In a Jan. 12 research note, analyst Colin Healey reported that Uranium Energy Corp. (UEC:NYSE.MKT) ranks among Haywood Capital Markets' Top Picks for 2021 and is "perfectly positioned to leverage both macro and domestic catalysts."
"UEC has production ready-assets within reach of its South Texas Hobson central processing plant and its Reno Creek project is fully permitted/construction ready, creating a pathway to 4 Mlb U3O8/year of near-term production once the uranium price incentivizes," Healey stated.
He noted that UEC has multiple deposits with "relatively low capex hurdles, near-ready to feed the plant."
"With over 19 million pounds (19 Mlb) of U3O8 in all categories' resources defined (>85% fully permitted) across the Texas in situ recovery assets and plenty of unexplored, but highly prospective, acreage, Uranium Energy is well positioned to generate near-term cash flow in the right environment," wrote Healey.
The company's asset portfolio includes Reno Creek project, which is considered the "largest permitted, pre-construction ISR project in the U.S., with approximately 27.5 Mlb U3O8 in all-categories resources (95% Measured and Indicated)." Uranium Energy is now preparing a prefeasibility study "to demonstrate the economic case."
Uranium Energy offers potential upside in the way of exploration given its pipeline of hardrock uranium and vanadium assets in three countries, Healey wrote. They are its development-stage assets in the U.S., an exploration-stage project in the Athabasca Basin and "exploration/development assets in Paraguay that includes titanium exposure at the Alto Parana project."
In addition, "the company's low-cost, in situ recovery portfolio and all-in resource of 104 Mlb U3O8 are completely unhedged, allowing for maximum exposure upside exposure to rising uranium prices," Healey indicated.
Uranium Energy is in a strong financial position, Healey noted, having $16.7 million in cash at year-end 2020 and "further agility once the market conditions justify a restart." Last fall, the company garnered $15 million in gross proceeds through a public offering upsized from $8 million.
"With the uranium sector facing the best fundamental backdrop we've seen in the post-Fukushima ear, and the U.S. making significant progress to revive its domestic nuclear industry, we recommend buying UEC to gain exposure to this two-pronged bullish outlook," Healey concluded. "UEC has production-ready assets within reach of its South Texas CPP and could rapidly respond to an improving uranium price."
Along with a Buy recommendation, Haywood has a $2.60 per share target price on Uranium Energy, the stock of which is currently trading at about $2.01 per share.
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Disclosures from Haywood Securities, Uranium Energy Corp., January 12, 2021
Analyst Certification: I, Colin Healey, hereby certify that the views expressed in this report (which includes the rating assigned to the issuer’s shares as well as the analytical substance and tone of the report) accurately reflect my/our personal views about the subject securities and the issuer. No part of my/our compensation was, is, or will be directly or indirectly related to the specific recommendations.
The following Important Disclosures apply for Uranium Energy Corp.: ▪ Haywood Securities, Inc. has reviewed lead projects of Uranium Energy Corp. and a portion of the expenses for this travel have been reimbursed by the issuer. ▪ Haywood Securities Inc. or one of its subsidiaries has managed or co-managed or participated as selling group in a public offering of securities for Uranium Energy Corp. in the past 12 months.
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