uranium Sales for the Quarter: UEC recorded revenue of $3.1 million
resulting from the sale of 60,000 pounds of U3O8 at a sales price of
$52 per pound with an average cash cost(1) of $17 per pound sold;
- Production Results for the Quarter: Production from Palangana's PA-1
totaled 38,000 pounds and the Hobson facility processed 42,000 pounds
of U3O8. Total cash costs(1) of production were stable with the prior
quarter although the average cash cost(1) increased
quarter-over-quarter due to lower production volume. During the six
months ended January 31, 2012, the average cash cost(1) was $19 per
pound. With Production Area-2 (PA-2) commencing production in late
March 2012, the Company expects to maintain its low-cost production
profile in subsequent quarters;
- Palangana's Production Area-2 on Schedule for Start-up in late March
2012: Initial core leach studies have indicated very encouraging
recovery yields;
- Palangana's Production Area-3 to be Developed in Second Half of 2012: A
permit application was filed with the Texas Commission on Environmental
Quality (TCEQ) for Palangana's Production Area-3 (PA-3) which was
determined to be administratively complete and is now under a technical
review. Similar to PA-2, initial core leach studies have indicated
very encouraging recovery yields for PA-3, with wellfield development
anticipated to commence in the second half of 2012;
- Two New Production Areas, 4 and 5, Have Been Identified: Work is
underway to bring these zones into the production pipeline;
- Advanced Development Initiated at the Goliad ISR Project: The
Radioactive Material License (RML) was received in December 2011, and
was the final state authorization needed for start of construction at
the Goliad ISR Project in South Texas, the Company's second satellite
project;
- Agreement to Acquire Cue Resources Ltd in an All-Stock Transaction:
Cue's Yuty ISR Project is on trend and south of the Company's Coronel
Oviedo Project in Paraguay;
- Drilling Continues at Coronel Oviedo Uranium Project in Paraguay: The
10,000-meter drilling program at this large ISR project commenced in
late November 2011;
- Acquisition of Workman Creek Project in Arizona: The Company acquired
an undivided 100% interest in the Workman Creek Project and
subsequently established an inferred resource of 5.5 million pounds of
U3O8; and
- The Company's balance sheet remains strong: As of January 31, 2012, the
Company had $16.9 million of cash in the treasury and 116,000 lbs. of
U3O8 available for sale in inventory with a market value of $6.0
million. The Company is a debt-free, 100%-unhedged producer.
Palangana Mine - Production Update
During the six months ended January 31, 2012, the Palangana Mine produced
105,000 pounds of U3O8 and the Hobson facility processed 112,000 pounds of
U3O8, at an average cash cost(1) of $19 per pound. During the three months
ended January 31, 2012, the Palangana Mine produced 38,000 pounds of U3O8
and the Hobson facility processed 42,000 pounds of U3O8, at an average cash
cost(1) of $27 per pound. It should be noted that the total cash costs(1)
of production during the first and second quarters remained stable so
thatthe increase in the average cash cost(1) per pound was a direct result
of
the lower pounds produced during the second quarter. With Production
Area-2 (PA-2) commencing production in late March 2012, the Company expects
to maintain its low-cost production profile in subsequent quarters.
Since the commencement of production to January 31, 2012, a total of
236,000 pounds at an average cash cost(1) of $16 per pound have been
processed. At January 31, 2012, the Company had 116,000 pounds of U3O8
available for sale in inventory produced at an average cash cost(1) of $18
per pound, with a market value of $6.0 million based on an average uranium
spot price of $52 per pound.
Production-to-date has been entirely from Production Area-1 (PA-1) at
Palangana. Development of multiple Palangana production areas is well
under way, with Production Area-2 (PA-2) scheduled next for start-up in
late March 2012. A summary of Palangana's Production Areas 1 through 3 and
an introduction to the development of Production Areas 4 and 5 are provided
below.
The three-phase startup of PA-1 at Palangana is continuing with the average
depth of the wells at approximately 450 feet. Production initially
commenced at the Phase I wellfield in November 2010, followed by the Phase
II wellfield in April 2011, and the final Phase III wellfield having
commenced production in early October 2011.
Performance variations at PA-1 continued to be addressed which included the
addition of new wells to increase production capability at all three phases
during the quarter. At Phase I, a combination of new well additions and
the recompletion of existing injection and production wells resulted in the
stabilization of production performance. At Phases II and III, in addition
to the drilling of new wells, recompletion of existing injection and
production wells were initiated in January 2012, and work is still
underway.
At PA-2, wellfield drilling and casing continued through the quarter, with
a majority of the wells being completed. Initial core leach studies have
indicated very encouraging recovery yields. The first of two phases at
PA-2 is on schedule for a late March 2012 start-up.
