Uranium Energy Corp is a U.S.-based uranium mining and exploration company. In South Texas, the Company’s hub-and-spoke operations are anchored by the fully-licensed Hobson Processing Facility which is central to the Palangana, Burke Hollow and Goliad ISR projects. In Wyoming, UEC controls the Reno Creek project, which is the largest permitted, pre-construction ISR uranium project in the U.S.
Additionally, the Company controls a pipeline of uranium projects in Arizona, New Mexico and Paraguay, a uranium/vanadium project in Colorado and one of the highest-grade and largest undeveloped Ferro-Titanium deposits in the world, located 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.
UEC's Acquisition Rationale and Highlights reported mid-August, 2022:
- Accretive transaction, doubling of UEC’s uranium resources in world-class, politically stable, uranium mining jurisdictions at only a 13.7% dilution to UEC’s outstanding shares (1)
- Pro forma UEC will have the largest uranium portfolio focused exclusively in the Americas, located in proven and stable jurisdictions, and combining diversified U.S. production and Canadian development assets
- Recent global events have set in motion long-term structural changes in the supply chains of energy commodities where security of supply and reduction of geopolitical and transportation risk will be key strategic differentiators
- On the demand side, there is a growing trend by Western utilities to secure supplies from uranium projects in politically stable jurisdictions
UEX portfolio is comprised of 29 uranium projects covering key areas of the producing eastern side and development western side of prolific Athabasca basin - 5 of the 29 projects are advanced resource stage and already in strong joint-venture partnerships with established uranium miners which allows UEC to remain operationally focused in the U.S. while benefiting from a new development pipeline with significant exploration potential in Canada
- UEX complements UEC’s near-term production-ready and brownfield assets in the U.S. with medium and long-term production potential in Canada
- UEC maintains its strong balance sheet with over $180 (2) million of cash and liquid assets, with no debt, supporting production readiness and its ability to advance a strengthened project portfolio.
Additional Benefits of the Acquisition to UEX shareholders
- UEC's strong balance sheet and liquidity provides UEX with additional capital to fund continued exploration and growth initiatives at its projects in the Athabasca basin and Nunavut
- Provides UEX's shareholders with substantial exposure to production-ready uranium assets in the United States, complementing UEX's current portfolio of development stage assets in Canada
UEX Asset Portfolio Overview
- 49.1% ownership in Shea Creek (operated by Orano, 50.9% ownership): Currently one of the largest undeveloped deposits in the Athabasca Basin, hosts 67.6M lbs. U3O8 of Indicated and 28.1M lbs. U3O8 of Inferred resources (100% basis) (1)
- 100% ownership in Horseshoe-Raven: Open pit amenable project located only 4 kms from Cameco’s Rabbit Lake Mill, hosts 37.4M lbs. U3O8 of Indicated resources (100% basis) (2)
- 82.8% ownership in Christie Lake: Resource stage asset located in the Athabasca basin that hosts 20.4M lbs. U3O8 of Inferred resource (100% basis) (3)
- 16.9% ownership in Kiggavik (operated by Orano, 66.2% ownership): Feasibility stage project located in Nunavut, Canada that hosts 127.3M lbs. U3O8 of Indicated and 5.4M lbs. U3O8 of Inferred resource (100% basis) (treated as a historical estimate for the purposes of National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) (4)
- 15% ownership in Millennium (operated by Cameco, 69.9% ownership): Feasibility stage project located between McArthur River Mine and Key Lake Mill that hosts 75.9M lbs. U3O8 of Indicated and 29.0M lbs. U3O8 of Inferred resource (100% basis) (treated as a historical estimate for the purposes of NI 43-101) (5)
- 5% ownership in Wheeler River (operated by Denison, 95% ownership): Denison completed a PFS in 2018 highlighting robust economics. The Wheeler River project hosts a total of 132.1M lbs. U3O8 of Indicated (inclusive of 109.4M lbs. U3O8 probable reserves) and 3.0M lbs. U3O8 of Inferred resources (100% basis) (treated as a historical estimate for the purposes of NI 43-101) (6)
- Other Projects: The remainder of UEX’s portfolio consists of one resource-level project, four mid-stage projects and 18 grassroots projects which will help provide further resource growth and long-term production sustainability for UEC
For mineral resource estimates referenced above as “historical estimates”, UEX and UEC are not treating this information as current mineral resources, have not verified this information and are not relying on it. A qualified person has not done sufficient work to classify these historical estimates as current mineral resources. UEX and UEC currently do not plan to conduct work to verify the historical estimates other than using them to guide exploratory and possible development work.
