DGAP-News: Uranium Energy Corp Reports Fiscal 2013 Q1 Production Results and Provides Operations Update
(firmenpresse) - DGAP-News: Uranium Energy Corp. / Key word(s): Miscellaneous
Uranium Energy Corp Reports Fiscal 2013 Q1 Production Results and
Provides Operations Update
10.12.2012 / 15:11
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Uranium Energy Corp Reports Fiscal 2013 Q1 Production Results and Provides
Operations Update
Corpus Christi, TX, December 10, 2012 - Uranium Energy Corp (NYSE MKT: UEC,
the 'Company') is pleased to report financial and production results for
the first quarter ended October 31, 2012. Major first quarter highlights
and subsequent events include the following:
- The Goliad ISR Project is Fully Permitted for Production: The Company
has received all of the required authorizations from the Texas
Commission on Environmental Quality, including an Aquifer Exemption
which has also now received concurrence from EPA Region 6. Goliad
production will greatly increase throughput of U3O8 at the Hobson
plant;
- Additional Production Areas at Palangana: Production Area-3 development
was completed and production has now commenced, with development and
permitting activities continuing on Production Areas-4 and 5;
- Sale of 50,000 Pounds U3O8 Generated Revenues of $2.2 Million: During
the quarter, the Company sold 50,000 pounds of U3O8 at $43 per pound
for gross proceeds of $2.2 million, with a cash cost per pound sold of
$26 excluding royalties. Cash cost per pound increased this quarter
due primarily to lower production volume;
- Cumulative Sales to Date: Cumulative sales of U3O8 since commencement
of production to October 31, 2012 total 320,000 pounds at a cash cost
per pound sold of $20 excluding royalties;
- Exploration Drilling on South Texas Projects Continues: The Company
completed extensive drilling campaigns on the Burke Hollow and Channen
Projects. Both projects are located within 50 miles of the Hobson
plant; and
- The Company's Balance Sheet Remains Strong: As of October 31, 2012, the
Company had $17.2 million of cash in the treasury and 34,000 pounds of
U3O8 available for sale in inventory with a market value of
approximately $1.4 million. The Company is a debt-free, 100%-unhedged
producer.
Palangana Mine - Production Update
During the three months ended October 31, 2012, the Palangana Mine produced
29,000 pounds of U3O8 from Production Areas-1 and 2, and the Hobson
processing facility processed 31,000 pounds of U3O8. At October 31, 2012,
the Company had 34,000 pounds of U3O8 available for sale in inventory, with
a market value of approximately $1.4 million.
In early December 2012, with wellfields and well control facilities already
constructed, operations at Production Area-3 have commenced. Initial core
leach studies indicate encouraging recovery yields, and the Company
anticipates it will help to realize a higher level of production at
Palangana without recurrent fluctuations.
Development of additional Palangana production areas is well under way as
described below.
Palangana Mine - Development Update
At Production Areas-4 and 5, the Company has completed the acquisition 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 January 2013.
Production Area-4 monitor welldrilling is near completion. Baseline
sampling of monitor wells is expected in January 2013 followed by a pump
test to satisfy regulatory requirements.
Goliad ISR Project
On December 5, 2012, the Company announced that the final authorization has
been granted for production at its Goliad ISR Project in South Texas. As
announced in previous press releases, the Company received all of the
required authorizations from the Texas Commission on Environmental Quality,
including an Aquifer Exemption, and has now been granted concurrence from
EPA Region 6.
Construction at the Goliad ISR project is now accelerating. Once
production is achieved, throughput of U3O8 to the Hobson plant will
significantly increase.
Burke Hollow Project Exploration Update
From May to October 2012, a total of 266 exploration and offset delineation
holes were drilled at the Burke Hollow Project 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.
The completion of an initial independently qualified resource statement is
underway. In addition, further delineation and exploration drilling to
define extensions of known trends is planned.
Environmental data collection has commenced and will continue throughout
2013. A drainage and ecology study is planned for the proposed mine area
during the spring of 2013 to initiate the permitting process. Regional
baseline wells to establish groundwater quality in the mine area are also
planned shortly after the New Year.
South Texas Exploration and Development Update
Salvo ISR Project
Additional exploration and delineation drilling is planned for the proposed
PAA-1 area in the future.
