- H.C. Wainwright and Co. increase price target, reiterate buy rating for UEC
- Key moves by company lead to stronger position
- UEC investing to build next generation of low-cost and environmentally friendly uranium projects that will be competitive on global basis, says CEO
Recent action taken by Uranium Energy (NYSE American: UEC), a U.S.-based uranium mining and exploration company that controls one of the country’s largest historical uranium exploration and development databases, has prompted H.C. Wainwright and Co. to increase its price target for the company and reiterate its buy rating (https://ibn.fm/6wWpO). In its updated report, Wainwright specifically cited three main factors for the increase in price: UEC’s decision to obtain financing to support physical uranium purchases, the establishment of a physical uranium inventory initiative and the restart of wellfield development and definition drilling at the company’s Burke Hollow project.
“On March 22, Uranium Energy Corp. (‘UEC’) announced that it had closed an offering for total gross proceeds of $30.5M after issuing 10.0M common shares at a price of $3.05 per share,” the report stated. “These funds are expected to be used for additional uranium purchases, as well as general corporate and working capital requirements. . . . We highlight that UEC’s physical uranium initiative, which we discuss in more detail below, is fully funded with its current cash position, and now includes 1.4M pounds (lbs) of U.S. warehoused uranium.
“While the company remains focused on developing its low-cost, in-situ recovery (‘ISR’) mining capabilities, management has identified a unique opportunity to purchase drummed uranium at spot prices well below global industry mining costs,” the report continues. “As a result, UEC is establishing a physical uranium inventory initiative based on an initial agreement with ConverDyn in Illinois to acquire 0.4Mlbs of U.S. warehoused uranium for a total cost of $10.9M. . . . Management anticipates that this initiative can improve its balance sheet through uranium price appreciation and support future marketing efforts with utilities to accelerate cash flows. Looking ahead, this move should also increase the availability of Texas and Wyoming production capacity for emerging U.S. specific opportunities such as the U.S. Uranium Reserve (‘UR’).”
Finally, the H.S. Wainwright report stated that “on January 26, UEC announced that the company had commenced production area development at its Burke Hollow ISR project in Texas. We note that advancing and expanding resources is a critical step to supporting the company’s plan to participate in supplying the U.S. UR. The UR includes purchases of newly mined domestic uranium over a 10-year period for an aggregate value of $1.5B. Additionally, the FY21 bipartisan omnibus spending bill currently includes $75M for domestically produced uranium. We highlight that the U.S. Department of Energy is currently developing a plan to implement this program, which UEC expects to be a competitive bid process focused on existing fully permitted and low-cost projects.”
As a result of these key factors, H.C. Wainwright and Co. reiterated its buy rating on EUC shares while raising its price target to $5 from $3.60, a move worth noting by one of the country’s oldest and most-trusted financial institutions.
UEC is focused on establishing a stronghold in the growing U.S.-based uranium space. “With $65.8 million in cash and equity holdings, UEC has the balance sheet strength to lead U.S. uranium production higher at the most critical time for the domestic industry since the inception of the civilian nuclear power program began in the 1950s,” said UEC CEO and president Amir Adnani (https://ibn.fm/f3N4T). “As a leading pure-play American uranium company, UEC is investing to build the next generation of low-cost and environmentally friendly uranium projects that will be competitive on a global basis.”
Uranium Energy Corp. is a U.S.-based uranium mining and exploration company that controls one of the country’s largest historical uranium exploration and development databases. Founded in 2003, UEC is headquartered in Corpus Christi, Texas. Properties acquired by the company are primarily located within the United States, including Texas, New Mexico, Colorado, Arizona and Wyoming. In addition, the company is aggressively pursuing other key developmental targets. UEC is poised to be a next-generation uranium producer and is committed to providing low-cost, low-capital fuel for the country’s large electricity-generating nuclear fleet.
For more information, visit the company’s website at www.UraniumEnergy.com.
NOTE TO INVESTORS: The latest news and updates relating to UEC are available in the company’s newsroom at https://ibn.fm/UEC