CORPUS CHRISTI, TX, Jan. 29, 2018 /CNW/ - Uranium Energy Corp
(NYSE American: UEC, the "Company" or "UEC") is pleased to provide the following letter to its shareholders from President and
CEO, Amir Adnani, on the outlook for the Company in 2018.
Dear Shareholder,
On behalf of management and the Board of Directors, I want to thank you for your support as a shareholder. We very much
appreciate your confidence in our 2017 accomplishments and strategy moving forward.
Last year we noted the uranium market was beginning to turn a corner and, indeed, the developments in 2017 proved to be
extraordinary! The highlights included several very positive events that have and will continue to have significant impacts
on the uranium market.
The video link below is a good place to start with a recent presentation addressing the latest positive developments in
uranium market fundamentals as well as UEC's activities and strategic path going forward:
http://www.uraniumenergy.com/news/video/
Recent announcements of major production cuts from the world's largest producers are expected to contribute to a notable
decrease in uranium supply in 2018 and beyond.
These production cuts will lower expected 2018 global production to below 140 million pounds - a stark contrast to the 188
million pounds of projected use. Inventory and other secondary market sources will mitigate this gap over the near term,
but those supplies are finite and in the process of being drawn down. Furthermore, while recent production cuts will go a long
way toward rebalancing the market, we continue to expect additional cuts in global output, absent a material and sustainable
price increase.
The need for highly reliable, base-load, emission-free energy remains a key driver for nuclear power and uranium demand, not
only in the U.S., but across the globe. There are currently more operable reactors (447), and more reactors planned,
proposed and under construction (566), than there were in March 2011, pre-Fukushima. China and India continue to provide the largest growth in clean-air nuclear
energy, with 26 reactors under construction and another 247 now planned and proposed as they attempt to combat severe air quality
conditions. Operational reactors, new builds and planned reactors demonstrate a robust commitment to nuclear power, indicating
steady growth in global uranium demand for decades to come.
U.S. Energy Security and the Opportunity for Domestic Production Growth
In the U.S., nuclear power accounts for about 20% of the country's electricity and about 60% of its carbon-free electricity.
Unique among other "green" power sources, nuclear energy also provides stability and resilience to the nation's electric grid
with its highly reliable base-load attributes. As such, preserving the fleet of reactors has become a high priority for the
federal government, for individual states as well as for industry.
In 2017, the U.S. continued to show a heavy dependence on foreign uranium to fuel domestic reactors. Mined production
from the U.S. uranium industry was less than 5% of the nation's uranium requirements - about 50 million pounds per year. In
2018, U.S. uranium production is expected to fall to approximately 0.7 million pounds, the lowest production since 1949. At
this level, domestic production will account for less than 2% of the uranium required to power U.S. reactors.
This extreme dependence on foreign uranium is a serious national security concern. Uranium is a strategic mineral for
the U.S. as well as a source of economic development and jobs. At its peak, the uranium industry employed more than 20,000
Americans; now the number is less than 560 and continues to decline. Since 2012, investment in uranium exploration is down
more than 90%.
As an independent, 100% unhedged U.S. uranium company, UEC has assembled a portfolio of low-cost, fully permitted in-situ
recovery (ISR) projects in South Texas and the Powder River Basin of Wyoming that will be the building blocks to lead U.S. uranium production higher.
The bedrock of the Company is a solid senior management team, possessing a wealth of experience in both U.S. and international
uranium mining and government policy. Spencer Abraham, our Chairman, served as the tenth U.S.
Energy Secretary in the George W. Bush Administration, devising and successfully implementing the first national energy policy in
the U.S. since the 1980's. Our Executive VP, Scott Melbye, is past President of the Uranium
Producers of America and has over three decades of industry experience with uranium majors.
In summary, global market fundamentals for uranium are improving through a combination of reduced supply from ongoing major
foreign-producer cutbacks and heightened demand spurred by growing international recognition of the need for zero-emission,
base-load electricity. Concurrently, fundamentals for uranium production here in the U.S. are improving because the extreme
dependence on foreign supply raises the kinds of strategic security issues that are gaining the attention of top congressional
and executive branch decision makers. These are game-changers!
2018 Growth Plans in Texas, Wyoming and
Paraguay
We will advance our growth plans in 2018 within the framework of our corporate strategy: 1) remain 100% unhedged for maximum
exposure to a turn-around in uranium prices; 2) make accretive acquisitions near the bottom of the cycle; and 3) grow and de-risk
our low-cost ISR portfolio in Texas, Wyoming and
Paraguay. There is also one new objective for 2018: to maximize the value of our Alto Paraná titanium project for the
benefit of UEC shareholders. While we remain 100%-focused on our core uranium business, the acquisition of Alto Paraná, a
world-class titanium project, is an important value driver for shareholders in 2018 and beyond.