Channen Project
Forty-three exploration holes were drilled at the Channen Project during
the three months ended October 31, 2012, totaling 39,340 feet. Three Lower
Goliad mineralized horizons located between 700 and 820 feet in depth have
been encountered along an oxidation-reduction interface with a length of
over one mile to date.
Additional exploration drilling will be required in order to delineate
these fronts, with approximately 60% of the lease remaining unexplored.
Paraguay ISR Projects
On October 10, 2012, the Company published an NI 43-101 Exploration Target
at its Oviedo Project of 23-56 million pounds of U3O8 covering a grade
range of 0.040% to 0.052% U3O8. The report was created from results of the
Company's 10,000-meter drilling program, and the compilation of historical
and other geologic data. The complete report was filed October 15, 2012 on
SEDAR(1), and is also available on the Company's website. Currently,
company geologists are performing detailed radon surveys over anomalous
targets developed through synthesis of historic and current exploration
work.
The Company sees its Paraguay holdings - approximately one million acres
covered across the Yuty and Oviedo Projects - as a large-scale ISR-amenable
uranium district with geology that is very similar to that of South Texas.
Financial Review
The following is a financial review of the Company for the three months
ended October 31, 2012, 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 October 31, 2012, the Company recorded
revenue of $2.2 million resulting from the sale of 50,000 pounds of U3O8 at
an average sales price of $43 per pound. Cost of sales including royalties
of $0.3 million totaled $1.9 million, or an average $37 per pound sold
(comprised of cash cost excluding royalties of $26, royalties of $5 and
non-cash cost of $6), resulting in a gross profit of $0.3 million.
During the three months ended October 31, 2012, the Company recorded a net
loss of $7.3 million or $0.09 per share (2012 Q1: $5.6 million or $0.07 per
share). Expenses totaled $7.6 million (2012 Q1: $6.9 million) and include
$4.4 million (2012 Q1: $2.7 million) for mineral property expenditures
largely comprised of costs to complete PA-3 construction and exploration of
the Burke Hollow and Channen Projects, $2.7 million (2012 Q1: $3.9 million)
for general and administrative and $0.5 million (2012 Q1: $0.3 million) for
depreciation, amortization and accretion.
Liquidity
Net cash used in operating activities for the three months ended October
31, 2012 was $7.7 million (2012 Q1: $4.8 million). Net cash provided by
financing activities for the three months ended October 31, 2012 was $0.0
million (2012 Q1: Net cash used in financing activities of $1.0 million).
Net cash used in investing activities for the three months ended October
31, 2012 was $0.1 million (2012 Q1: $1.3 million). At October 31, 2012,
the Company had cash and cash equivalents of $17.2 million and working
capital of $16.2 million.
Uranium Market Update
On October 31, 2012, the spot price of uranium according to Ux Consulting
Company ('Broker Average Price') was $40.63 per pound, down $8.87 for the
quarter. The spot price has since rebounded to $42.50 as of December 3,
2012. The uranium spot price has again found support in the low $40 range,
rebounding from prior price lows established in 2009 and 2010. Meanwhile,
the long-term uranium contract price maintained stability and was quoted at
$60.00 per pound in Ux Consulting Company's last report of the quarter on
October 29, 2012.
The challenges to expand uranium supply will be compounded next year as the
Highly Enriched Uranium or HEU agreement between the U.S. and Russia
expires at the end of 2013. This will reduce secondary supply to the global
uranium market by 24 million pounds per year. The 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 mined supply. In the U.S., the supply
demand imbalance is even more pronounced with 104 operating reactors
consuming 55 million pounds of uranium annually contrasted with domestic
production of only 4 million pounds.
Current spot prices are significantly below levels needed to provide enough
economic incentive for new conventional mine development. Analysts have
stated prices need to be in excess of $80.00 per pound to motivate
producers to develop new projects. The current low spot price has had the
opposite effect, with several large scale projects cancelled or postponed.
On the demand side, the worldwide nuclear build-out continues to be strong,
with the number of reactors currently under construction totaling 65 in 13
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 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.
Contact Uranium Energy Corp Investor Relations at:
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.
(1) 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.
End of Corporate News
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