Jennings Capital Initiates Coverage of Uranium Energy Corp
Dear Shareholder,
Jennings Capital Inc. initiated coverage of Uranium Energy Corp on April 7th with a BUY recommendation and a 12-month target price of US$7.25/share.
Analyst, Alka Singh, who has visited the Company�s operations in South Texas, made the following statements in her report:
�Uranium Energy Corp started production at the Hobson Plant in Texas in November 2010. The uranium is extracted using the in-situ recovery process (ISR), which has both lower capital costs and operating costs...
�In 2010, uranium production in the U.S. was 4.2 million lbs, whereas U.S. utilities purchased approximately 50 million lbs. - 86% of which came from suppliers of foreign origin. The U.S. utilities would want to secure more uranium from domestic producers if the supply was consistent. UEC could become a source of steady supply for the utilities in the U.S...
�We believe the technical team that is in place is one of the best, if not the best, in the industry. The operating team has been involved in the development of 35 ISR projects in the US...
�Out of the 56 operating reactors in Japan, 11 were in the earthquake and Tsunami zone and have been shut down. There are 7 reactors offline in Germany. Currently, there are 443 operating reactors in the world - so approximately 4% of them have been impacted. At the current worldwide production level of 130 Mlbs, there is a large gap to fill the 180-190 Mlbs of uranium required by the current nuclear reactors. The 4% decline in demand is not going to impact the uranium price significantly, in our view. There are 62 nuclear reactors under construction world-wide and none of them have been impacted. Also, the agreement with Russia that that supplies approximately 25 Mlbs per annum to the market is going to expire in 2013...
�Nuclear power is the only large-scale, clean, cost effective energy source that can reduce CO2 emissions while continuing to satisfy a growing demand for power, in our view...
�Our BUY recommendation on the shares is based on: 1) our positive view of uranium prices in the medium- to long-term; 2) the technical expertise of the operating team (the members of which have built almost every ISR facility in Texas); and 3) the strategy of the Company to consolidate attractive uranium projects under one umbrella and to bring a new uranium mining company into production. We believe there is potential for Uranium Energy to emerge as a consolidator in the fragmented U.S. uranium industry and position itself as a mid-tier uranium producer over the next 3-5 years.�
Thank you,
Uranium Energy Corp.
About Uranium Energy Corp
Uranium Energy Corp (NYSE-AMEX: UEC) is a U.S.-based uranium production, development and exploration company operating North America�s newest emerging uranium mine. The Company�s fully licensed and permitted Hobson processing facility is central to all of its projects in South Texas, including the Palangana in-situ recovery project, which is ramping up to full production this year, and the Goliad in-situ recovery project which has been granted its Mine Permit and is in the final stages of mine permitting for production. 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.
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