Key Takeaways:
- UEC produced 32,000 pounds at $54.61 per pound, above the $39.30 cumulative average
- The company holds $794 million in liquid assets with zero debt
- Burke Hollow, the largest greenfield ISR project in a decade, began production in April
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Uranium Energy Corp drops 15% as Q3 costs miss estimates
Key Takeaways:
- UEC produced 32,000 pounds at $54.61 per pound, above the $39.30 cumulative average
- The company holds $794 million in liquid assets with zero debt
- Burke Hollow, the largest greenfield ISR project in a decade, began production in April
Uranium Energy Corp reported fiscal third-quarter production costs that rose sharply from prior levels, sending shares down more than 15% in their worst single-day drop since the company restarted operations.
"The cost per pound did increase during the quarter, but we view this as a temporary and largely a timing-related event," Amir Adnani, founder and chief executive officer at Uranium Energy Corp, said on the earnings call. "Regulatory approvals delayed production from new header houses while costs associated with bringing those production areas online were incurred before the associated uranium production was fully reflected in quarterly volumes."
The company produced 32,000 pounds of uranium concentrate at a total cost of $54.61 per pound during the quarter ended April 30, including a cash cost of $46.69. That compares with a cumulative total cost of $39.30 per pound across the 277,000 pounds produced since the restart of the Christensen Ranch operation in Wyoming. The increase reflected delayed regulatory approvals for three new header houses at Christensen Ranch, which were granted near the end of the quarter, as well as higher state taxes in Wyoming.
Uranium Energy Corp ended the quarter with $794 million in liquid assets, including $488 million in cash, along with uranium inventory and equity holdings, and no debt. The company held 1.4 million pounds of U308 inventory valued at approximately $127 million at current market prices, excluding an additional 277,000 pounds of precipitated uranium at the Iriguiri central processing plant.
The company commenced production at its Burke Hollow project in South Texas on April 8, marking the largest greenfield in-situ recovery uranium project to come online in the United States in more than a decade. The project took 14 years from discovery to production, underscoring the scarcity of permitted and operating uranium mines. Management said it expects production rates to increase in the fiscal fourth quarter as newly commissioned header houses ramp up.
The stock closed at $10.89 on the day of the earnings call, down 13.6%, and extended losses in subsequent trading to more than 15%. The decline puts the stock at its lowest level in months, testing support near the $10 mark. Investors will watch the fiscal fourth-quarter production report for evidence that costs normalize as new header houses contribute to higher volumes.
This article is for informational purposes only and does not constitute investment advice.
