DGAP-News: Uranium Energy Corp Reports Fiscal 2013 Financial Results and Provides Operations Update
(firmenpresse) - DGAP-News: Uranium Energy Corp. / Key word(s): Final Results
Uranium Energy Corp Reports Fiscal 2013 Financial Results and Provides
Operations Update
15.10.2013 / 17:50
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Uranium Energy Corp Reports Fiscal 2013 Financial Results and Provides
Operations Update
Corpus Christi, TX, October 15, 2013 - Uranium Energy Corp (NYSE MKT: UEC,
the 'Company') is pleased to report financial and operational results for
the fourth quarter and for the fiscal year ended July 31, 2013. Major
highlights include the following:
- Fiscal-Year Sales of 220,000 Pounds U3O8 Generated Revenues of $9.0
Million: For the fiscal year, a total of 220,000 pounds of U3O8 were
sold at an average sales price of $41 per pound for gross proceeds of
$9.0 million, with an average cash cost(1) per pound sold of $26
excluding royalties. During the fourth quarter, the Company completed
its fourth uranium sale of 50,000 pounds of U3O8 at $40 per pound for
gross proceeds of $2.0 million, with a cash cost(1) per pound sold of
$25 excluding royalties;
- Hobson Processed 194,000 Pounds U3O8: During the fiscal year ended July
31, 2013, a total of 194,000 pounds of U3O8 were dried and drummed at
the Hobson processing facility;
- The Goliad ISR Project Continues to Advance: The fully-permitted Goliad
ISR Project continues to advance with previously ordered processing
equipment scheduled to arrive in November 2013. The recovery of
uranium is set to be available to come online in fiscal 2014;
- Palangana Project Expansion: Production Area-3 commenced uranium
recovery in December 2012. Production Area-4 is targeted to be fully
permitted with uranium recovery available to commence in fiscal 2014,
while permitting at Production Areas-5 and 6 continues;
- Initial Resource Established at Burke Hollow Project in South Texas:
The Company reported an NI 43-101 compliant Inferred Resource of 2.89
million pounds of U3O8 and an additional exploration target of up to
7.2 million pounds of U3O8. The mine permit application is targeted to
be submitted to the Texas Commission on Environmental Quality by early
2014; and
- The Company's Balance Sheet Remains Strong: As of July 31, 2013, the
Company had $14.2 million of cash in the treasury and 27,000 pounds of
U3O8 available for sale in inventory with a market value of
approximately $0.9 million. A further $10 million in cash is available
through draw-downs on a Credit Facility.
President and CEO Amir Adnani stated, 'We are continuing to make progress
with our growth strategy in South Texas while maintaining a strong balance
sheet and financial flexibility. The Company's scalable hub-and-spoke
strategy is a confirmed model for increasing uranium extraction and
maintaining a low-cost profile. We are executing on this plan with the
Goliad, Burke Hollow, Palangana and additional South Texas expansion
projects.'
Goliad ISR Project
In December 2012, EPA concurrence was received for an Aquifer Exemption,
which was the last and final permit needed to begin uranium extraction. 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. Long-lead items for processing equipment andsupplies for the
construction of the satellite facility and wellfield have been ordered and
are scheduled to arrive in November 2013. The project is on budget, and
uranium extraction is set to be available to come online in fiscal 2014.
Palangana Mine Update
During the fourth quarter, the Palangana Mine recovered 37,000 pounds of
U3O8, for a total of 183,000 pounds of U3O8 delivered to Hobson for
processing during the fiscal year ended July 31, 2013. During the fourth
quarter, the Hobson processing facility processed 40,000 pounds of U3O8,
for a total 194,000 pounds of U3O8 processed during the fiscal year ended
July 31, 2013.
Since the commencement of uranium extraction to July 31, 2013, a total of
517,000 pounds of U3O8 have been dried and drummed. At July 31, 2013, the
Company had 27,000 pounds of U3O8 available for sale in inventory, with a
market value of approximately $0.9 million.
Palangana Mine - Project Expansion
At Production Area-4, all monitor wells were sampled for baseline
parameters and a pumping test was completed. Production Area-4 is targeted
to be fully permitted and uranium extraction is set to be available to
commence in fiscal year 2014.
At Production Area-5, a mine permit application and aquifer exemption
amendment application were submitted to the Texas Commission on
Environmental Quality (TCEQ) in May 2013. Both applications have been
acknowledged as administratively complete and are under technical review.
At Production Area-6, mine permit, Radioactive Material License and aquifer
exemption amendment applications were submitted to the TCEQ in May 2013.
All three applications have been acknowledged as administratively complete
and are under technical review.
