December 29th, 2009

Dear Shareholder,

With 2009 nearing completion, I want to thank you for your continuing support as a shareholder. We value your confidence in management. 2009 was a stellar year for the Company in all regards, and expectations for 2010 are truly exciting. Management is squarely focused on initial in-situ recovery (ISR) of uranium and the start of production cash flow.

As you will recall, the first three months of 2009 appeared very threatening with stock markets bottoming in March amid tremendous financial uncertainty both domestically and globally. Throughout that period, UEC was achieving milestones that were expanded on through the full year.

Before we get into the events of the year, I would like to assure you that UEC is well funded to aggressively pursue its production targets in 2010. The Company has approximately $21 million on hand, and an agreement to receive an additional $11 million early in 2010 from the sale of a non-core asset in New Mexico.

Achievements in 2009

2010: Initial Production and Cash Flow Targeted

The Company�s key objective is to achieve initial in-situ uranium production in 2010. With the fully licensed Hobson processing facility now in hand, and with progress each week on remaining permitting issues, management is prepared to transition to an operating company and has the technical experience at all levels to carry through to successful operations. As you are probably aware, the technical team here has been involved with 35 ISR projects in the U.S., many of which are still in production.

Initial production is just the start of the Company�s plans for production in South Texas where we see an opportunity that is truly Texas-sized. The South Texas Uranium Belt is one of the country�s largest producing areas, and still holds significant known resources that are amenable to low-cost in-situ recovery. Also, Texas has a unique streamlined permitting framework for uranium mining.

Concurrently, with the closing of the acquisition of Hobson and Palangana, UEC has also acquired a portfolio of exploration properties, all with known mineralization and all accessible to the Hobson plant for processing. The plan here is to build a strong pipeline of ISR projects at all stages of development and to increase production in South Texas for many years.

Expansion of Nuclear Power in U. S.

You�ve likely seen several statements from U.S. President Obama, or Energy Secretary Steven Chu, demonstrating their support for nuclear power and the need to increase electrical power generation using nuclear energy. Following up on these urgings, a bipartisan bill was introduced in the U.S. Senate in mid-November, co-sponsored by Republican Lamar Alexander of Tennessee and Democrat Jim Webb of Virginia, which is a $20-billion plan to double the country�s nuclear generating capacity in 20 years, including $100 billion in federal loan guarantees for the next generation of nuclear plants. �The Clean Energy Act of 2009� is designed to �invigorate the economy, create jobs and move the United States toward providing clean carbon-free sources of energy.�

The Price of Uranium

Over the past year the spot price of uranium has fluctuated between $40 and $50/lb, and a multiyear support base has been established in the $40 - $41/lb range. Throughout the industry, demand is anticipated to far exceed supply on both a global, as well as a local-U.S. basis for the foreseeable years ahead. The long-term contract price is stable at $62/lb according to Ux Consulting (www.uxc.com). While this is certainly a workable level, the Company�s focus is to control our own future by producing at a very low cost using in-situ recovery methods.

The entire UEC team is working diligently to make the Company one of the few, new uranium producers in the world. We have the momentum to make 2010 the best year yet, and we welcome your participation in this robust growth. Please do give us a call at 1-866-748-1030, visit www.uraniumenergy.com or email info@uraniumenergy.com. Thank you for your confidence in the Company.

Yours sincerely,

Amir Adnani
President and CEO
Uranium Energy Corp

� Estimates for measured, indicated and inferred mineral resources have been determined in accordance with the definitional standards on mineral resources of the Canadian Institute of Mining, Metallurgy and Petroleum referred to in Canadian National Instrument 43-101 (NI 43-101). Measured, indicated and inferred mineral resources, while recognized and required by Canadian regulations, are not defined terms under Industry Guide 7 of the U.S Securities and Exchange Commission (the �SEC�) and are normally not permitted to be used in reports and registration statements filed with the SEC.

For further information about Uranium Energy Corp (NYSE - AMEX: UEC), please click: www.uraniumenergy.com or call 1.866.748.1030