In 2017, we made an accretive acquisition of the fully licensed Reno Creek ISR Project in Wyoming's prolific Powder River Basin. This premier project strengthens our U.S. ISR portfolio by
adding Measured & Indicated resources of 22 million pounds*, along with a U.S. Nuclear Regulatory Commission (NRC) production
license of 2 million pounds per year. This, combined with physical capacity of 2 million pounds per year at our Hobson
Processing Facility in South Texas, positions UEC with a baseline potential production profile
of 4 million pounds per year, with room to grow.
Early in 2018, we plan to expand the resources at Reno Creek with the pending acquisition of the advanced-stage North Reno
Creek project located adjacent to and within UEC's existing permitted boundary. This purchase adds further scale and synergies as
a single combined project, increasing the Measured & Indicated resource by 20%, with the addition of another 4.3 million
pounds*. After the closing of the North Reno Creek acquisition, we anticipate completing a new NI 43-101 report and
promptly updating the prefeasibility study.
In South Texas , we will extend last year's successful drilling campaign at our Burke
Hollow ISR project with additional delineation drilling and resource expansion. Our 2017 drilling campaign resulted in a
38.5% increase to Inferred resources from 5.1 to 7.1 million pounds* and the goal is to further expand these resources in 2018.
We will also continue to de-risk this exciting project through the advancement of environmental permitting. The last major
production permit required at Burke Hollow, a Radioactive Materials License, is expected to be approved in 2018.
In Paraguay , we exercised a strategic option for 100% control of the Alto Paraná
Titanium Project, an exceptional opportunity generated by our in-country presence and relationships. We subsequently advanced the
project through completion of an NI 43-101 mineral resource estimate* in September, which positions Alto Paraná as one of the
highest-grade and largest-known undeveloped Ferro-Titanium deposits in the world. This project represents significant value for
our shareholders, however our core focus remains on uranium mining and exploration projects; as a result, the Company will look
for opportunities to monetize Alto Paraná.
Titanium has enjoyed a continuation of robust demand and corresponding price growth since the start of 2017. New
projects will be required by 2019 to avoid a supply deficit, with demand growth forecast to outpace supply for the next few
years.
Positioned and Prepared
Our South Texas hub-and-spoke strategy has a pipeline of five ISR projects positioned to
supply our state-of-the-art Hobson processing facility. We are well prepared to ramp up
operations when justified by reasonable uranium prices. Burke Hollow is close to joining Goliad to achieve fully licensed status, and the ability to re-start operations at the Palangana project
should require only months. Coupled with a solid balance sheet and our newly acquired and fully licensed Reno Creek project, the
Company is well positioned to become the preeminent low-cost ISR producer in the U.S.
UEC is unique in being a 100% unhedged developer, as we have intentionally avoided restrictive contracting with associated
price ceilings during the bottom of this price cycle. This will allow maximum leverage and reward to our shareholders as
uranium prices move higher.
Thank you again for your confidence in management's strategy. We encourage and appreciate your ongoing support. Please feel
free to call me directly, or our Investor Relations department, with any questions or comments that you might have as the year
develops at 1-866-748-1030 or email info@uraniumenergy.com. Visit our
website at http://www.UraniumEnergy.com/ and follow us
on Twitter @UraniumEnergy to keep current on all
our activities and be sure to register your email to receive breaking news.
Yours truly,
"Amir Adnani"
President & CEO
About Uranium Energy Corp
Uranium Energy Corp is a U.S.-based uranium mining and exploration company. The Company's fully-licensed Hobson
Processing Facility is central to all of its projects in South Texas, including the Palangana
ISR mine, the permitted Goliad ISR project and the development-stage Burke Hollow ISR project. In Wyoming, UEC controls the
permitted Reno Creek ISR project. Additionally, the Company controls a pipeline of advanced-stage uranium projects in
Arizona, Colorado, New Mexico
and Paraguay, and a large, high-grade titanium project in Paraguay. 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 American: UEC
Frankfurt Stock Exchange Symbol: U6Z
WKN: AØJDRR
ISN: US916896103
Safe Harbor Statement
* 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 herein are economically or legally mineable.
- Reno Creek, Wyoming Resource - Measured and Indicated Resources total 27.59 million tons grading 0.041%
U3O8 containing 21.98 million pounds. Inferred Resources total 1.36 million tons grading 0.036%
U3O8 containing 0.93 million pounds
- North Reno Creek, Wyoming Resource - Measured and Indicated Resources total 3.8 million tons grading 0.056%
U3O8 Containing 4.3 million pounds
- Burke Hollow, Texas Resource - Inferred Resource total of 4.06 million tons grading 0.088% U3O8
containing 7.09 million pounds
- Alto Parana, Paraguay Resource - Inferred Resource total of 4.94 billion tonnes grading
7.41% TiO2 and 23.6% Fe2O3
Except for the statements of historical fact contained herein, the information presented in this letter 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 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. 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 letter.
SOURCE Uranium Energy Corp
View original content: http://www.newswire.ca/en/releases/archive/January2018/29/c4107.html