UEC Asset Portfolio Overview
Wyoming Hub & Spoke ISR Portfolio: Seven satellite projects, with a combined Measured and Indicated resource of 62M lbs. U3O8 and 7M lbs. U3O8 of Inferred resources, and the Irigaray Processing Plant with a licensed production capacity of 2.5M lbs./year (7)
- Texas Hub & Spoke ISR Portfolio: Four satellite projects, with a combined Measured and Indicated resource of 6.5M lbs. U3O8 and 12.5M lbs. U3O8 of Inferred resources, and the Hobson Processing Plant with an installed production capacity of 2M lbs./year (8)
- Other Projects: U.S. Hardrock pipeline, Paraguay ISR uranium portfolio, Paraguay Titanium business and the Diabase project in the Athabasca Basin
- Physical Uranium Portfolio: A 5M lb. physical portfolio of U.S. warehoused uranium (U3O8).
- Strategic Equity Interest: 16% equity stake in Uranium Royalty Corp.
Readers are cautioned that resources reported by UEX have been prepared and reported pursuant to the disclosure standards required by NI 43-101, and the resources reported by UEC have been prepared pursuant to the disclosure standards required under Regulation S-K subpart 1300 (“S-K 1300”) adopted by the United States Securities and Exchange Commission for filings under the U.S. Securities Act of 1933, as amended, and under the U.S. Securities Exchange Act of 1934, as amended. Resources that are reported pursuant to S-K 1300 may not qualify as resources under NI 43-101 or may differ from resources prepared under NI 43-101, and vice versa.
Transaction Conditions & Timing
UEX intends to call a meeting of shareholders to be held in August 2022 to seek shareholder approval for the Arrangement (the “UEX Meeting”). Completion of the Arrangement will require:
- approval of at least 66 2/3% of the votes cast by UEX shareholders at the UEX Meeting, and
- approval of a simple majority of the votes cast by UEX shareholders at the UEX Meeting, excluding votes from certain management shareholders, as required under Multilateral Instrument 61-101.
Completion of the Arrangement is also subject to the receipt of court and stock exchange approvals, and other customary closing conditions for transactions of this nature, such as Investment Canada approval.
The Agreement provides for, among other things, non-solicitation covenants, with “fiduciary out” provisions that allow UEX to consider and accept a superior proposal, subject to a “right to match period” in favour of UEC. The Agreement also provides for a termination fee of US$8.25 million to be paid by UEX to UEC if the Agreement is terminated in certain specified circumstances. In addition, under the Agreement UEC has agreed to provide UEX with C$5 million funding by way of a private placement of UEX Shares at a price of C$0.43 per UEX Share (the “Private Placement”). Closing of the Private Placement is subject to the approval of the TSX.
The Arrangement has been unanimously approved by the Board of Directors of UEX. The directors and senior officers of UEX, holding in aggregate approximately 0.5% of the issued and outstanding UEX Shares, have entered into voting support agreements with UEC, pursuant to which they have agreed to vote their shares in favor of the Arrangement at the UEX Meeting. TD Securities and Sprott Capital Partners have provided opinions to the UEX Board of Directors to the effect that, as of the date thereof, and based upon and subject to the assumptions, limitations and qualifications stated in such opinions, the consideration to be received by UEX shareholders pursuant to the Arrangement is fair, from a financial point of view, to such shareholders.
The transaction is expected to close in the third quarter of 2022.
Additional information on UEC's South Texas activities:
https://www.gurufocus.com/news/1848833/rosen-respected-investor-counsel-encourages-carvana-co-investors-to-secure-counsel-before-important-deadline-in-securities-class-action-filed-by-the-firm-cvna
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