Source: Streetwise Reports 10/02/2024
Uranium Energy Corp. (AMEX:UEC) has taken a step in expanding its U.S. uranium production capacity through the acquisition of Rio Tinto Plc.'s (NYSE: RIO) Sweetwater Plant and a portfolio of Wyoming uranium assets.
Announced on September 23, the transaction, valued at US$175 million, adds approximately 175 million pounds of historic uranium resources to UEC's holdings. This acquisition creates UEC's third hub-and-spoke production platform in the U.S., further solidifying its role as a leading player in the domestic uranium market.
The Sweetwater Plant has a licensed processing capacity of 4.1 million pounds of uranium per year and is a key strategic asset. This enables UEC to expand its capabilities for both in-situ recovery (ISR) and conventional mining methods. This announcement comes as the U.S. increases its focus on securing domestic uranium supplies in light of geopolitical shifts, like the U.S. ban on Russian uranium imports. The transaction is expected to close in Q4 2024, with UEC utilizing its available liquidity to fund the purchase.
Looking Into The Uranium Market
On September 30, The New York Times reported that "uranium mines are ramping up across the West, spurred by rising demand for electricity and federal efforts to cut Russia out of the supply chain for U.S. nuclear fuel."
This surge in demand has helped drive uranium prices to their highest levels in over 15 years, according .to TradeTech, a consulting firm. These market conditions have led to a revitalization of mining regions that had been in decline since the end of the Cold War.
Chris Temple of The National Investor noted that UEC was "upgraded back to Buy" following recent market news and encouraged increased exposure to the uranium sector.
The industry is expected to continue growing, with U.S. production of uranium, specifically yellowcake, predicted to reach approximately six million pounds by 2028. John W. Cash, CEO of Ur-Energy, highlighted the recovery in the Times ...