Palangana Mine - Development Update
At Production Area-3, a Production Area Authorization application was
submitted to the TCEQ during the quarter which was determined to be
administratively complete, and is now under technical review. Wellfield
development of injection and production wells will coincide with the
progress made on the TCEQ application, and may commence as early as this
summer. Similar to PA-2, initial core leach studies have indicated very
encouraging recovery yields.
The Company is pleased to be adding Production Areas 4 and 5 to the
Palangana production pipeline. During the first quarter, exploration
drilling was completed at these areas, with four drill rigs targeting
several lightly explored areas. Three mineralized trends were further
delineated by drilling 66 holes. Ore-quality mineralization in these
trends occurs between 300 to 600 feet in depth. Additional delineation
drilling and coring are scheduled to be conducted in these areas in the
near future.
Goliad ISR Project - Advanced Development Update
On December 20, 2011 the TCEQ authorized the last remaining license for the
Goliad ISR Project, the Radioactive Material License. The project is now
fully licensed with the TCEQ for development and mining of the initial
Production Area. Materials are being procured with construction of the
satellite plant and development of the initial wellfield anticipated to
commence in May and June 2012. The Company is anticipating concurrence
from the EPA-Region 6 on the aquifer exemption which has already been
issued by the state.
Salvo ISR Project Exploration and Development Update
Exploration and delineation drilling at the Salvo Project continued
throughout the quarter with two drill rigs having completed 44 drill holes
targeting extensions of known mineralized trends established from review of
the Company's extensive data base. In addition, three core holes were
completed, with core samples currently in the process of being analyzed and
tested by Energy Labs in Casper, Wyoming. Determination of bulk density,
porosity and permeability values, and importantly, leach amenability tests
are needed in order to advance the Salvo ISR Project into the development
phase in the near future. Additional assays and leach studies are
scheduled to be performed at the Hobson processing facility. The Company is
advancing the Salvo ISR Project to become the next producing satellite
after Goliad, and is planning to initiate production permitting.
Arizona Update
Anderson Project
During the quarter, work was initiated on a detailed three-dimensional
resource model and preparation of the NI 43-101 Technical Report for the
Anderson Project located in Yapavai County, Arizona. Efforts were also
expended on compilation and rectification of the Anderson historic drilling
database. It is anticipated that the independently prepared NI 43-101
Technical Report for the Anderson Project will be completed during the
upcoming quarter.
Workman Creek Project
Work was completed this quarter on an NI 43-101 Technical Report for the
3,620-acre Workman Creek, Arizona project. The Technical Report confirmed
a compliant Inferred Resource of 5.5 million pounds of U3O8.
Paraguay ISR Drilling Campaign Update
Work continues on the 10,000-meter drill program at the Coronel Oviedo
Project in eastern Paraguay. The drilling is being carried out by three
drill rigs on 3-5 km spacing in order to augment previous reconnaissance
work and provide additional information of the known historic uranium
mineralization trends. The Company is more than 50% through the work
program, which is anticipated to complete by June 2012.
Financial Review
The following is a financial review of the Company for the three and six
months ended January 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-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, 2012 (2012 Q2), the Company
recorded revenue of $3.1 million resulting from the sale of 60,000 pounds
of U3O8 at an average sales price of $52 per pound. Cost of sales,
including royalties of $0.4 million, totaled $1.7 million or an average of
$24 per pound sold (cash cost (1) per pound sold of $17 excluding
royalties).
During the six months ended January 31, 2012, the Company recorded revenue
of $6.2 million resulting from the sale of 120,000 pounds of U3O8 at an
average sales price of $52 per pound. Cost of sales, including royalties
of $0.7 million, totaled $3.2 million or an average of $21 per pound sold
(cash cost (1) per pound sold of $15 excluding royalties).
During 2012 Q2, the Company recorded a net loss of $6.5 million or $0.09
per share (three months ended January31, 2011 (2011 Q2): $6.6 million or
$0.10 per share). Expenses for 2012 Q2 totaled $8.2 million (2011 Q2: $6.7
million) and include $4.2 million (2011 Q2: $2.1 million) for mineral
property expenditures, $3.7 million (2011 Q2: $4.3 million) for general and
administrative and $0.3 million (2011 Q2: $0.3 million) for depreciation,
depletion and accretion.
During the six month ended January 31, 2012, the Company recorded a net
loss of $12.1 million or $0.16 per share (six months ended January 31,
2011: $15.5 million or $0.24 per share). Expenses for the six months ended
January 31, 2012 totaled $15.1 million (six months ended January 31, 2011:
$15.6 million) and include $6.9 million (six months ended January 31, 2011:
$5.5 million) for mineral property expenditures, $7.6 million (six months
ended January 31, 2011: $9.5 million) for general and administrative and
$0.6 million (six months ended January 31, 2011: $0.5 million) for
depreciation, depletion 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.
