DGAP-News: Uranium Energy Corp. Reports Fiscal 2012 Q3 Production Results and Provides Operations Update
(firmenpresse) - DGAP-News: Uranium Energy Corp. / Key word(s): Quarter Results
Uranium Energy Corp. Reports Fiscal 2012 Q3 Production Results and
Provides Operations Update
12.06.2012 / 17:00
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NYSE MKT Equities Exchange Symbol - UEC
Uranium Energy Corp Reports Fiscal 2012 Q3 Production Results and Provides
Operations Update
Corpus Christi, TX, June 11, 2012 - Uranium Energy Corp (NYSE MKT: UEC, the
'Company') is pleased to report financial and production results for the
third quarter ended April 30, 2012. Major third quarter highlights include
the following:
- Cumulative Production and Sales to Date: Cumulative production to date
totals 273,000 pounds of U3O8 produced from Palangana at an average
cash cost(1) of $18 per pound. Of the 273,000 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 153,000 pounds available
for sale in inventory with a market value of approximately $7.9
million;
- Production Results for the Quarter: Production from Palangana totaled
34,000 pounds and the Hobson facility processed 37,000 pounds of U3O8.
Total cash costs(1) of production were stable with the prior quarter.
During the nine months ended April 30, 2012, total production was
139,000 pounds of U3O8 at an average cash cost(1) of $22 per pound;
- Palangana's Production Area-2 Commenced Operations on Schedule in Late
March 2012: Recompletion of existing wells at PA-1 and new well
additions from PA-2 have contributed to production stabilization.
Palangana production for May was more than 16,000 pounds of U3O8;
- Completion of Equity Financing: 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. These funds enable the Company to expand and expedite its
Texas growth strategy in terms of new projects, resources and
prospective production;
- Additional Projects Acquired in South Texas: The Company acquired the
rights to explore for uranium on the highly-prospective Burke Hollow
Project in Bee County. Subsequent to April 30, 2012, the Company
initiated its first drilling program at Burke Hollow. The Company also
acquired the rights to explore for uranium on the Channen Project in
Goliad County. Both projects are within 50 miles of the Hobson
processing facility;
- Established Major Resource at Anderson Project in Arizona: Subsequent
to April 30, 2012, the Company reported an Indicated Resource of 17
million pounds of U3O8 and an Inferred Resource of 12 million pounds of
U3O8 at its Anderson Project;
- Additional Production Areas at Palangana: Production Area-3 (PA-3) is
scheduled for development in the second half of 2012, with permits
under technical review. Additionally, 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 to begin construction at the
Goliad ISR Project and is awaiting the regional EPA's concurrence on
the aquifer exemption granted by the State of Texas;
- Acquisition of Cue Resources Ltd.and the Yuty ISR Project Completed:
The Company's Yuty Project in Paraguay has a total defined resource of
11.1 million pounds U3O8 and is on trend and directly south of the
Company's Coronel Oviedo Project. Integration with the Company's
pre-existing operations in Paraguay has been successfully completed;
and
- The Company's Balance Sheet Remains Strong: As of April 30, 2012, the
Company had $26.2 million of cash in the treasury and 153,000 pounds of
U3O8 available for sale in inventory with a market value of
approximately $7.9 million. The Company is a debt-free, 100%-unhedged
producer.
Palangana Mine - Production Update
During the nine months ended April 30, 2012, the Palangana Mine produced
139,000 pounds of U3O8 and the Hobson facility processed 148,000 pounds of
U3O8, at an average cash cost(1) of $22 per pound. During the three months
ended April 30, 2012, the Palangana Mine produced 34,000 pounds of U3O8 and
the Hobson facility processed 37,000 pounds of U3O8, at an average cash
cost(1) of $29 per pound. It should be noted that the total cash costs(1)
of production during the last three quarters remained stable, such that the
increase in the average cash cost(1) per pound was a direct result of the
lower pounds produced during the second and third quarters.
Since the commencement of production to April 30, 2012, a total of 273,000
pounds at an average cash cost(1) of $18 per pound have been processed. At
April 30, 2012, the Company had 153,000 pounds of U3O8 available for sale
in inventory produced at an average cash cost(1) of $21 per pound, with a
market value of approximately $7.9 million.
Production-to-date has been almost entirely from Production Area-1 (PA-1),
with Production Area-2 (PA-2) commencing production in late March 2012 and
continuing its ramp up. A combination of new well additions from PA-2 and
the recompletion of existing wells at all three phases of PA-1 have
contributed to stabilizing production performance. Subsequently and as a
direct result of these activities, Palangana production for the month of
May was more than 16,000 pounds of U3O8.
