In an April 15 research note, H.C. Wainwright & Co. analyst Heiko Ihle provided an update on Uranium Energy Corp.'s (UEC:NYSE AMERICAN) Burke Hollow project and the company's recent offering.
As for its Burke Hollow in situ uranium asset in Texas, the company has been working since April 9 to delineate the resource there, Ihle noted. Using two rigs, Uranium Energy completed 40 holes, the goal being to better understand the five Goliad Formation trends in production area PAA-1.
Of that set of holes, highlight hole 283.0-319 encountered an average uranium grade of 0.163% and a 4.483 grade thickness.
The energy company also placed 45 exterior monitoring wells there, adding to the existing 75, "to account for trend extensions," Ihle wrote.
Ihle relayed that Uranium Energy's recent financing closed, having generated $12 million. The company now has more than $110 million in cash, equity and inventory holdings. Its cash on hand is enough for Uranium Energy to completely fund its purchases of physical uranium for its stockpile.
Along with using the financing's proceeds to add to its uranium inventory, the company intends to use the proceeds as working capital.
Looking forward, "we maintain our longer-term expectation that current global developments should drive higher future uranium prices that could eventually support favorable production decisions at one or more of UEC's properties," Ihle wrote.
"This is especially important given ongoing wellfield development and definition drilling that should support a meaningful production ramp-up at Burke Hollow," Ihle added.
"We expect the new physical uranium purchasing initiative to add incremental value through potentially higher future uranium prices, while also freeing up production capacity at its operations to support the U.S. Uranium Reserve in the future," Ihle noted.
H.C. Wainwright has a Buy rating and a $5 per share price target on Uranium Energy, the stock of which is trading now at about $2.75 per share.
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Disclosures from H.C. Wainwright & Co., Uranium Energy Corp., April 15, 2021
I, Heiko F. Ihle, CFA, Tyler Bisset and Marcus Giannini, certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analyst's household has a financial interest in the securities of Uranium Energy Corp. (including, without limitation, any option, right, warrant, future, long or short position).
As of March 31, 2021, neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Uranium Energy Corp.
Neither the research analyst nor the Firm has any material conflict of interest in of which the research analyst knows or has reason to know at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.
The Firm or its affiliates did receive compensation from Uranium Energy Corp. for investment banking services within twelve months before, and will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.
H.C. Wainwright & Co., LLC managed or co-managed a public offering of securities for Uranium Energy Corp. during the past 12 months.
The Firm does not make a market in Uranium Energy Corp. as of the date of this research report.
H.C. Wainwright & Co., LLC and its affiliates, officers, directors, and employees, excluding its analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives (including options and warrants) thereof of covered companies referred to in this research report.