Burke Hollow ISR Project Exploration Update
In February 2013, the Company published an NI 43-101 technical report for
the Burke Hollow ISR Project disclosing an inferred resource estimate of
2.89 million pounds of U3O8 with an average grade of 0.047% U3O8. In
addition, the technical report disclosed two exploration targets
potentially containing 1.8 to 7.2 million pounds of U3O8 at a grade range
of 0.03% to 0.06% U3O8.
During Fiscal 2013, 179 exploration holes totaling 75,800 feet were drilled
at the Burke Hollow Project to depths ranging from a minimum 240 feet to a
maximum 940 feet, with an average depth of 423 feet. As of July 31, 2013,
a total of 292 exploration holes totaling 137,000 feet have been drilled to
depths ranging from a minimum 160 feet to a maximum of 940 feet, with an
average depth of 466 feet.
Only 30% of the Burke Hollow land package has been explored to date and the
Company is planning an 80-hole delineation and extension drill program.
Coring, bottle roll tests and metallurgical analysis will follow with an
updated NI 43-101 report for Burke Hollow. The mine permit and radioactive
material license applications are targeted to be submitted to the TCEQ by
early 2014.
Paraguay ISR Project Update
Oviedo Project
In October 2012, the Company announced an NI 43-101 Exploration Target of
23 to 56 million pounds of U3O8 for the Oviedo Project located in eastern
Paraguay. The report was generated by a 10,000-meter drilling program, a
detailed carborne radiometric survey, Landsat-based structural and
geochemical analysis, surface mapping, sampling and other exploration
efforts conducted by the Company, coupled with the compilation of historic
exploration work by Crescent Resources and The Anschutz Corporation.
Colorado Update
Slick Rock Project
In January 2013, the Company announced a mineral resource for the Slick
Rock Project located in San Miguel County, Colorado consisting of an NI
43-101-compliant Inferred Resource of 4.6 million pounds of U3O8 at grades
averaging 0.296%.
Key Personnel Appointment
In December 2012, the Company announced the appointment of former United
States Energy Secretary Spencer Abraham as Chairman of the Company's
Advisory Board. Spencer Abraham served as a U.S. Senator from Michigan
from 1995 to 2001 and served as Secretary of Energy from 2001 to 2005.
Since 2005, Abraham hasbeen the Chairman and Chief Executive Officer of
The Abraham Group, an international strategic consulting firm based in
Washington, D.C. Abraham is an alumnus of Michigan State University and
Harvard Law School. He currently serves on the board of Occidental
Petroleum Corp. and was previously Chairman of Areva, Inc., the North
American subsidiary of AREVA.
Credit Facility
In July 2013, the Company entered into a $20.0 million senior secured
Credit Facility with Sprott Resource Lending Partnership and CEF (Capital
Markets) Limited. Under the Credit Facility, the Company received initial
funding in the amount of $10.0 million, with an additional $5.0 million
available for draw-down pursuant to a second advance, and a further
additional $5.0 million available for draw-down pursuant to a third
advance, in each case in accordance with the terms of the Credit Agreement.
The Company is utilizing the proceeds of the Credit Facility for the
development, operation and maintenance of its Hobson, Goliad and Palangana
projects and for working capital purposes.
Financial Review
The following is a financial review of the Company for the three and twelve
months ended July 31, 2013, 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: Three Months Ended July 31, 2013
During the three months ended July 31, 2013, the Company recorded revenue
of $2.0 million resulting from the sale of 50,000 pounds of U3O8 at an
average sales price of $40 per pound. Cash and non-cash cost of sales,
including royalties of $0.2 million and before an inventory write-down of
$0.4 million, totaled $1.8 million or an average of $36 per pound (cash
cost(1) per pound sold of $25 excluding royalties and an inventory
write-down), resulting in a gross profit of $0.2 million. Cost of sales
totaled $2.2 million, including an inventory write-down of $0.4 million to
net realizable value, resulting in a negative gross margin of $0.2 million.
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 U3O8 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 three months ended July 31, 2013, the Company recorded a net
loss of $5.1 million or $0.06 per share (2012 Q4: $4.8 million or $0.06 per
share). Expenses totaled $4.8 million (2012 Q4: $7.0 million) and include
$1.9 million (2012 Q4: $4.0 million) for mineral property expenditures,
$2.6 million (2012 Q4: $2.7 million) for general and administrative and
$0.3 million (2012 Q4: $0.3 million) for depreciation, amortization and
accretion.