Development of multiple Palangana production areas is well under way as
described below.
Palangana Mine - Development Update
Production Area-3 (PA-3) is scheduled for development in the second half of
2012, and wellfield development of injection and production wells will
coincide with the progress made on the Production Area application
submitted last quarter to the Texas Commission on Environmental Quality
(TCEQ) and currently under technical review. The required surety bond has
been posted to initiate drilling and casing of production wells in PA-3,
with 16 of 65 planned cased wells having been completed. Initial core leach
studies indicate encouraging recovery yields at PA-3.
At Production Area-4 (PA-4) and Production Area-5 (PA-5), the Company has
initiated activities in acquiring environmental information to enlarge its
permit area to include both areas within its production pipeline.
Ecological and archeological baseline information has been developed to
include in the mine permit amendment application scheduled for submission
during this calendar year fourth quarter. Amendments to the base
Radioactive Materials License and Aquifer Exemption are also being worked
on at the present time for submission during the fourth quarter as well.
Goliad ISR Project - Advanced Development Update
The Company has received all of the required permits to begin construction
at the Goliad ISR Project. To initiate uranium recovery operations at the
site, the Company is awaiting the regional EPA's concurrence on the aquifer
exemption granted by the State of Texas.
As reported by the Company on May 21, 2012, the regional EPA requested
additional information, as they frequently do, from the TCEQ regarding
UEC's aquifer exemption at its Goliad ISR project. As noted in its letter
to the TCEQ, the regional EPA has issued more than 30 aquifer exemptions
for in-situ uranium mining in Texas. The Company will continue to work
with the TCEQ and the EPA as the review process moves forward.
Salvo ISR Project Exploration and Development Update
Two drill rigs were active throughout the majority of the third quarter at
the Salvo ISR Project, completing 45 exploration holes and two core holes.
Twelve of the exploration holes displayed grade-thickness values meeting or
exceeding a 0.30 GT cutoff criterion. The Company's engineers estimate that
zones with a GT greater than 0.30 will be shown to be producible. Core
samples are currently being tested for leach amenability at the Hobson
facility, with additional tests being run at Energy Labs in Casper,
Wyoming. Results are expected soon.
Future Production Area One exploration and delineation drilling is nearing
completion, 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.
Burke Hollow Project
The Company acquired the rights to explore for uranium on the Burke Hollow
Project, a 17,510-acre property located in eastern Bee County, Texas. This
previously explored project is situated on the Goliad trend within the
prolific South Texas Uranium Belt, and is located approximately 50 miles to
the southeast of the Company's Hobson uranium processing facility.
Subsequent to April 30, 2012, upon receipt of exploration permits from the
Railroad Commission of Texas, the Company initiated an aggressive
exploration program including a drilling campaign to extend and delineate
mineralized zones discovered in 1993 by Total Minerals. Drilling will also
include a statistical grid covering the entire property.
Channen Project
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 on the Goliad trend within the prolific South Texas
Uranium Belt, and is also located approximately 50 miles to the southeast
of the Company's Hobson uranium processing facility.
The Company is currently planning an aggressive exploration program
including a drilling campaign that will be initiated upon receipt of
exploration permits from the Railroad Commission of Texas. It is
anticipated that the drill program will initially consist of a statistical
grid covering the entire property.
Arizona Updates
Anderson Project
In May 2012, the Company announced a mineral resource for the Anderson
Project located in Yapavai County, Arizona with an Indicated Resource of 17
million pounds of U3O8 at grades averaging 0.04%, and an Inferred Resource
of 12 million pounds of U3O8 at grades averaging 0.04%. A scoping study
along with baseline permitting is currently underway.
Workman Creek Project
During the quarter, an independently prepared NI 43-101 Technical Report
was completed and published for the Workman Creek Project located in Gila
County, Arizona. The Technical Report confirmed an Inferred Resource of
5.5 million pounds of U3O8 at grades averaging 0.086%.
Paraguay Update
The Company has completed a 10,000-meter drill program at the Coronel
Oviedo Project located in eastern Paraguay. Results from this program are
being compiled and will be announced shortly. An NI 43-101 Technical
Report is also underway and expected to be published in the near future.
Financial Review
The following is a financial review of the Company for the three and nine
months ended April 30, 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 nine months ended April 30, 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 poundsold of $15 excluding royalties).
