Uranium Energy’s (UEC-X) Goliad in-situ recovery (ISR) project in the uranium belt of southern Texas has received its final permit and is fully authorized for production, which Haywood Securities analyst Colin Healey expects will take place in the first half of 2013.
Healey says that bringing Goliad online could cost the company US$11 million in pre-production capital, and believes management may need to raise US$15 million in an equity financing next year, despite having US$17.2-million cash in its treasury, and no debt.
Goliad makes up part of the company’s hub-and-spoke system, with uranium-loaded resins from satellite projects turned into yellowcake at the Hobson central processing plant, 80 km away. The in-situ recovery uranium processing plant, 160 km northwest of Corpus Christi, also processes uranium from the company’s Palangana ISR mine, which in the three months ended Oct. 31 produced 29,000 lb. uranium oxide (U3O8) from production areas one and two.
Goliad has measured and indicated resources 3.8 million tons grading 0.05% U3O8 for 5.48 million lb. U3O8, plus 1.5 million inferred tonnes at 0.05% U3O8 for 1.51 million lb. U3O8. Palangana has measured and indicated resources of 393,000 tons at 0.135% U3O8 for 1.06 million lb. U3O8 and 328,000 inferred tonnes at 0.176% U3O8 for 1.15 million lb. U3O8.
Eventually, the Hobson plant would also treat production from the company’s Salvo and Nichols exploration-stage projects. Inferred resources at Salvo total 1.1 million tons at 0.08% U3O8 for 2.8 million lb. 0.08% U3O8. Nichols has 900,000 inferred tons at 0.07% U3O8 for 1.3 million lb. U3O8.
Meanwhile, exploration continues at the company’s Burke Hollow and Channen projects about 100 km from the Hobson plant.
In early December, Uranium Energy completed development and began production from Palangana’s third production area.
For the three months ended Oct. 31, the company sold 50,000 lb. U3O8 at US$43 per lb. at a cash cost per lb. sold excluding royalties of US$26 per lb., generating revenues of US$2.2 million.
Using a discounted cash-flow analysis of the Hobson ISR operation, Haywood Securities’ Healey estimates a net present value of US$267 million. With corporate adjustments, including a US$30-million credit for the other Texas assets and a $41-million credit for exploration potential ex-Texas, he says the hub-and-spoke operation yields a corporate net asset value of US$273 million.
At press time, Uranium Energy was trading at US$2.56 per share.
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