Liquidity
Net cash used in operating activities for the six months ended January 31,
2012 was $10.3 million compared to $13.7 million for the six months ended
January 31, 2011. Net cash used in financing activities for the six months
ended January 31, 2012 was $1.4 million compared to net cash provided of
$28.7 million for the six months ended January 31, 2011. Net cash used in
investing activities for the six months ended January 31, 2012 was $2.2
million compared to $2.4 million for the six months ended January 31, 2011.
As of January 31, 2012, the Company had cash and cash equivalents of $16.9
million and working capital of $15.7 million.
Acquisitions Update
The recent downturn in the uranium market has provided the Company with an
excellent opportunity to make strategic acquisitions at attractive
discounts to historical valuations. The Company entered into the following
transactions during or subsequent to the second quarter:
Workman Creek Project in Arizona
On November 30, 2011, the Company completed the acquisition of an undivided
100% interest in the highly prospective 3,620-acre Workman Creek Project
located in Gila County, Arizona from Cooper Minerals, Inc. for
consideration of a cash payment of $84,640 and the issuance of 300,000
restricted common shares of the Company.
Acquisition of Cue Resources Ltd.
In January 2012, the Company agreed to acquire Cue Resources Ltd. which,
when complete, will result in the acquisition of a 100% interest in the
570,000-acre Yuty ISR Project located in southeastern Paraguay. Completion
of the transaction is subject to various closing conditions. The Yuty
Project has received 31,000 meters of drilling in recent years and has a
current NI 43-101 Measured and Indicated resource of 8.9 million pounds
U3O8 and an Inferred resource of 2.1 million pounds at grades averaging
approximately 0.05%. The project area is on strike with and south of the
Company's Coronel Oviedo ISR Project.
Coronel Oviedo in Paraguay
In February 2012, through an amendment to a previous property acquisition
agreement, the Company agreed to acquire a 100% interest in an additional
247,000 acres, with an option to acquire a further 493,000 acres, located
in the area of the Coronel Oviedo Project, subject to a 1.5% gross
overriding royalty. This transaction is anticipated to complete during the
third quarter and involves minimal dilution to the Company.
Uranium Market Update
During the Company's second quarter ended January 31, 2012, the spot price
of uranium was unchanged at $52.00/lb. according to the Ux Consulting
Company. The spot price is finding strong support in the low $50's, and
the long-term contract uranium price remained at $61.00/lb. The worldwide
nuclear build-out continues and the number of reactors currently under
construction totals 62 in 15 different countries. China, India, Russia and
South Korea continue to leadthe global nuclear build-out, and these
governments have reaffirmed their commitment to nuclear energy.
China's National Energy Administration stated in a February 14, 2012 report
that the country's installed nuclear power capacity is expected to reach 80
gigawatts (GW) by 2020, topping experts' expectations of 60-70 GW. The
increase from 70GW to 80GW equates to approximately 37.5 million pounds of
additional uranium demand between 2012 and 2020.
India's Power Minister, speaking at a nuclear symposium on February 22,
2012, stated that his country plans to have nuclear power generation
capacity of 63 GW in the next 20 years. India is recognized to be second
only to China as far as new builds go, but has been slower in developing
and building reactors. According to analysts, assuming the target of 63 GW,
a 14-fold expansion in nuclear power, India will require in the range of 40
MM pounds of U3O8 annually by 2030.
In the United States, on February 9, 2012, the U.S. Nuclear Regulatory
Commission approved licenses for two new nuclear reactors. This marks the
first approvals in over 30 years. The reactors will be built in Georgia at
the Vogtle nuclear power plant complex by a consortium of utilities led by
Southern Company. The reactors are expected to produce enough power for
one million homes.
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 has been granted its Mine Permit and
is in the initial stages of mine 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.
Contact North America: Investor Relations, Uranium Energy Corp:
Toll Free: (866) 748-1030
Fax: (361) 888-5041
E-mail: info(at)uraniumenergy.com
Stock Exchange Information:
NYSE-AMEX: UEC
Frankfurt Stock Exchange Symbol: U6Z
WKN: AØJDRR
ISN: US916896103
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.
Under NI 43-101 an issuer may disclose an estimate of the quantity and
grade of a historical mineral resource made before the instrument came into
force if the estimate is an estimate of mineral resources prepared by or on
behalf of a person or company other than the issuer and the disclosure
identifies the source and date of the historical estimate, confirms that
the historical estimate is relevant, comments on its reliability, and
explains any differences between the categories used in the historical
resource and those permitted by NI 43-101. Any such resources are
historical in nature and were compiled before the implementation of NI
43-101 reporting standards, and the Company may not have independently
verified any such resource so is not treating them as current resources.
Any such historical resources were prepared to industry standards in place
at the time and are considered relevant today. Any such estimate, although
prepared by experienced personnel and considered relevant should not be
relied on.
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.
End of Corporate News
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