During the three months ended April 30, 2012 (2012 Q3), the Company
recorded a net loss of $8.2 million or $0.10 per share (three months ended
April 30, 2011 (2011 Q3): $6.2 million or $0.09 per share). Expenses for
2012 Q3 totaled $8.1 million (2011 Q3: $6.3 million) and include $4.0
million (2011 Q3: $2.9 million) for mineral property expenditures, $3.8
million (2011 Q3: $3.0 million) for general and administrative and $0.3
million (2011 Q3: $0.3 million) for depreciation, amortization and
accretion.
During the nine months ended April 30, 2012, the Company recorded a net
loss of $20.3 million or $0.27 per share (nine months ended April 30, 2011:
$21.8 million or $0.32 per share). Expenses for the nine months ended
April 30, 2012 totaled $23.2 million (nine months ended April 30, 2011:
$21.8 million) and include $10.9 million (nine months ended April 30, 2011:
$8.5 million) for mineral property expenditures, $11.4 million (nine months
ended April 30, 2011: $12.5 million) for general and administrative and
$0.9 million (nine months ended April 30, 2011: $0.8 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.
Liquidity
Net cash used in operating activities for the nine months ended April 30,
2012 was $18.6 million compared to $19.2 million for the nine months ended
April 30, 2011. Net cash provided by financing activities for the nine
months ended April 30, 2012 was $20.1 million compared to $34.2 million for
the nine months ended April 30, 2011. Net cash used in investing
activities for the nine months ended April 30, 2012 was $6.0 million
compared to $2.9 million for the nine months ended April 30, 2011. At
April 30, 2012, the Company had cash and cash equivalents of $26.2 million
and working capital of $26.4 million.
Corporate Acquisition 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
transaction during the third quarter:
Acquisition of Cue Resources Ltd.
In March 2012, the Company acquired Cue Resources Ltd. which resulted in
the acquisition of a 100% interest in the 570,000-acre Yuty Project located
in southeastern Paraguay. 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 2.2 million
pounds at grades averaging approximately 0.05%. The project area is on
strike with and south of the Company's Coronel Oviedo Project. Preliminary
studies indicate amenability to extraction by in-situ recovery.
Integration with the Company's pre-existing operations in Paraguay has been
successfully completed.
Financing
In April 2012, the Company completed a public offering of 6,246,078 shares
of its common stock at a price of $3.60 per Share for gross proceeds of
$22,485,880, including 686,078 shares sold pursuant to an over-allotment
option exercised by the placement agents. Funds are being applied to
expedite and expand operations in South Texas.
Uranium Market Update
At April 30, 2012, the spot price of uranium was $51.75/lb., down $0.25 for
the quarter 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 recently improved $1.50/lb. to $61.50/lb., the first increase in the
long-term price since January 2011 and post-Fukushima.
Recently, there were several positive developments for the industry. A few
weeks ago, the local government of the Japanese town of Ohi voted 11-1 in
favor of the restart of two nuclear reactors at Kansai Electric's Ohi
plant. And last week, statements made by Japan's Prime Minister Yoshihiko
Noda confirmed the importance and his continued support for thisrestart:
'It is my decision that Ohi reactors No.3 and No.4 should be restarted to
protect the people's livelihoods. cheap and stable electricity is vital.
If all the reactors that previously provided 30 percent of Japan's
electricity supply are halted, or kept idle, Japanese society cannot
survive.' The restart of some of Japan's 50 idled nuclear reactors, along
with China's expected announcement confirming the resumption of its new
reactor approval program, could provide significant positive catalysts for
the uranium market in the near term.
Over the longer term, the expected expiration of the Highly Enriched
Uranium or HEU agreement between the U.S. and Russia at the end of 2013
would reduce supply to the global uranium market by 24 million pounds per
year. This reduction would be significant given the current worldwide
supply imbalance to meet operating reactor requirements, and particularly
in the U.S., where 104 operating reactors - producing nearly 20% of the
country's electricity - consume 55 million pounds of uranium annually of
which 95% is imported.
The worldwide nuclear build-out continues with the number of reactors
currently under construction totaling 63 in 13 different countries. China,
India, Russia and South Korea have reaffirmed their commitment to nuclear
energy and continue to lead the global nuclear build-out.
The technical information in this news release has been prepared in
accordance with the Canadian regulatory requirements set out in NI 43-101
and was reviewed by Clyde L. Yancey, P.G., Vice President-Exploration for
the Company, a qualified person under NI 43-101.
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 MKT: 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.
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 aresult 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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