Results of Operations: Fiscal Year Ended July 31, 2013
During the fiscal year ended July 31, 2013, the Company recorded revenue of
$9.0 million resulting from the sale of 220,000 pounds of U3O8 at an
average sales price of $41 per pound. Cash and non-cash cost of sales,
including royalties of $1.0 million but before an inventory write-down of
$0.4 million, totaled $8.0 million or an average of $36 per pound (cash
cost(1) per pound sold of $26 excluding royalties and an inventory
write-down), resulting in a gross profit of $1.0 million. Cost of sales
totaled $8.4 million, including an inventory write-down of $0.4 million to
net realizable value, resulting in a gross profit of $0.6 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 U3O8 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),
resultingin a gross profit of $5.6 million.
During the fiscal year ended July 31, 2013, the Company recorded a net loss
of $21.9 million or $0.26 per share (Fiscal 2012: $25.1 million or $0.32
per share). Expenses totaled $22.4 million (Fiscal 2012: $30.3 million)
and include $10.0 million (Fiscal 2012: $14.9 million) for mineral property
expenditures, $10.8 million (Fiscal 2012: $14.1 million) for general and
administrative and $1.6 million (Fiscal 2012: $1.3 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 an inventory write-down recorded
during the three months ended July 31, 2013 and non-cash components
comprised of depreciation, depletion and stock-based compensation.
Liquidity
Net cash used in operating activities for the fiscal year ended July 31,
2013 was $19.3 million (Fiscal 2012: $19.2 million). Net cash provided by
financing activities was $9.4 million (Fiscal 2012: $20.2 million). Net
cash used in investing activities was $0.9 million (Fiscal 2012: $6.7
million). At July 31, 2013, the Company had cash and cash equivalents of
$14.2 million and working capital of $10.9 million.
Uranium Market Update
Nuclear generation in the United States was about 771 billion
kilowatt-hours in 2012, representing 19.0% of the country's total
electrical generation. The U.S. remains the world's largest consumer of
uranium with the U.S. Energy Information Administration showing over 50
million pounds of U3O8 loaded into U.S. reactors in their most recent
annual data. However, domestic production was only 4.2 million pounds in
2012. As of July 2013, the operating U.S. reactor fleet stands at 100
reactors, and there are 5 new commercial reactors currently in various
stages of construction (Vogtle 3&4, Summer 2&3 and Watts Bar 2).
With the world's population exceeding 7 billion people and growing, the
need for electricity is rising and is an important driver for the projected
long-term increase in uranium demand. Planned reactor growth in countries
like China, South Korea, United Arab Emirates, India, Saudi Arabia, Russia
and others are testimony to the overall confidence in nuclear power to
provide safe, economical, carbon-free energy as part of their supply mix.
Currently, the World Nuclear Association shows 432 reactors operating, 68
new reactors under construction, 162 reactors planned or on order and
another 316 proposed. Translated into uranium demand, UxC projects an
increase from about 171 million pounds in 2013 to over 207 million pounds
in 2020 and about 262 million pounds by 2027.
Japan's Fukushima Daiichi accident, occurring as a result of the March 11,
2011 earthquake and subsequent tsunami, continues to have a substantial
impact on the nuclear industry. While new safety programs are being
implemented from lessons learned at Fukushima, Japan's nuclear fleet
remains largely offline and is contributing to a near-term oversupply
condition in the uranium market. Since the event, uranium spot market
prices have fallen over 50% from $73.00 per pound to $34.50 per pound at
the end of July 2013. Long Term prices have also weakened, dropping from
the $73.00 per pound into the $54.00 per pound area. By the end of 2012,
the price drop had resulted in the deferral or cancellation of several
large uranium projects, removing 27 million pounds of supply that was
projected to be online by 2021. We believe this further exacerbates the
growing longer-term gap between production and consumption and is likely to
increase the prospects for an eventual strong rebound in uranium prices.
World reactor requirements were about 174 million pounds in 2012, exceeding
the 152 million pounds of total production by about 22 million pounds.
Absent new production, this disparity could be expected to become more
pronounced, with the gap increasing to near 50 million pounds by 2020 (UxC
Uranium Market Outlook Q3-2013). So far, the gap between primary production
and reactor demand is being filled with secondary market sources. This
includes the U.S. DOE excess uranium inventories and the approximately 24
million pound per year Russian/U.S. Megatons to Megawatts (HEU) agreement
that expires in November 2013.
Fifty percent of current global production costs are higher than the
current spot price of approximately $35 per pound. Industry analysts
project a minimum acceptable price to encourage new hard-rock production of
over $80 per pound.
About Uranium Energy Corp
Uranium Energy Corp is a U.S.-based uranium mining and exploration company.
The Company's fully licensed and permitted Hobson processing facility is
central to all of its projects in South Texas, including the operating
Palangana in-situ recovery mine and the Goliad in-situ recovery project
which is currently in 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.
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.
In the Company's Burke Hollow and Oviedo technical reports, all tonnages,
grade and contained pounds for U3O8 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
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 U3O8 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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