Scott Melbye: "It's a Very Exciting Time to be a US Uranium Producer"

TL;DR

Uranium Energy Corp, founded by Amir Adnani, focuses on acquiring undervalued assets and preparing them for production. The company has seen growth in its asset base, with a core focus in South Texas. They also have plans to expand their footprint in Wyoming. Despite low uranium prices, the company remains optimistic about the future of the market.

Transcript

I'm Melissa Shaw with the investing news network at the Sprott Vancouver natural resource symposium 2017 I'm here with Scott melb executive vice president of uranium Energy Corp I was just wondering if you can tell me a little bit about uranium energy and how it got started thanks Melissa and it's great to visit with you here at Sprott Vancouver ur... Read More

Key Insights

• 📼 Uranium Energy Corp focuses on acquiring undervalued assets and preparing them for production during commodity downturns.
• 😒 The company uses the in-situ recovery method, which is environmentally friendly and cost-effective.
• 📌 Texas and Wyoming are the main geographic locations for Uranium Energy Corp, with excellent infrastructure and skilled workforce.
• 😘 Uranium prices have been low for the past seven years, but the company sees it as an unsustainable situation and expects a recovery.
• 👻 The company's strategy as an unhedged producer allows them to keep cash expenditures low and be ready to generate revenues quickly when prices improve.
• 👶 The recent expansion of the Burke Hollow project represents a new discovery for Uranium Energy Corp.

Questions & Answers

Q: How does Uranium Energy Corp plan to compete with uranium producers from other countries?

Uranium Energy Corp uses a non-intrusive mining method called in-situ recovery (ISR), which is environmentally friendly and has low capital and operating costs. This allows them to be competitive on a global scale, even against higher cost operations in countries like Canada and Kazakhstan.

Q: What is the current state of uranium prices?

Uranium prices have been low for the past seven years, reaching a bottom of around $17 per pound. While prices have slightly recovered to around $20-21 per pound, they are still below the all-in cost of most global production. This is an unsustainable situation that needs to be corrected.

Q: How has Uranium Energy Corp weathered the challenges of the low price environment?

Uranium Energy Corp is an unhedged producer, meaning they do not cap the upside potential of their sales by hedging forward. During the tough market conditions, they have had the discipline to shut in production and keep the pounds in the ground, ready to sell into a better market in the future. This approach has allowed them to keep cash expenditures low and de-risk their assets.

Q: How does the company view the future of uranium prices?

While the current uranium prices are still low, the company believes that the situation is unsustainable and prices need to recover. With increasing demand for uranium due to new reactors coming online worldwide, the industry is facing underinvestment and long lead times to respond. This presents a great investment opportunity for uranium producers like Uranium Energy Corp.

Summary & Key Takeaways

• Uranium Energy Corp was founded twelve years ago by Amir Adnani with the goal of acquiring undervalued assets in commodity downturns and preparing them for production.

• The company's core focus is in South Texas, where they have a 2 million pound per year plant and five deposits within 50 to 100 miles of the plant.

• Uranium Energy Corp is also expanding its footprint in Wyoming with the acquisition of the Reno Creek project, which will significantly increase their resource base.